Advantages of giving employees decision making responsibility
Quicker responses to a changing environment
One of the key benefits of giving employees decision-making responsibilities is that it can speed responses – particularly in a changing environment. Rather than having to seek authority for all changes (which may substantially slow responses due to the increased bureaucracy), having decision-making in the control of employees allows responses to be made soon after the need for change is identified.
Closer to the customer
Another advantage of giving employees decision-making responsibilities is that they are closer to the customer. They can potentially react to information that more senior management may not be aware of. As such, the entire firm may become more responsive to customer demands.
Builds up employee skills
A final advantage of giving employees decision-making responsibilities is that it gradually increases the skills of the employees. The more decisions that employees make, the greater their ability to make decisions becomes.
Limitation of employee decision making
While there are many benefits of involving employees in decision-making, there are also limitations. Some of the key issues associated with employees making decisions include:
Can't necessarily appreciate the whole organization's strategy
One of the key potential issues with employees being involving in decision-making is that they may not have an overview of the entire organization to be able to make decisions that are consistent with the overall strategy. While individual decisions may make sense alone, they may not connect with the overall strategy of the firm.
Of course, part of the reason why employees may not be best placed to make decisions is that they may not be aware of the strategy – involving employees in the strategy formation, or at least communicating the strategy with them can help give employees the awareness needed to appreciate the firm’s strategy.
May make decisions more focused on an employee's own department
Beyond employees not necessarily having the overview of the entire organization’s strategy, there is a danger that employees may make decisions that are more focused on furthering their own organization, rather than for the better of the firm overall.
Final thoughts: Consider what areas you can involve others
When considering the role of employees in decision-making, it is useful to see it not as a yes or no decision, but rather what areas does it make sense include employees. There likely will be areas where employees being close to the customer will substantially increase your responsiveness, and be a great benefit to the organization. There may be other decisions where a greater purview of the entire organization is needed to be able to appropriately respond. Look for opportunities to involve employees, where the benefits outweigh the costs.
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