the "Soft" Costs of Empowering Employees
Originally published in EI Network on April 1, 1998
long ago, a question appeared on the Internet asking how one evaluates the
"soft" costs associated with empowering employees. I responded
with the following thoughts and was surprised by the positive responses.
Maybe the ideas below will be of help to you.
Earlier in my career, I
performed estimates for my employers on just about anything that could be
quantified. Most managers won't seriously question your numbers if you
have a rational explanation for them. Get a little data, ask for help from
others (HR, industrial engineers, quality professionals, cost engineering
or estimating associations, HR associations, insurance organizations, work
& family organizations), then make your best guess as to the dollar
costs of the above. Nobody will shoot you for trying. If you have to
stretch a little when explaining any numbers, just admit that it was
difficult quantifying them, but that "we all know there's a cost
associated with this." If someone doesn't like your number, just
politely ask them for theirs. It's a surefire way to break that kind of
nitpicking. You also might rehearse your presentation with a couple of
managers to see how it plays. Ask them for honest feedback.
To attach dollars to the "soft"
benefits of empowerment, evaluate the following:
Absenteeism - It typically goes down when empowerment
takes hold. HR departments can give you some figures on what absenteeism
Turnover - It also goes down. Turnover is expensive, HR
can also give you figures on what it costs to search for, relocate, and
train new employees.
Safety - It usually gets better. Ask the safety
department if the Workman's Compensation Insurance modifier has
improved. This is the number which increases or decreases the company's
insurance premium based on its safety record. These can be significant
dollars, especially in accident- prone jobs.
Feeling better - Feeling
better equates to better performance. All else being equal, has
the performance of the individual or group improved? If so, can it be
quantified? Has the group's output improved? How many new ideas for improvement
have they submitted? Has scrap or waste been reduced? How about
complaints to HR? Have they dropped. One could make a quick estimate of
the cost of visiting HR several times for complaining. Has the group's
relationship with other departments improved? If so, is there now a
"cost avoidance", i.e., the cost of lost productivity that has
now been avoided because of a better relationship?
Attorneys' fees - Have they gone down? Check it. Company
suits may have dropped noticeably after empowerment.
Group benefits - Convene a group of people to brainstorm
these "soft" costs and ways to estimate them.
Best companies - Take a copy of
The 100 Best Companies to Work for in America with you to your presentation. This
book clearly demonstrates a relationship between enlightened work
concepts and performance.
Whatever you do, keep at it.
The "hidden" costs of restricting human potential in the
workplace are staggering!