Five Steps to Defining an Employee’s Authority

When we delegate authority to an employee, we are actually delegating the power to make decisions. We all want employees who think for themselves, at least when their decisions work out in a way we like. When they don’t, we either chalk it up to the price of experience or forbid the employee from making “those kind” of decisions again.

Trial and error is an expensive training method. Eventually the employee learns the boundaries around his authority, and develops informal guidelines. Defining levels of decision making can save both the boss and the employee considerable grief.

Blanchard and Oncken’s great little book on delegating, The One Minute Manager Meets the Monkey, recommends two levels for delegating employee decision-making authority. “Decide, but ask before acting.” or “Act, then inform me.” While those guidelines are excellent, they still assume that you have some input in defining each decision before it is made. It would be better to teach employees what exactly lies within their authority without asking in advance.

I attended an excellent presentation last week by David A. Ladensohn, a family business dispute mediator. He parsed delegated decision-making authority into five levels that can be agreed between a boss and subordinate in advance. With a bit of editorial liberty and my thanks to David for his permission, I’d like to share them.

Level One: Decide, but ask me first. This is the basic level for mentoring, teaching critical thinking skills, and widening the employee’s vision of his or her impact on other areas. You encourage the employee to develop a solution, but make it plain that it requires your input, and likely modification, before proceeding with implementation.

Level Two: Decide, but check with me first. This is for an employee whose logic you are beginning to trust. You anticipate approving her decisions, but reserve the right to comment. It is an important differentiation to the employee. In Level One you are teaching basic decision skills. In Level Two you are recognizing the employee’s developing ability, but know there are other factors that she might not be aware of.

Level Three: Decide;  just tell me what you are doing. This is again incremental. You are delegating nearly-free authority. The process of informing becomes more casual, because you don’t anticipate having to review the decision-making process or reanalyze the factors that influenced it. You just want to know what is happening, and have a bit of insurance against a big mistake.

decisionsLevel Four: Decide and act; let me know later. This is the first level of truly dedicated authority. The employee has earned your confidence, and only needs to keep you in the loop.

Level Five: Decide and act; I don’t need to know. This can be limited to certain types of decisions. In its broadest interpretation, it should be reserved for employees who fully appreciate their impact on profitability and other stakeholders.

There is considerable value in defining subsets of latitude in decisions and actions. First, it creates a base of reference that both parties understand. It permits differentiation between types and levels of action; acknowledging that all decisions aren’t equal. It provides a means to for both you and the employee to track and recognize progress in decision-making skills. Perhaps most importantly; it says that ongoing development is both normal and an expected measure of managerial ability.

Most employees learn their authority level by the “naval bombardment” method. They overshoot, then undershoot, and gradually zero in on a target. Providing clear definitions of the differing levels can greatly speed up the process.

 

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