It is counterintuitive, but paying employees more does not make them happier, more productive, or more likely to stay. That has been well documented by hundreds of studies and millions of personal experiences in companies around the world.

That does not justify paying employees less, but it does demand consideration of what other elements need to exist in a company to help people realize their potential. Too often executives assume that happiness can be bought with salaries, ping pong tables, and refrigerators stocked with beer. But employees are not lemmings who can be bribed into being happy and productive; they are, at the risk of sounding obvious, human.

Experts agree that this simple paradigm shift is crucial for businesses of all kinds to maximize the abilities of their people. Benjamin Petter is one such expert who practices what he preaches as the CEO of Avara Construction, a Seattle-based company that is built around an empowered employee model. 

"When you treat someone like an employee, you miss the opportunity to tap into their abilities as a person," says Petter. "People rise to the occasion when you trust them, give them added responsibilities, and allow them to take credit for successes and failure."

Pepperdine University described this model in a landmark 2005 study, writing, "Empower employees or accept substandard financial results and possible elimination as a competitive force." And their conclusions have proven to be true as today more and more companies are adapting.

Here are five ways executives can empower their employees today:

1. Don't backseat drive.

Studies have shown that backseat driving is actually more than annoying, it is dangerous, and it is bad for business, too.

Studies have shown that backseat driving is actually more than annoying, it is dangerous, and it is bad for business, too.

"When you micromanage someone, you deprive them of the ability to ever experience success or failure. If their project goes well, they cannot say they did it on their own, and if it goes poorly, it is not totally their fault. Absent those potential results, they are not motivated to do anything," says Petter.

Part of empowering an employee is to "give them enough rope to hang themselves," meaning license to operate autonomously and take responsibility for mistakes.

2. Include people. 

Everybody wants to know the 'why', it is human nature. And employees are no different because, and we are developing a theme here, employees are human. That means that whether the information is necessary for them to do their job or not, they will feel like a part of the broader mission of the company if their questions are answered.

"You have to include people in what the company is doing. Putting them in a box and expecting them to be fulfilled and engaged is nonsense. Our teammates are encouraged to understand the whole business and to contribute their ideas."

Petter is also careful to use terms like 'teammate' instead of 'employee', which is a simple but profound element of corporate culture at Avara.

3. Give people goals. 

Call it what you want: a benchmark; a KPI; a goal; the point is to give people a destination but not the whole map. By doing so they are empowered to find their own way, and over time to find better ways than what you originally had in mind. 

Petter says he thinks every employee should have the opportunity to excel and be compensated for doing exceptional work. "When you create a culture where everyone is an entrepreneur, you begin to fix big problems and accomplish impossible tasks. That means you set out the goal and give people the opportunity to achieve it." 

4. Let go of decisions. 

It can be scary to let other people make pivotal decisions, especially because, as the executive, you have that leadership confidence that makes you feel like you are always right. Without that confidence, you would never be able to make big decisions, but it also makes it hard to let go of them.

Part of empowering an employee has to include letting them make big decisions, sometimes even decisions you do not agree with. The goal is to have people working for the company who are the experts in their domain, which means they are the most capable of making decisions in their area of expertise. No one has ever become an expert by not making decisions. 

5. Win together, lose together. 

There is a catch that comes with empowering employees, and that is stress. And I do not mean your stress, I mean the person who now has more responsibility than ever before. The transition from a managed worker bee to an empowered entrepreneur carries with it a lot of pressure, and that is why the company culture must be about teamwork and unity.

"It can sound sappy when you talk about corporate culture in terms that you usually hear in a locker room pep talk during halftime. But that doesn't change how important it is, you have to win together and lose together," say Petter. "Share in successes and failures and watch people begin to excel under pressure."

What tips do you use to empower employees?