Ownership, empowerment, and productivity: Some empirical evidence on the causes and consequences of employee discretion

This paper uses a sample of professional engineers employed in the public a nd private sector to investigate the effect of sector employment, indicator s of task complexity, organization size, number of rules, importance, and a ttentiveness and agreement among various principals (customers or clients, peers, mid- and top-level management, and politicians) on both employee dis cretion and a subjective measure of employee productivity. The results show that disagreement among important and attentive proximate principals (mid- level managers) expands discretion, but disagreement among important and at tentive distant principals (top executives and politicians) reduces discret ion. Sector has no direct or indirect effect on discretion. When customers or clients and peers are important and attentive principals, discretion inc reases, and so does productivity. Monitoring by mid-level management has no effect on productivity. Because disagreement among distant principals is g reater in the public sector devolution of authority alone is unlikely to in crease public sector productivity. (C) 2000 by the Association for Public P olicy Analysis and Management.