By the book

Finding the right balance between employee autonomy and managerial control is difficult, explains John Philpott

I recently spent a long day anxiously waiting for an NHS district nurse to attend to my elderly and infirm mother. She had suffered a head injury in a fall and, though not requiring emergency treatment, needed urgent attention.

The request for help was logged with the call centre at 7.30am. But the apologetic – and always caring – nurse did not arrive until 5pm. The logged call had entered the system as normal, but nobody had checked to confirm it was being acted on until I embarked on a series of follow-up enquiries.

If only, I concluded, a member of the call centre staff had used their discretion to ensure that matters were in hand rather than sticking rigidly to set procedure. The system, it seemed, was low in what students of people management refer to as “discretionary behaviour” – staff using their ability, motivation and opportunity to act flexibly. 

On reflection, however, my conclusion changed. I didn’t want a nursing service reliant on staff exercising discretion – I wanted controls and procedures that guaranteed efficiency.

By coincidence, my brewing scepticism of the merit of discretionary behaviour was fuelled that same evening when listening to a radio review of Inside Story, the book of memoirs in which Greg *** offers his take on the events that led to him standing down last January as director general of the BBC. *** is a devotee of the empowerment school of management. On joining the corporation in 2000 he announced his mission was to “cut the crap”, which translated into freeing staff from tight managerial procedures in order to release their creativity. Indeed, in a classic example of theory interacting with practice, ***’s BBC provided active research subject matter for the empowerment guru Rosabeth Moss Kanter.

Yet while ***’s style won him a reputation as an inspirational leader, as evidenced by the mass demonstration of support by BBC staff following his resignation, it also ultimately brought about his downfall. Whatever the advantages of empowering staff to use their discretion, in the context of what the Hutton report described as “defective” journalistic procedures, a reporter such as Andrew Gilligan was able to sow the seeds of a whirlwind that ended up seriously damaging the corporation.

In their very different ways, both the Gilligan affair and my personal experience of the NHS show that there are limits to the efficacy of discretionary behaviour as a means through which organisations pursue their objectives. In some instances employee discretion may not offer the best route to high performance. But even where discretionary behaviour is an obvious virtue, checks and balances are needed to prevent it from turning into a vice. The task facing managers is thus to decide in which circumstances it is a good idea to allow staff autonomy over how they do the job, and if so, how best to manage that autonomy.

In cases where autonomy is deemed desirable, one option for managers is “constrained discretion”. This involves setting clear performance targets but empowering employees to determine how they go about meeting these. The principle is most overtly articulated in the realm of public policy. For example, constrained discretion underpins the setting of UK interest rates: the Bank of England’s monetary policy committee (MPC) decides when it is right to raise or lower rates but HM Treasury determines the rate of inflation around which the MPC aims to maintain economic stability. 

However, as shown by the government’s frustrating experience in managing improvement in the public services, finding the right balance in workplace situations between discretion and constraint is difficult. Performance targets are, at best, an inadequate method of controlling how staff work, and at worst create perverse incentives to “cheat” to allow the targets to be met. This suggests the need for alternative formulations of the constrained discretion model. 

One possibility is to involve staff in setting their own targets based on their knowledge of the job and the needs of customers and clients. But in any such formulation the key ingredient must be a strong degree of responsibility on the part of individuals or teams. Employees given the ability, motivation and opportunity to exercise discretion also need to be aware of the consequences of their behaviour, whether positive or negative, as facilitated by reward and performance management systems. Responsibility is a necessary check on autonomy – without it, the potential risks of discretionary behaviour can outweigh the potential advantages.

John Philpott is chief economist at the Chartered Institute of Personnel and Development