HR & Management

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Flat organisational structures may be driving employees away

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A lack of career opportunity was cited by 50 per cent of UK respondents as a key reason for finding employment elsewhere, CEB suggested. The company claimed the issue has consistently topped the list of employee attrition drivers since the annual survey started in 2011.

Increasingly flat organisational structures, and the trending holacracy used by Zappos, may be at the root of this, CEB said. 

At the end of 2013, Zappos CEO Tony Hsieh turned to holacracy after running a pilot with 150 employees. Even Twitter co-founder Evan Williams has implemented holacracy at latest venture Medium

Nearly 14 per cent of Zappos staff chose to take a buyout deal after Hsieh’s announcement that the company would be ridding itself of manager roles and job titles.

Read more about Zappos:

“With upper management positions cut and no signs of returning, there are fewer roles that enable employees to familiarise themselves with management responsibilities gradually,” CEB said. “When someone is eventually promoted, the lack of step-by-step preparation and training leaves them ill-equipped to perform in a more senior role.

“This only exacerbates the UK productivity crisis as half of all promotions today result in underperformance or failure for the first few months. Tellingly, 65 per cent of people regret accepting management positions.”

Brian Kropp, HR practice leader at CEB, claimed that the tools in the modern manager’s armoury are increasingly limited – “apart from money, there are few motivators to offer employees within a flat hierarchy.”

A flat corporate structure comes with many advantages, but it also makes it harder for people to see a clear path for their progress up the corporate ladder, Kropp explained.

He suggested that in a bid to take the next step up, people feel compelled to look beyond their current employer. As a result, frustrations over recognition and career progression are now the key cause of workforce turnover.

Furthermore, it turns out employees sometimes prefer hierarchical relationships over equal ones, according to a study conducted by Stanford Graduate School of Business professor Larissa Tiedens and Emily Zitek, an assistant professor at Cornell University’s Industrial and Labor Relations School. 

This is due to the clarity that hierarchies provide, the report suggested. “Some even complained that these relationships did not make sense,” the researchers wrote.

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