THE RELATIONSHIP BETWEEN EMPLOYEE EMPOWERMENT AND TEAM PERFORMANCE

PAN MEl PING

This project is submitted in partial fulfilment of the requirements for a Bachelor of Science with Honours (Human Resource Development)

Faculty of Cognitive Sciences and Human Development UNIVERSITI MALAYSIA SARA W AK

(2011 )

AKNOWLEDGEMENT

First and foremost, I would like to thank God for His blessing throughout my three

years of studies in LlNlMAS and also His guidance in leading me to complete this

thesis. He has given me adequate strength, wisdom, and courage to face all the

obstacles throughout the whole process of completing this thesis. Hereby, I would

like to give all the honours to my God.

I would also like to express my utmost gratitude towards my supervIsor, Miss

Victoria Jonathan who had spent her valuable time and efforts in giving guidance and

advices to assist me in completing this thesis successfully. I am thankful for her

valuable suggestions and support from the beginning till the final level of completing

this thesis.

Furthennore, I would like to thank SOCSO who allowed the conducting of this

project and provided valuable infonnation for this project. In addition, I really

appreciate to all the respondents for their kindest cooperation and efforts of spending

time to answer my questionnaires.

Moreover, I would like to give my deepest gratitude to my parents who had been so

supportive to me. Their understanding and supports motivated me to continue doing

my thesis especially when I faced obstacles in completing my thesis.

Lastly, I would like to thank to my fellow friends who had offered support and helps

to me along the way completing this thesis. I truly appreciate their willingness to

share infonnation and guidelines to me and their assistance that enabled me to finish

my thesis successfully.

TABLE OF CONTENTS

Page

Acknowledgement

Table of Content 11

List of Table VI

List of Figure Vlll

Abstract IX

Abstrak X

CHAPTER 1: INTRODUCTION

1.0 Introduction

1.1 Background of the study

1.2 Problem Statement 3

1.3 Research Objective 6

1.3.1 General Objective 6

1.3.2 Specific Objective 7

1.4 Conceptual Framework 7

1.5 Research Hypotheses 8

1.6 Definition of Terms 9

1.6.1 Employee Empowerment 9

1.6.2 Psychological Empowerment 9

1.6.3 Shared Responsibility 10

1.6.4 Shared Information II

11

1.6.5 Creativity on the Job 11

1.6.6 Team Peciormance 11

1.7 Significance of the Study 12

1.8 Limitation of the Study 13

1.9 Conclusion 14

CHAPTER 2: LITERATURE REVIEWS

2.0 Introduction 15

2.1 Theories Related To Empowerment 15

2.1.1 Frederick Hertzberg's Two Factors of Theory 16

2.1.2 Maslow's Hierarchy of Needs Theory 17

2.2 Theories Related To Team Performance 18

2.2.1 Goal-Setting Theory 19

2.2.2 Tuckman's Stages of Team Development 20

2.3 Employee Empowerment 24

2.4 Team Perfonnance 30

2.5 The Relationship between Employee Empowerment and 34

Team Performance

2.5.1 Psychological Empowerment and Team 34

Performance

2.5.2 Shared Responsibility and Team Performance 35

2.5.3 Shared InfOlmation and Team Performance 37

2.5.4 Creativity on the Job and Team Performance 38

2.6 Conclusion 39

JIl"" •

CHAPTER 3: RESEARCH METHODOLOGY

3.0 Introduction 40

3.1 Research Design 40

3.2 Research Location, Population and Sample 41

3.3 Research Instrument 43

3.4 Pilot Test 46

3.5 Data Screening 47

3.6 Validity and Reliabilty 47

3.7 Data Collection 48

3.8 Data Analysis 49

3.8.1 Descriptive Statistics 49

3.8.2 Inferential Statistics 50

3.9 Conclusion 52

CHAPTER 4: FINDINGS AND DISCUSSION

4.0 Introduction 53

4.1 Data Screening Test Result 53

4.2 Respondents' Demographic Characteristic 54

4.3 Exploratory Factor Analysis 56

4.4 Validity and Reliability 60

4.5 Findings for the Relationship between Employee 61

Empowerment and Team Performance Using Pearson

Correlation

4.6 Summary of Findings 67

4.7 Conclusion 68

IV

CHAPTER 5: SUMMARY, RECOMMENDATION AND CONCLUSION

5.0 Introduction 69

5.1 Summary of the Study 69

5.2 Contributions of Research 71

5.2.1 Theoretical Contribution 71

5.2.2 Contribution to Human Resource Practitioner 73

5.2.3 Contribution to Organization 74

5.3 Recommendations 74

5.3.1 Recommendations for Human Resource Practitioner 75

5.3.2 Recommendations for Organizations 75

5.3.3 Recommendations for Future Researchers 76

5.4 Conclusion 77

REFERENCE 78

APPENDIX A Research Questionnaire 90

APPENDIXB The Result of the Analysis 103

APPENDIXC Research Permission Letters 129

v

LIST OF TABLE

Table 3.1

Five Point Likert Scales

Page

44

Table 3.2

Summary of Questionnaire 45

Table 3.3

Alpha Coefficient for Each Section in theQuestionnaire 46

Table 3.4

Interpretation of the Correlation Coefficient, r 51

Table 3.5

Summary of the Statistical Method Used 52

Table 4.1

Data Screening Test Result 54

Table 4.2

Demographic Characteristics Profile of the Respondents 55

Table 4.3

Factor Analysis Result-Item Validity 56

VI

Table 4.4

Goodness of Data 60

Table 4.5

Correlation Analysis Result of the Psychological Empowerment and Team

Perfonnance 61

Table 4.6

Correlation Analysis Result of the Shared Responsibility and Team

Performance 63

Table 4.7

Correlation Analysis

Performance

Result of the Shared Information and Team

64

Table 4.8

Correlation Analysis

Perfonnance

Result of the Creativity on the Job and Team

65

Table 4.9

Summary of Alternative Hypotheses Result 67

VII

LIST OF FIGURE

Page

Figure 1.0:

Diagram of conceptual framework. Demonstrate the relationship between

employee empowerment ands team performance. 8

Figure 2.0

Stages ofTeam Development 21

Vlll

ABSTRACT

THE RELATIONSHIP BETWEEN EMPLOYEE EMPOWERMENT AND

TEAM PERFORMANCE

Pan Mei Ping

This study aims to identify the relationship between employee empowerment and

team perfonnance. The study was done in a statutory body in Sarawak. A total of 72

queationnaires were usable for this study. The data that collected were analyzed using

Pearson Correlation Analysis to identify the relationship between team member's

pychological empowerment, shared responsibility, shared information, and creativity

on the job with team performance, The result obtained indicated that there is strong

and significant relationship between team member's pychological empowerment,

shared responsibility, shared information, and creativity on the job with team

performance. The contributions of this study and recommendations for human

resource practitioners, organizations and future researchers were also further

discussed.

....-- .....,.-­

ABSTRAK

HUBUNGAN ANTARA PENGAGIHAN KUASA PEKERJA DENGAN

PRESTASI PASUKAN

PanMei Ping

Kajian int bertlljuan untuk mengenalpasti hubungan antara pengagihan kuasa

pekerja dan prestasi pasltkan. Kajian ini telah dilakukan di sebuah badan berkanun

di Sara.vak. Sebanyak 72 borang soal selidik yang boleh digunakan untuk kajian into

Data yang dikumpul dianalisis dellgall menggltllakan AnaUsis Korelasi Pearson

llntllk menenalpasti hubungan antara pemberdayaan psikologi, tanggungjawab

bersama, pengkongsian maklumat, dan kreativiti ke alas kerja dengan prestasi

pasllkall. Keputusan yang diperolehi menunjukkan bahawa ada wujudnyahubungan

yang kuat dan signifikan antara pemberdayaan psikologi, tanggung jawab bersama,

berkongsi maklumat, dan kreativiti ke alas pekerjaan dengan prestasi pasukall.

Sllmbangan dari kajian int dan cadangan lmtllk para pengamal sumber manlfsia,

organisasi dan penyelidik masa depanjuga dibincangkan lebih ianjltt.

x

--,...-- -....,..

CHAPTER 1

INTRODUCTION

1.0 Introduction

There are ten sections in this chapter. This chapter covered background of

the study in relation to a general overview of the study: the relationship between

employee empowerment and team performance. In this chapter, general problem

that stated is reflected to this study. The research questions, objectives of the

research, conceptual framework, research hypotheses, and definition of terms

were developed and these sections were a basic guide to the researcher to have

better understanding on the extent to which this study is concern. Besides that,

this chapter also discussed about the importance of the study. Finally, chapter one

is ended with a conclusion.

1.1 Background ofthe Study

In this era of rapid change, organizations need to align with the

environment in order to maintain their effectiveness and competitiveness. So, the

organization needs to readjust or adapt with rapid change environment in order for

them to survive. Spreitzer (2007) mentioned that the organization needs the

knowledge, ideas, energy, and creativity of every employee, from front line

workers to the top level managers in the executive suite in order to be success.

!"'"' 'illP

According to O'Toole and Lawler (2006) as cited by Spreitzer (2007), the top

management of the organization will accomplish this by empowering their

employees to take initiative without prodding, to serve the collective interests of

the company without being micro-managed, and to act like owners of the business.

A competitive organization will continue to grow. Thus, the management

of the organization needs to be systematic in order to ensure that the flow of

management inside the organization is run smoothly. Employee empowerment is

an important feature of successful management within an organization. Nowadays,

most of the organizations practice the concept of empowerment among the

employees by delegating the authorities or power to the employees within the

team to handle tasks that given by the employer.

Employee empowerment refers to the delegation of power and

responsibility from higher levels in the organizational hierarchy to lower level

employees, especially the power to make decisions (Baird & Wang, 2010). The

constitution of the employee empowerment is the psychological empowerment

and seven dimension modeL The psychological approach views empowerment as

various psychological cognitions that contribute to enhanced intrinsic motivation

(Yang & Choi, 2009). Based on the perspective of psychological empowerment,

Thomas and Velthouse (1990) cited in Yang and Choi (2009) explained that the

psychological cognition of employee empowerment include meaningfulness,

competence, choice and impact Another seven dimensions of empowerment was

suggested by Petter et al (2002). It is included power, decision making,

information, autonomy, initiative and creativity, knowledge and skills and

responsibility.

Team is the basic building block of the organization (French & Cecil,

1995). A team is a collection of people who regularly interact to pursue common

goal (Schermerhorn, 2008). It is a small group of people with complementary

skills who work work together in order to achieve the common goaL Within the

team, they are holding themselves mutually accountable for performance result.

2

According to Gemuenden et al. (1990) cited in Hoegl and Gemuenden (2001),

team performance can be defined as the extent to which a team is able to meet

established quality and cost and time objectives.

Hur (2006) explained that empowerment can occur at various levels, such

as individual, group, and community. The empowerment of the employee can be

done in a team. According to Liu, Fellowes, and Chiu (2006), it is believed that

motivated and empowered employees enhance their productivity and performance

(e.g., Schein, 1980; Vroom 1964). This shown that the empowerment at individual

level can increase their performance in team.

1.2 Problem Statement

Most of the researchers claimed that empowerment can be defined in two

ways: the situational approach and the psychological approach. Situational

approach is where the higher-level management passing the power to employees

by involving them in decision making. On the other hand, psychological

empowerment emphasize on motivational processes on employees. In the past, the

organizational researchers have focused their work on empowering management

practice. This means that most of the organizations are more focused on the

situational approach of empowerment without realizing that empowerment also

can have various psychological cognitions that contribute to enhanced employees'

intrinsic motivation. Jf simply sharing or delegating power to the employees does

not necessarily ensure employees' state of mind to work hard and increase

productivity. The lack of understanding about the concept of empowerment from

the psyehological perspeetive, the top management might not be able to develop

an effective empowerment program for the employees. This is because an

effective empowerment program can increase and enhance employees' intrinsic

motivation. According to Yang and Choi (2009), higher intrinsic motivations lead

to higher performance. Thus, this study will look further on the relationship

between employee empowerment and team performance from psychological

perspective.

3

In team, every team member has their own responsibility to improve

performance of the team. According to Yang and Choi (2009), the empowemlent

in team can be affected by a responsibility for the outcomes of team members'

work. Team empowerment requires a general responsibility that team members

enable to track their own performance (Dew, 1996 as cited in Yang and Choi,

2009). So, it is vital to empower team members by giving them responsibility so

that they themselve able to monitor their own perfomance and the performance of

the team. According to Kirkman and Rosen (1997), when the team members

believe their team has higher responsibility to deal with significant tasks and

activities for its organization, they are likely to feel intrinsically motivated.

According to Kirkman and Rosen (1997), the sense of higher responsibility that

team members experience, they will likely more proactive and decisive compared

to those of the members of less empowered team. Therefore, this study will look

into on how team member's shared responsibility can contribute to team

performance.

For accomplishing higher team performance, team members need to feel

they have some influence in decision making (Yang and Choi, 2009). So, team

members need information when they make decisions. In order to do so, team

members need to be empowered so that they able to seek necessary information

and shared the information within the team. Some studies support that the

information necessary to make decisions is viewed as one of the key elements of

empowerment (Lawler, 1986 as cited in Yang and Choi, 2009). Furthermore, team

members will put their effort in obtaining the required information so that they

able to improve their performance. Beside that, they also required tool necessary

to accomplish job tasks and learning the skills related to their own jobs. Therefore,

this study will look into on how shared information among the team members can

influence performance ofthe team.

Pirola-Merlo and Mann (2004) as cited in Yang and Choi (2009) argue

that creativity makes an important contribution to team performance. To be

creative on the job which means the team members can have the freedom to be

4

innovative in accomplishing their job. For example, the management have give

empowerment to the team members to come out new ideas to improve the team

performance. In the western culture, employees are encouraged to be creative as

long as the outcome of the work is meeting the desired standard. From western

culture, they are willing to take risk. In the other hand, the culture in Asia, they

likely more conservative and tend to stay in their comfort zone whereby they

might not want to take risk to do something different in their job. Due to this

problem, the top management might not willing to let their employees to be

creative on the job and viewed it as a not necessary thing to do. Therefore, this

study looked further on the influence of team member's creativity on the job on

team perfornlance.

According to DeShon, Kozlowski, Schmidt, Milner and Wiechmann

(2004), organizations have begun to use teams to a much greater extent and it is a

major issue for the organization on how to capatalize teamwork so as to make it

work better. Sundstrom (2000) as cited in Stashevsky and Koslowsky (2006)

found that the surge of work group applications can be found in the organization

ranging from production, service, management and projects. Therefore, team

performance remains a major issue for organizational researchers (Stashevsky &

Koslowsky, 2006). This research examined whether the performance of the team

will be increase if the organization practices employee empowerment.

The study about the relationship between employee empowerment and

team performance is limited at Malaysia. From the previous researches that had

done, most of the study that related is done on foreign country. According to

Eylon and Eu (1990), culture may also moderate the effectiveness of employee

empowerment. For example, one of the recent research that done by Yang and

Choi (2009), the location that they focused on is at USA. Gondal and Khan (2008)

studied the relationship between team empowerment and team performance on

telecommunication industry that located at Islamabad, Pakistan. The

empowerment system could be varied according to the geographical area, culture,

5

nonn and value. So, the result that obtain might be influence according to

difference of empowennent system.

Based on the research that had done by Yang and Choi (2009), they

suggest that employee empowennent programs should consider different

dimensions of empowennent. This is because it will be unclear for the managers

and organizations to design and implement a successful empowennent program if

they did not fully understand the empowennent. Thus, psychological

empowennent is added in this study in order to see intrinsic motivation among the

employees that can influence the perfonnance of the team. The addition of

psychological empowennent can gain greater insight about the relationship

between employee empowennent and team perfonnance.

Therefore, the study will attempt to answer the following question: What

is the relationship between employee empowennent and team perfonnance?

1.3 Research Objective

In this section, general objective and specific objectives are stated as an

aim for this study to achieve.

1.3.1 General Objective

The main purpose of this research is to study the relationship between

employee empowennent and team perfonnance.

6

1.3.2 Specific Objective

The specific objectives of this study are to detelIDine:

I. To identify the relationship between team members' psychological

empowelIDent and team perfolIDance.

2. To identifY the relationship between team members' shared responsibility

and team perfolIDance.

3. To identifY the relationship between team members' shared intolIDation

and team perfolIDance.

4. To identifY the relationship between team members' creativity on the job

and team perfolIDance.

1.4 Conceptual Framework

The framework shows the relationship between the employee

empowelIDent and team perfolIDance. The framework is used to develop

objectives and instrument for this research. In this research, independent variables

and dependent variable is adapted from two previous researches.

Gondal and Khan's (2008) research and Yang and Choi's (2009) were

studied about the team perfolIDance. In their research, the independent variables

that used in their research were different with each other. Gondal and Khan (2008)

studied the impact of the team empowelIDent on team perfomlance. So, the

independent variables that being studied by Gondal and Khan (2008) was

psychological empowelIDent whereas the dependent variable was team

perfolIDance. Furthemlore, another three independent variables of employee

empowelIDent for this research are adapted from Yang and Choi"s (2009) research

which is shared responsibility, shared infolIDation, and creativity on the job.

Thus, the sub-variables for employee empowelIDent in this study are

psychological empowelIDent, shared responsibility, shared infolIDation and

7

creativity on the job. While the dependent variable for this research is team

perfonnance. The following conceptual framework demonstrates the relationship

between employee empowennent and team perfonnance.

Independent Variable

Employee Empowerment

Psychological Empowennent

Shared Responsibility

Shared lnfonnation

Creativity on the job

Dependent Variable

Team Perfonnance

Figure 1.0: Diagram of conceptual framework. Demonstrate the relationship

between employee empowennent ands team perfonnance.

1.5 Research Hypotheses

Based on the research objectives, the following hypotheses are fonnulated:

H I There is a significant relationship between team members' psychological , ,

empowennent and team perfonnance.

H 2 There is a significant relationship between team members' shared responsibility

and team perfonnance.

H 3 There is a significant relationship between team members' shared infonnation

and team perfonnance.

H 4 There is a significant relationship between team members' creativity on the job

and team perfonnance.

8

- t

1.6 Definition of Terms

For this section, there are two types of definitions included for each tenn

which is the conceptual definition and operational definition. The conceptual

definition is to tell the concept of the tenns, but it cannot be measure or observe.

Operational definition identifies one or more specific observable conditions or

events and then tells the researcher how to measure that event.

1.6.1 Employee Empowerment

Conceptual Definition

Conger and Kanungo (1988) cited in Ugboro (2006) define empowennent as a

process of enhancing feelings of self-efficacy among the organizational members

through the identification of conditions that foster powerlessness, and through

their removal by both fonnal organizational practices and infonnal techniques of

proving efficacy infonnation.

Operational Definition

In this study, the operationalized concepts used to measure are: psychological

empowennent, shared responsibility, shared infonnation and creativity on the job.

1.6.2 Psychological Empowerment

(;onceptual Definition

According to Spreitzer (1995), psychological empowennent refers to an

individual's experience of intrinsic motivation that is based on cognitions about

himselfor herself in relation to his or her work role.

Operational Definition

In this study, psychological empowennent refers to: shared meaningfulness of

task, self-detennination, competence, and impact. According to Thomas and

Velthouse (1990) cited in Spreitzer (1995), meaning is the value ofa work goal or

9

purpose, judged in relation to an individual's own ideals or standards. So in this

study, shared meaningfulness of task refers to team member's feel of how

meaningful hislher task is. According to Deci, Connell, and Ryan (1989) cited in

Spreitzer (1995), self determination is an individual's sense of having choice in

initiating and regulating actions. In this study, self-determination refers to the

team member's autonomy or freedom in making decision and doing job within the

team. According to Gist (1987) cited in Spreitzer (1995), competence refer to

self-efficacy, is an individual's belief in hislher capability to perform work

activities with skill. In this study, competence refers to team member's confidence

and believes that they are capable to perform hislher job activities in the team with

their knowledge and skills. According to Ashforth (1989) cited in Spreitzer (1995),

impact is the degree to which an individual can influence strategic, administrative,

or operating outcomes at work. In this study, impact is operationally defined as

the team member's perception of his or her capability to influence hislher team.

1.6.3 Shared Responsibility

Conceptual Definition

According to Cummings and Anton (1990) cited by Bergsteiner & Avery (2010),

they define responsibility as a state in which the individual perceives an obligation

for a situation or event.

Operational Definition

In this study, shared responsibility refers to the team member's shared equal

responsibility within the team, ability to handle difficult problem or issues without

waiting for approval of formal authorities; and willing to take risk and learn from

their mistake.

10

... p

1.6.4 Shared Information

Conceptual Definition

According to Spreitzer (1995) cited in Yong & Choi (2009), infonnation IS

defined as including competence to do job.

Operational Definition

In this study, shared infonnation is defined as the team member's shared

infonnation that is necessary in order to help them in making the decision and

improve their perfonnance. The infonnation may include job related knowledge,

and/or skills, that are necessary and valuable for team perfonnance.

1.6.5 Creativity on the Job

Conceptual Definition

According to Yang and Choi (2008), creativity is refers to the freedom to be

creative on the job.

Operational Definition

In this study, creativity refers to the team member's freedom to be creative on the

job.

1.6.6 Team Performance

Conceptual Definition

According to Gemuenden et al. (1990) cited in Hoegl & Gemuenden (2001), team

perfonnance can be defIned as the extent to which a team is able to meet

established quality and cost and time objectives

Operational Definition

In this study, the team perfonnance refers to measures of: work satisfaction and

team cohesiveness. Gondal & Khan (2008) stated that work satisfaction relates to

11

personal satisfaction of team members and their desired to work in teams in the

future. In this study, work satisfaction refers to team members' feeling of

satisfaction toward their job in term of their salary, promotion and recognition.

According to Daft (2009), team cohesiveness is defined as the extent to which

members are attracted to the team and motivated to remain in it. In this study,

team cohesiveness refers to the team members showing a spirit of togetherness

and helping their team members solve conflicts without residual hard feelings.

1.7 Significance ofthe Study

This study is significant for team leaders and top management to realize

the importance of employee empowerment as a means enhancing performance. It

is hoped that top management of the organization will take the advantage of this

research and will apply this approach in order to improve team performance. This

study suggests that organization following the employee empowerment approach

can gain advantages. Employee empowerment can enhance both quantity and

quality of teamwork. Moreover, the findings of this research will provide

empirical data for team leaders, top management, and team members to help them

create an empowered environment for better team performance. The

empowerment concept will help to motivate the employees and give the employee

freedom for them to perform. Beside that, the result and finding of this study will

give direction to the team leaders and the organization to develop a better

empowerment program.

Furthermore, this study is important for the team members or employees

of a particular organization so that they understand the concept the empowerment.

When they are empowered by the top level management to do task-related

activities or involving in decision making, they can take this opportunity to

develop their self-determination and their own career development.

12

,...

The study will also useful to the researcher. This study will provide an

insight about the relationship of employee empowerment on team performance

within organization in Malaysia. Then this can help to increase the understanding

of the researchers of the concept of the empowerment and how it impact on the

performance of a team.

1.8 Limitation of Study

This study was conducted at one statutory body in Sarawak. Therefore, the

result that had obtained cannot be generalized to other organization in Malaysia

since that only one section of the employees of the organization was studied.

Furthermore, this study focused on only four variables of employee

empowerment which are psychological empowerment, shared responsibility,

shared information and creativity on the job. The empowerment from

psyhological perspective is looking more into inner part while the other three

variables are more to external part. Although the view of psychological

empowernlent is different compared to the other three variables, but these four

variables have significant influence on team performance. Based on the previous

research done by Ghondal and Khan (2009), they focus on team empowerment in

psychological perspective. They concluded that there is significant positive

relationship between team empowerment and team performance. The other three

variables which are shared responsibility, shared information and creativity on the

job was adapted from Yang and Chors (2009) study also shown that these three

variables have significant relationship with team performance. In this study, the

relationship between four variables of employee empowerment and team

performance were retested because the researcher want to see whethers employees

in the organization at Sarawak have experienced employee empowerment

internally and externally and does it contribute to team performance. In order to

gain wider view of the empowerment, the researcher could consider different

dimensions of the empowerment (e.g: autonomy, power, knowledge and skills,

etc).

13