AFM280 Lecture Notes - Lecture 14: Organizational Chart, Job Satisfaction, Flat Organization

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lilacmouse857

17 May 2018

School

University of Waterloo

Department

Accounting & Financial Management

Course

AFM280

Professor

D'arcy Delamere

For unlimited access to Class Notes, a Class+ subscription is required.

Work Chapter 14- Organizational structure

ORGANIZATIONAL STRUCTURE

• Some structures tend to favour vertical flows:

• Download, from the top to the bottom of the organization through different levels of

managers (e.g., directives, instructions, goal settings)

• Upward, from the bottom to the top (e.g., employee suggestions for improvement)

• Horizontal flows of information between cross-functional teams or between departments at the

same level

• This chapter discuss how the organization as a whole affects the attitudes and behaviours of its

members

• Organizational structure- formally dictates how jobs and tasks are divided and coordinated between

individuals and groups within the company

WHY DO SOME ORGANIZATIONS HAVE DIFFERENT STRUCTURES THAN OTHERS?

• Organizational chart is a drawing that represents every job in the organization and the formal

reporting relationships between those jobs.

• Helps organizational members and outsiders understand and comprehend how work is

structured within the company

• Real companies would have the boxes filled up with names and job titles

ELEMENTS OR ORGANIZATIONAL STRUCTURE

• Organizational charts can illustrate the 5 key elements of an ogaizatio’s structure.

• Those 5 key elements describe how work tasks, authority relationships, and decision-making

responsibilities are organized within the company

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WORK SPECIALIZATION

• Work specialization is the way tasks in an organization are divided into separate jobs.

• How many tasks does any one employee perform?

• Work specialization is a never-ending trade-off among productivity, flexibility, and worker

motivation

• E.g. Henry Ford divided tasks among his manufacturing employees to such a degree that

each employee might only perform one single task, repeatedly. This make the employees be

extremely productive at doing (highly specialized) that one thing but it also means

employees fail to update or practice other skills

• High levels of specialization might be acceptable in larger firms with more employees, but

they can be problematic in smaller firms, whose employees often have to be flexible in their

job duties. Also, lead to low job satisfaction because no variety

CHAIN OF COMMAND

• Chain of command within an organization essetially ases the uestio ho epots to

ho?, ad sigifies foal authoity elatioships

• Organization depend on this flow of authority to attain order, control, and predictable performance

• It’s eoig oo fo a positio to epot to to or more different managers

SPAN OF CONTROL

• A aage’s span of control represents how many employees each manager in the organization has

responsibility for- refer to Figure 13-1

• At the top it’s a ao spa of otol, at the otto thee is a ide span of control

• How many employees one manager can supervise effectively? Look at narrow and wide spans of

control

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• Narrow spans of control allow managers to be much more hands-on with employees, giving them

the opportunity to use directive leadership styles while developing close mentoring relationships

with employees

• The narrower the span of control, the more productive employees would become

• If it becomes too narrow, employees can become resentful of their close supervision and

long for more latitude in their daily decision making

• Try to find the right balance

• An organizatio’s spa of otol affets ho tall o flat its ogaizatioal hat eoes

• E.g. top panel of figure 13-1 depicts a tall structure with many hierarchical levels

• Bottom depicts a flat organizational with few levels

• Whe a ogaizatio eoes talle

• there are more layers of management, meaning have to pay more management salaries

• communication becomes more complex as each new layer becomes one more point

through which information must pass when travelling upward or downward

• the ability for an organization to make decisions becomes slower because approval must go

through authority at every step of the hierarchy

CENTRALIZATION

• centralization reflects where decisions are formally made in organizations.

• If only the top managers can make decisions, the organization has a highly centralized

structure

• If decision making is pushed down to lower-leel eployees, the it’s deetalized

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Document Summary

Elements or organizational structure: organizational charts can illustrate the 5 key elements of an o(cid:396)ga(cid:374)izatio(cid:374)"s structure, those 5 key elements describe how work tasks, authority relationships, and decision-making responsibilities are organized within the company. Work specialization: work specialization is the way tasks in an organization are divided into separate jobs, how many tasks does any one employee perform, work specialization is a never-ending trade-off among productivity, flexibility, and worker motivation, e. g. Henry ford divided tasks among his manufacturing employees to such a degree that each employee might only perform one single task, repeatedly. Also, lead to low job satisfaction because no variety. Chain of command: chain of command within an organization esse(cid:374)tially a(cid:374)s(cid:449)e(cid:396)s the (cid:395)uestio(cid:374) (cid:862)(cid:449)ho (cid:396)epo(cid:396)ts to (cid:449)ho(cid:373)? (cid:863), a(cid:374)d sig(cid:374)ifies fo(cid:396)(cid:373)al autho(cid:396)ity (cid:396)elatio(cid:374)ships. It"s (cid:271)e(cid:272)o(cid:373)i(cid:374)g (cid:272)o(cid:373)(cid:373)o(cid:374) fo(cid:396) a positio(cid:374) to (cid:396)epo(cid:396)t to t(cid:449)o or more different managers: organization depend on this flow of authority to attain order, control, and predictable performance.

Related Questions

Read the article below and write a brief (1-2 paragraph) summary. This assignment should be approximately 250 words . Complete this assignment as a Word document.

Time to Scrap Performance Appraisals

Times have changed. More and more companies have decided to radically change (read âscrapâ or âre-engineerâ) their performance appraisal process.

Last week at our research conference we spoke with Adobe, Juniper, Kelly Services, and a variety of other companies who have decided to do away with traditional performance ratings and dramatically change the annual appraisal process.

Our research shows that this is a strong and positive trend.

Why the process must change.

Why do companies have annual reviews in the first place? They are an artifact from traditional top-down organizations where we had to âweed outâ the bottom performers every year. By forcing managers to rate people once per year we can have annual talent reviews and decide who gets more money, who to promote, and who to let go.

Coupled with the performance rating is the âpotentialâ rating, which tries to capture an individualâs potential to move up two levels in the organization (the traditional definition).

This approach is based on a philosophy that â we cant totally trust managersâ so weâre going to force them to fit people into these rating scales. And in many companies (around 20%) there are forced distributions, which mandate that some percent of employees are rated at the bottom and only a limited percent can be rated at the top.

The well publicized problems with this process abound. These include:

Employees need and want regular feedback (daily, weekly), so a once-a-year review is not only too late but itâs often a surprise. Regular coaching is the key to alignment and performance.

Managers cannot typically âjudgeâ an entire year of work from an individual at one time (imagine if your spouse gave you an annual review!), so the annual review is awkward and uncomfortable for both manager and employee.

Manager-employee relationships are not 1:1 like they used to be. We work with many leaders and peers during the year, so one person cannot adequately rate you without lots of peer input.

While some employees are a poor fit and likely are poor performers, these issues should be addressed immediately, not at the end of the year.

Some companies really do have a lot of high performers, so forced ranking eliminates great people and damages the culture.

People are inspired and motivated by positive, constructive feedback â and the âappraisalâ process almost always works against this.

The most valuable part of an appraisal is the âdevelopment planningâ conversation â what can one do to improve performance and engagement â and this is often left to a small box on the review form.

Companies are nervous about eliminating this process because:

We need a fair and validated way to distribute compensation increases (donât we?)

We need a record of low performance when we let someone go

We need to capture performance data in an employeeâs profile for future promotion and other talent reviews, development plans, and career migration

We need a way to make sure managers are doing their jobs well.

Well, Iâve probably discussed these issues with 100+ companies over the last five years and our research shows more and more that companies are ready to let this process go.

Organization structures have changed and companies need to be more agile. We have a shortage of key talent and the keys to success now focus on regular alignment, coaching, creating passion and engagement, and continuous employee development.

The new keys to success:

Develop a âfeedback-richâ culture and set of tools (often online, sometimes formal, often informal) that encourages all employees to give each other feedback. Tools from companies like Achievers, Globoforce, and most HR software vendors now enable and make this easy.

Separate the discussions about performance from discussions about potential and future career plans. Yes we need to evaluate people when raise time comes, but that can be a totally different conversation from.

Talk about performance regularly and let employees create their own goals on a regular basis. Force managers to provide ongoing feedback and teach them how to have honest conversations.

Assume that employees already know something about their own performance, and force them to self-assess. People tend to have a good idea of their own strengths and weaknesses â give them an open and positive opportunity to share it. That starts the dialogue about expectations and the match between their self-assessment and that of the organization.

Enable managers to assess performance regularly. Software teams now use Agile tools which evaluate code on a weekly basis. Managers should be giving people feedback regularly. If they learn to do this on a regular basis it will get easier and employees will learn to appreciate it.

Focus managers on hiring the best, so they build a team which strives for 100% high performers. This is never possible of course, but rather than assuming that 20% of your employees will perform poorly, spend more time on assessment, culture, and fit to make sure very few low performers make it into the organization in the first place.

Remember that everyone wants to succeed. If they arenât performing well itâs not necessarily their fault â the organization should take responsibility for helping them find a better fit if possible.

Set and reset goals frequently. Companies that set performance goals quarterly generate 31% greater returns from their performance process than those who do it annually, and those who do it monthly get even better results. This means employees get feedback on a continuous basis (most sales organizations work this way). Read our research for more details.

Beware of pay for performance plans. While many companies (particularly investment banking, sales) have large pay for performance plans, research showsthat these can create perverse behavior. People focus on their own goals at the expense of the organization. In sales related roles this process works well â when you move to customer service, engineering, and other âbuilderâ roles they can create problems.

Give your leaders a cultural framework and set of values to work from. Companies like Juniper and Deckers (Uggs shoes) focus very heavily on corporate values, forcing managers to hire and manage to these values. This makes selection easier and enables us to evaluate and coach people against higher level frameworks.

Invest in leadership development. Being a manager is a tough job. Managers at all levels struggle with selection, hiring, training, coaching, and evaluation. Give them time and tools to learn, a framework for feedback, and a continuous development process so they learn how to become better.

Reward talent âproductionâ not talent âhoarding.â If you pay your managers to âproduce output,â they will focus heavily on talent performance and evaluation. This may be a good thing, but ultimately companies thrive by building skills â so in addition to encouraging managers to produce good work, incent them to produce good talent as well.

Iâve had the opportunity to study HR and performance management for almost 15 years now, and this topic has been controversial for a long time. In todayâs globalized,talent constrained workplace itâs clear to me that the traditional appraisal has to change.

Businesses thrive on agility, speed, passion, and alignment. The process of driving and measuring performance has to do the same.

AFM280 Lecture Notes - Lecture 14: Organizational Chart, Job Satisfaction, Flat Organization

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