Terms of Employee Engagement – Hierarchy or a Flat Structure?

Everybody these days seems to be obsessed with the idea of organizations having a “flat structure.” People are talking about moving away from a “boss-led” culture and striving in every way to replace their old school hierarchical set-up with an egalitarian structure.

But are we actually dissolving hierarchies and making everyone equally responsible for their work or are we just scratching the surface of the issue and applying varnish over the cuts to make it look perfect on a superficial level?

Before answering this, let us first look at the basic difference between a flat organization and a hierarchical set-up?


Hierarchical/Tall Structure

Organizations that have this kind of a structure follow the layout of a pyramid. Except for the CEO of the company, every employee is subordinate to someone else within the organization. Although these structures provide more opportunities for promotion and thereby motivate employees to perform better, increased bureaucracy might often hinders the organization’s speed to change and grow.

Flat Structure

Organizations that have this kind of a structure have few or no levels between management and the staff level employees. This leads to increased level of involvement by each employee in the decision-making process. But the flip side to this seemingly beneficial set-up is that the employees lack a specific boss to report to, which creates confusion and possible power struggle among management.

So how can you decide which set-up suits your organization best?

Hierarchies do foster best in an authoritarian environment but can also be terribly flawed at times. This inevitably leads to sycophancy, dishonesty, fear, territoriality etc. So it becomes a real challenge to work effectively under these circumstances as messages get distorted as they travel up and down the ladder of command.

But hierarchy is a necessary evil albeit the shortcomings. It is the easiest way to handle complexities. They give us duties and a sense of responsibility. This concentration of control at the top helps groups make decisions more efficiently and avoid conflict over control. Therefore, it becomes very easy to cite where the centre of power lies and if you want to get some work done, you know whom to consult.

But what about flat organizations?

The incentive of high rank that comes with greater respect and admiration, autonomy, power, social support, self-esteem, wellbeing, lower physiological stress, and material resources is something flat organizations lack. This leads to increase in individualism since every employee feels that their opinion is equally important and therefore, taking group decisions becomes very challenging.

Given the mixed effect of both these set-ups, the critical question is when steeper hierarchies will benefit performance and when they will harm it?

Contingency theorists have argued that steeper hierarchies are more helpful in stable, simple, less ambiguous conditions that require little creativity, whereas flatter structures are better for changing, complex, more ambiguous conditions that require a lot of creativity.

Another important factor to be considered is the quality and ability of the individual in charge.

Bales’ classic studies of small groups found that the top-ranking group members spoke 15 times more frequently than the lowest-ranking group members and nearly five times more than the next highest-ranking members (Bales et al., 1951).

So, if you have the most competent employees at the managerial level then they presumably make better decisions. But is such a set-up feasible for every project? May be not.

There is no one correct answer to any problem, the best solution would be to combine the outputs of different group members.

Therefore we can conclude that when groups work on tasks that benefit from a broader range of opinions and perspectives and need more creative inputs, flatter structures should be more advantageous.

Hierarchical organizations have a more “weighted-average” approach. Which may not be democratic. That is, the opinions and ideas of individuals lower in the hierarchy are often solicited, during the team brainstorming session, but the judgments of those at the top are given more weight since they are assumed to have greater expertise.

See how a large telecom infrastructure company managed to increase its employee engagement index by 65%!

The biggest risk is to tackle the corrupting influence of higher ranks in a hierarchical set-up. Studies also suggest that “when individuals were given power they were particularly confident in their beliefs, and thus less likely to incorporate new information that might change their pre-existing attitudes” (Brin˜ol, Petty, Valle, Rucker, & Becerra, 2007; Eaton, Visser, Krosnick, & Anand, 2009). This means that the powerholders will me more rigid and less flexible which might become detrimental to the organization at large in this evolutionary age of change and constant flux.

The sense that one’s actions are personally identifiable and subject to the evaluation of others should act as a constraint upon unchecked power in a hierarchical set-up.

Rather than giving one person the absolute power to take every decision, every employee should be held accountable for their decisions. This is the most essential feature every hierarchical organization must learn from the newly emerging flat structure.

However, according to functionalist theories, hierarchies motivate all individuals to contribute to the group by offering high rank as a reward. But it does not guarantee a net positive level of motivation in the entire organization.

The major factor behind increase in motivation is employee engagement. It is no news that flat organizations have higher levels of engagement as compared to hierarchical organizations where implementing engagement strategies becomes a real since people in possession of lower rank might feel unfairly treated by the group, which would reduce their level of engagement drastically.

Think otherwise? We would love to hear your thoughts in the comments section!

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