Empowerment is the recognition that employees do have skills and can be trusted and therefore authority can be passed down the hierarchy to them. It trusts employees to make decisions within the business. This leads to employees gaining self confidence and therefore leads to higher motivation.
- Employees become more motivated so the firm becomes more productive. This leads to a decrease in the costs per unit and finally an overall increase in the business' profits.
- Also employees will be less stressed at work because decisions are made by people who are involved in the production process so know what they are talking about.
- It is a way of cutting costs but some managers may not take it seriously and not be willing to trust employees enough to allow empowerment to work.