Does Self-Management Work?

In the early 1990s, Taco Bell's management was faced with a dilemma. It wanted to create thousands of new locations, including stores and kiosks, at which its line of Mexican-themed products could be sold. At the same time, it was experiencing a shortage of capable managers in a fast-food industry known for low-paying management jobs. One part of the solution was to create fewer, higher-paying management positions. The other was to train thousands of entry-level workers at its stores to manage themselves. This enabled Taco Bell to assign one manager to several stores and to increase the "span of control" for area managers from ten or so units to several times that many.

Under the "self-management" initiative, employees were trained and given new technology to enable them to hire, train, and supervise their new colleagues; manage the day-to-day inventory of the store; handle the resulting receipts; and deal with personnel problems themselves under the supervision of a "floating" manager responsible for several such stores. They received above-market pay, partially in the form of performance incentives. The result? More highly energized workers, better cost control, higher customer satisfaction, and new ideas for organizing work. One self-managed team, for example, developed a program called "aces in your places," in which team members assumed jobs they wanted to learn during slack business hours, then took their "battle stations" to achieve maximum capacity (up to 50 percent higher) during rush hours.

Read the rest of the Harvard Business School Working Knowledge article here.