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Consultant Q&A

H. James Harrington Responds

Self-managed work teams have proven to be an effective way of reducing the number of first level managers and increasing employee skills. Unfortunately, as of this date, there has not been adequate data collected to statistically state that self-managed work teams improves organizational performance as measured by return on investment, value added per employee and customer satisfaction. The impact upon the management team varies based upon how much of the manager's activities are delegated to the self-managed work team and how effectively each member of the team is trained to accept these additional requirements. I have seen organizations that have had a very negative reaction to them and others that have greatly improved the employee's moral.
Let's define what a manager does. The following list is a sample:

o Prepares and controls budgets;
o Conducts performance appraisals, hires, terminates employees;
o Develops goals and objectives;
o Follows-up to see that tasks are completed;
o Schedules work; provides backup;
o Reports department status, defines future needs;
o Provides technical guidance;
o Interprets and follows the organization's operating
procedures and values;
o Negotiates acceptable performance standards;
o Ensures compliance to governmental regulations;
o Interfaces with upper management, union representatives and other areas;
o Inspires and motivates employees, provides rewards;
o Provides career guidance to the employees; *
o Develops employees' potential; *
o Solves employee problems that cannot be handled by the employee. *

All items except for the (*) ones can be assigned to the self-managed work team.
Let us assume that the organization has a reasonable span of control of 12 to 20 employees in nonprofessional departments (e.g., Accounting, Manufacturing, etc.) and 10 to 15 employees in professional departments (e.g., Engineering, Sales, etc.), and that the second level span of control is six to twelve first line departments (approximately 120 employees). Let's also assume that everyone is doing a fair day's work for a fair day's pay and assume that all but the (*) items are assigned to the self-managed work team that uses consensus decision-making on items like hiring, appraisal and promotions. This will eliminate 10-20 percent of the first level manager's work. It will also increase the employee's workload by about one employee per year because the assigned tasks are usually rotated and the consensus decision-making process takes longer than when one person makes the decisions. This means that an additional employee will need to be added to each department as the manager is reassigned. For that reason there is no decrease in the department's head count as a result of establishing self-managed work teams unless the employees already have surplus time on their hands. The second level manager should take over the items that are not performed by the self-managed work team and the second level span of control should be reduced to offset this workload to four to six departments.
Since each employee, at times, will need to perform tasks previously assigned to management, it is extremely important that management provide training to all employees on all of the management jobs that are assigned to the self-managed work team. This training should be accompanied with the upgrading of the employee's job description as well as an increase in salary for the increased job responsibility.
Some of the advantages of self-managed teams are:

o More employee involvement and improved morale;
o Elimination of one level of management;
o Employee becomes more organization oriented; and
o Employee gains new skills.

Some of the disadvantages of self-managed teams are:

o Not all of the employees want to do management work;
o Greatly reduce growth path for employees;
o Present first-level managers are often assigned to lower level jobs;
o Expensive to train the employees.

To minimize the impact on the organization we suggest the following:
Start slowly by having the employees first schedule their own workload. This results in about a 10 percent decrease in management workload. To offset this decrease in workload, increase the first line manager's span of control by 10 to 15 percent. Take the 10 percent surplus managers and assign them to non-management jobs that are at the same pay level or higher if possible. Freeze all promotions to first level management and move managers around when openings occur with increase spans of control. Slowly over a two-year period, eliminate the first level of management throughout the organization. Promote the top 10 percent of the managers to second level managers and reassign the remaining surplus managers.
Too often organizations find work in management for the surplus managers. This is often work that was not done before because it was low priority. If the organization did not need to do the work before, it does not need to do it now.
Based upon my experience, self-managed work teams provide an exceptional opportunity for the employees to expand their skills. Unfortunately, many organizations implement the self managed work-team concept without thoroughly considering the impact upon the organization and the amount of training, planning, change management, documentation, and coordination that is required to make the concept work. Be sure your organization has a special budget to cover this cost and has defined how it will measure their return on investment. I recommend that a pilot program be used to define your potential return on investment. It is not for every organization. And it is often viewed as a manufacturing only program when it should apply to all areas of the organization. Certainly professional people should be more capable of self-managing themselves than production workers.
In the long run I believe that self-directed work teams will give way to self-managed individuals. This is where real empowerment occurs.

• John Runyan's Response