Author: Srikant Chellappa

The Covid-19 has brought about a shift in the way of working patterns in many organizations. For example, working from home (WFH) is becoming mainstream in many industries. If you are a manager or team leader, WFH can provide immense flexibility, especially when working with a remote team. However, the question is: how do you make sure that the work does not suffer? 

There are two sides to working remotely. There are benefits, like having access to a broader talent pool, more efficient workspace utilization, and productivity, as fewer distractions exist. And then there are the drawbacks, like communication issues and the lack of face-to-face interaction. 

Also read: Continuous Feedback: What Is It And Its Benefits

When hiring and managing remote workers, you have to be aware of these potential problems. You need to constantly communicate with your remote workers and be available in case of any critical issues or immediate suggestions. It cannot be easy to keep track of your team always. If we summarize, there can be unique challenges and difficulties that you may encounter while hiring remote workers.

This article will discuss seven remote work best practices that small businesses can begin implementing right away.

Challenges faced, and what are the opportunities?

Remote work has its perks, but it also has its downsides. Let’s have some idea about some of the benefits and challenges :

1. Challenges 

• Isolation

In a physical workplace, people can engage with each other often, and as everyone is close, it’s straightforward to reach out and solve problems. Employees don’t feel lonely, and there is a significant impact on employee productivity if the employee finds himself connected with his coworkers and gets help from his superiors.

While remote work may seem similar to working from home, it’s an entirely different experience. When there are no doors around, and you have your entire house to yourself, it can sometimes be easy to lose touch with the outside world and ultimately feel isolated.

• Decreased Employee Visibility

The chance of being recognized and noticed for your contribution and being included in all relevant company conversations and decisions is gradually decreased in remote working. In a traditional office work environment, the chances of employees getting recognized are much on the higher side.

It is the environment’s visibility that does the job. It usually does not require much effort to be noticed and included as you have face-to-face conversations with your boss, coworkers, and teammates.

In the case of remote workers, the situation is slightly different, and it’s more different if they work on hybrid teams. 

Also read: 4 Creative Team Building Activities

• Lack of Relationships Among Coworkers

Employees who work remotely feel lack of involvement in day-to-day company conversations. It can disable them from getting more opportunities to interact with coworkers and feel like they’re not a part of the company culture; this could also prevent them from being part of decisions that affect their jobs.

• Various Time Zones and Work Schedules

There is a significant advantage of working remotely, and one can work according to his self-made schedule and pace of work. You have the freedom to work independently as long as you are meeting the targets and deadlines. 

Everyone’s time zones and work schedules are different, which makes it difficult to synchronise the work.

2. Opportunities

• It is essential to take time to relax each day, whether it be in the morning with a cup of coffee, lunch with a friend, or even just a quick break to stretch.
• Employees can make personal connections, regularly discuss and exchange their views, and arrange periodic video calls.
• Create a standard time window to share and receive messages and solve each other’s issues and problems.

Best Practices for working remotely

If you are working on a remote team, you might have the temptation to “slack off,” as you don’t have people looking over your shoulder, so working hard won’t be as noticeable as working at an office. However, if your team misses its target, you’ll be the first one to be blamed. Instead, make sure you’re giving your best at all times.

We have jotted here some of the industry’s remote work best practices, which can help you do your work to your full potential without burning out.

• Clear Communication among Employees

One of the key component of remote work best practices is clear communication. When employees work remotely or as part of a remote team for another organization, it’s crucial to establish regular communication among all parties. Often, remote employees spread out across time zones, and it’s not necessarily surprising that communication can be difficult in this kind of setup.

When it comes to remote teams that work across time zones, communication should be the number one priority in terms of top concerns. It’s essential to clarify who needs to communicate with whom at what times (i.e., attempt to avoid writing long email chains so everyone knows who can answer which questions).

It’s also vital for team managers to establish clear guidance when managing different communication methods used by remote teams for members to avoid rookie mistakes and do their jobs efficiently and effectively every day.

Also read: 10 Ways To Improve Communication At Workplace

• Robust Problem Resolution Mechanism

A remote worker is all about you who is the supreme authority as, unlike everyday office work, there is nobody immediately available to solve your problems. There is very little room to head over to someone’s desk and tap their shoulder.

Remote work best practices mainly demand a need to wear a creative problem-solving cap to solve day-to-day problems, and one has to think out of the box to solve any issues they face.

• Accountability 

As a remote team member, it’s vital to be accountable for certain things. “Hold yourself responsible” for carrying out duties and accomplishing tasks about your assigned job. 

Regarding accountability, there must be boundaries about what one has to accomplish as part of their role to move forward from here on out. It’s highly recommended that one hold themselves accountable if they wish to see any positive results in advancing their work.

Accountability also demands that you deliver whatever responsibilities you have. It’s your prime duty to take ownership of your assigned work and adhere to the timeline. It’s essential to make sure each team member is accountable for their actions and feels like they are an equal member of the team. 

If people feel like they aren’t working toward a common goal, they are more likely to slack off or not take any initiative. Plus, you don’t have much leverage over remote employees who don’t feel invested in the work. 

• Using Effective Tools

Remote work is dependent on using practical tools and technologies; it’s an essential aspect of remote work best practices.It’s the robust technology that makes remote work possible to work smoothly. Having the right tools helps increase employees’ productivity whether they are working remotely or onsite.

A single, easy-to-access platform for managing all your work offers an exciting solution. It dramatically reduces the time-to-completion, so whatever project is on the table, you can know what’s happening across your entire organization as quickly as possible, make decisions faster, and deliver on projects with ease.

With an effective employee management tool, employees get continuous training and self-development, enhancing their career growth.

Also read: 10 Best Employee Feedback Tools To Track Performance

• Set Clear Expectations & Goals

From the very beginning, set clear expectations and goals for your employees.

A group of remote employees can be almost impossible to keep on task and may often get sidetracked when the day has too many things for them to finish. Setting goals for everyone can solve this problem. 

Make sure that everyone knows their role and pay close attention to each team member. Without everyone knowing what they are doing, how will anyone know when something doesn’t get done? 

Specific tasks and responsibilities must be clearly defined; everyone would quickly know who they can hold accountable during busy seasons or when a lot is on their plates.

Employees will better understand what is expected of them, whether getting specific tasks resources or utilizing collaboration tools to stay up-to-date with everyone else working on your project. 

Setting goals creates structure and keeps them on track while directing their focus so they won’t have any distractions; do this, and increase productivity.

• Maintaining Transparency

While working from the office or onsite, employees meet and interact with each other daily. They have a clear idea of what their peers are up to and are free from any types of barriers. The workplace is more transparent and balanced.

On the other hand, it is a different scenario in a remote workplace. As a manager, make sure that you maintain the same level of transparency as it would have been in a regular workplace. This improves productivity, reduces cut throat competition, and removes any jealousy between your employees.

• Social Support

Providing social support can engage employees within a good work environment and eliminate the negative effect of loneliness. Use practical tools to help the team stay in touch. Instead of communicating solely through impersonal phone calls, video conferencing allows people to see each other.

An employee engagement session can be a great idea wherein employees can spend some free time where everyone can get to know each other. It helps build company culture and improve team bonding experience.

On a monthly or bi-monthly basis, small teams must meet together to get to know each other on a deeper level, and this will help build trust and bonding within the group.

Sometimes, it’s nice to organize outings or events as bonding experiences – things like walking tours of exciting parts of your city or attending virtual escape rooms together! We’ve found these to be a fun way for small-time teams to bond while doing something they won’t usually do as individuals.

Also read: What is pay transparency? Pros and cons

Remote work policies

Challenges Faced currently 

The last two and half years have made drastic changes in work environments, and work from home or remote working has been on the rise. And now most of the companies allow their employees to work remotely permanently.

A recent study showed over one-third of full-time employees would be shifted to remote work in ten years. Though remote work is on the increasing side, the study of Upwork reveals 63% of companies have not yet set policies and procedures.

As remote jobs are a relatively new concept, the companies need time to adopt them. Some of them have not drafted the remote work best practices policies formally. They are not enough to get real-time deliverables from their employees. 

Unspoken rules create confusion, and sometimes employees don’t clearly understand their roles and responsibilities. Without a clear-cut framework of remote work, it leads to unclear communication between the employees and their supervisor, which is unsuitable for both the company and the employee.

Also read: The Top 10 Management Styles For Leaders

Need for a Good Remote Work Policy

An excellent remote working policy doesn’t dictate its people how many hours or what days they are to work, but instead allows them to be autonomous and make their own decisions. 

An autonomous working style is a good compromise between the company’s wants and needs and what employees want for themselves because it can drive high levels of productivity and success.

Conclusion

Like every process has some pros & cons, remote work also has its. And it is the fact that remaining productive always is a bit tough while working remotely. But remote work gives employees more space, freedom, and more autonomy. They can change and adapt to remain more productive and take action in more creative ways.

Companies must provide flexible work options to attract top talent as remote-work preferences create a new work paradigm. Deliberate effort is required to optimize the performance of remote workers.

Want to know how Engagedly can help you mange your remote employees better? Request us for a demo.

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Pay transparency in an organization refers to the freedom or openness with which people can discuss how much they are getting paid for their role. It includes transparency of benefits and perks as well. It is about wage rights and has become a major trend to follow. In light of all this fuss, consider the potential impacts and benefits of pay transparency before implementing it in your business.

The practice of the trend has become popular for the third-party websites that allow employees to share their salaries anonymously. The practice of pay transparency can be full or partial. In the partial one, it is mainly when the pay range would be known for any particular role in the organization. In the recruiting process, the pay bands are often mentioned, and it is a type of partial transparency in pay scale. 

Also read: Continuous Feedback: What is it and its benefits

Whereas, in case of full transparency, the pay scale is revealed in detail for employees of different categories. Availability of data of pay scale may vary between in-house in small organizations and a broader range in large enterprises. With help of this practice, the employees get a chance to negotiate or communicate about compensation.

Transparency facilitates fair pay 

Employees are largely in favor of fair pay, transparency of pay scale facilitates open discussion with coworkers and authorities about remuneration. It is also a realistic solution for eliminating the gender pay gap. Who doesn’t want equal treatment in the workplace? Finding what others earn can be a solution. Therefore, transparency is a realistic solution that encourages fair pay. Once employees are aware of company policies regarding pay scale, they come to know that they are fairly paid.   

Also read: Here’s Why Employee Rewards and Recognition Fails

Pros of pay transparency 

There are a number of advantages of salary transparency. By disclosing the details to the staff, it helps retain their trust and facilitates improvement.

• Important to employees 

Pay transparency is essential for skilled professionals and most employers claim that they are transparent with pay scale and about annual increment. However, if the scale is a secret, it is only beneficial for the negotiators. But if they maintain pay transparency, it is like justifying the details of pay scale to all employees. So, even when the organization has a tight budget, transparency helps them show the overall trend across the organization.    

• Improves engagement and trust 

Transparency helps employees understand the pattern of pay scale better and helps them put more trust in the organization. When an organization shows honest and open pay scale details, it becomes easy for employees to understand that pay scale aligns with experience and skills in the field. In other ways, it helps boost morale and engagement of an employee as they are satisfied with a fair pay scale. 

• Minimize chances of bias

It can be conscious or unconscious, but pay transparency helps reduce biases. Biases can be gender, background, ethnicity, demographic and characters-based. The organization should disclose employee salary differences when employee pay scales are no longer a secret. If pay philosophy remains unsolved, bias can create unwanted pay differences. However, one can set responsibilities and roles correctly and use market data to set an updated salary range. It helps eliminate bias and create a less complicated pay structure.    

Today’s job seekers want pay transparency in an organization with immediacy. Companies should be clear on how pay depends on job titles, responsibilities and level of performance. It is important for companies to reflect on these factors in order to uncover bias in the workplace. 

• Attracts Candidates

With increasing competition in the market, employers need to stand out to attract freshers and also to retain seasoned employees. It should inculcate the trend of pay transparency to retain candidates who value an open and transparent salary approach. When they receive fair pay, it improves retention level in the company.

Further, transparency helps organizations to share the correct salary message to the market. It is useful for the aspirants searching for new jobs. Conveying the right pay scale on the portals lets the jobseekers understand the category of the job and how much they should expect. 

Also read: What are hiring managers looking for?

• Closes Pay Gaps

Want to eliminate the pay gap? Transparency in pay scale can certainly help. By maintaining such transparency, there is little room for bias impacting on salary figures and it will promote equal pay. Though pay gaps have been reduced in many places, it is still widely prevalent. By sharing details of pay scale, it allows for examining the reasons behind the gap and helps to eliminate it. 

• Higher productivity

Transparency around pay scales can have a positive impact on employees’ level of productivity in organizations. Studies show that employees tend to give their best efforts, resulting in higher productivity when everyone knows the pay structure.

When employees are in the dark about what colleagues earn, they may overestimate about other’s pay scales. This can result in high levels of dissatisfaction and lower levels of productivity.  

• Fewer negotiations

Without transparency, an employee is not aware whether he or she receives less pay and, therefore, they could not negotiate. When employees get to know about details of pay scale, they would not negotiate with authorities. It will encourage less scope of negotiations with pay transparency in an organization.

The transparency works the best in the recruiting and interviewing stage as it helps cut out unnecessary negotiations. It may trigger unwanted situations both for employers and employees. So, being transparent about the pay scale will eliminate time-consuming negotiations.   

Looking from a worker’s perspective, without having accurate details on peer compensation, it is common to feel that they are underpaid, which leads to unpleasant workplace environments.

Also read: 6 Most Common Leadership Challenges At Workplace

Cons of transparency 

The transparency of pay scale has downsides too and it should be carefully taken care of. One has to make sure that transparency does not impact office culture too deeply.

• Builds up internal resentment 

Before introducing transparency in pay scale, it is important to review the pay to ensure equal distribution among employees. Sudden revelation of previous pay details often lead to tension and resentment among employees. This salary experience contributes to lower engagement and morale.

• Improper vision can impact morale 

Employees need to understand the responsibilities and success levels that determine the pay scale. Otherwise, one may tend to lose motivation and have a wrong notion that their performance isn’t as good as that of their colleagues. It necessitates a clear rationale on salaries and try to provide it for your employees. It is the responsibility of the manager to take employees through every pay scale. Discuss in detail to help them understand the company policies.

• Increased Turnover

When employees are not satisfied with their compensation, it results in turnover. It impacts an employee’s motivation and productivity levels. This is when employees start to explore the market for better options.  

Also read: 7 Useful Tips To Reduce Employee Turnover

• Creates Envious Employees

Sometimes not revealing the pay scale is a bliss. When employees get to know about each other’s pay scale details, it can make them envious or feel devalued. This is more obvious when peers having the same profile earn more. It creates a huge impact on work productivity, resulting in employees deciding to leave the job.

• Required to include government regulations 

The transparency can invite unwanted regulations and lawsuits for the organization. However, employees can produce the salary details in court, which will bring in unwanted trouble for the company. This is where the government regulations work in favor of the employee who has raised the problem of unequal wage distribution among peers.

• Difficult to implement

The idea of transparency doesn’t standalone, but comes with a need to evaluate an equal wage system. It mainly depends on the category of organization and how it can pay employees for different pay scales. It becomes a challenge when you have to hire employees on equal pay as you have to measure length of employment, create scopes for training, and employee experience. As these are unique to every job role and individuals appointed for it, applying a standard pay rate can be challenging.    

• Comparing pay

Knowing how much your colleague makes from the company can trigger problems of jealousy. Because of which it is still not a common trend for most private organizations. Comparing pay can impact negatively on employees, resulting in demotivation, especially for peers who are working in the same profile. The company may face problems in hiring or retaining employees due to transparency.   

How to implement pay analysis to eliminate discrepancies?

When an organization commits for pay transparency, discrepancies are sure to crop up, which is true for any fast-growing company. Having pay analysis for every role helps get effective results. It should consider who contributes significantly to company growth.

Consequently, it is important to analyze the big difference in payroll. It may happen that a person’s responsibilities do not line up with the particular job role, or changes to a new role that impacts the pay. Without an objective reason for the change in pay, the HR team should initiate to rectify and maintain equality.

By offering equal scope for every employee, it is a good opportunity for them to earn a bonus, instead of offering someone above the market rate. It is important to focus on performance linked pay philosophy for every salary scale.

Also read: 7 Reason Why Goal setting Is Important

With open salaries, comparisons are inevitable, and so, companies should have objective reasons behind it. Therefore, analysis should include factors like level of experience, market rate of a person’s designation, and cost of living in a location to determine the final pay scale. All these are to be integrated with the company’s framework. These should be easy for employees to understand.  

Transparency without salary policy can be hard to maintain

The idea of introducing transparency in pay scale is yet a revolutionary step that is being looked at somewhat skeptically. Instead of being in a dilemma on whether to go for full or partial transparency with a pay scale, it is better to disclose it to every employee that gives few scopes of negotiations. 

Transparency without clear policy is troublesome, as salary is an emotional and impactful topic to discuss. It can lead to chaos when focused without proper policies to run for in an organization. Employees often fail to understand the importance of a job role and its requirements, experience, and qualification. These have an impact on the pay scale of an individual. So, it should be the responsibility of management to be clear about salary structure and logical reasons behind the final decision and help employees understand it right. 

If you are focusing on employee engagement, you can have it smoothly when team members know how salary is determined than knowing who is earning more. A fair process is trustworthy and drives engagement without making one demotivated. By deploying this pay transparency policy, it is easy to promote diversity. Therefore, businesses can eliminate discrimination with transparency policy that further promotes equal opportunity for employees in an organization. 

Learn how Engagedly can help you manage your employees better by requesting us for a demo.

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Organizational structure is crucial for the smooth running of any business. The best organizational structure provides clarity and engagement for its workers while also maximizing profits for the corporation. The need to meet the demands of others has pushed humans to develop more efficient and effective ways of manufacturing products. This desire led us from small family-run businesses to the industrial age, then the bureaucratic structure. 

Today, companies are favoring a more employee-centered organizational structure. Promoting this structure doesn’t mean organizations don’t use other designs. It only means the business’s values, goals, and culture contribute to the organizational structure that suits it best. 

This article will highlight the different organizational structures, why identifying the right one is essential, and the elements of it. We would also discuss the best one in this era.

What is an Organisational Structure?

Minterberg defined organizational structure as the “framework of the relations on jobs, systems, operating processes, people, and groups making efforts to achieve the goals.” An organizational structure defines the reporting structure of a company. We must have all experienced this kind of structure when working in any organization. For example, when one is asked to report to a specific manager or if you are a manager and asked to supervise a team and have them report back to you. It’s also the case when starting a new job; the company gives you a job description and a list of activities your role covers. These activities highlight the presence of an organizational structure within a company.

What are the Elements of an Organisational Structure?

Every organizational structure possesses elements that make them work. When setting up your organizational structure, you look at these elements. Taking these elements into consideration helps establish a network that supports the company values, culture, and goals. There are six elements, and they are:

Formalization

Formalization is how flexible a job description is. For example, a factory employee on an assembly line. The person has little to no room for creativity, reinventing, or improving it, making it a monotonous job. Many companies today are more flexible and give some room for creativity. Although, some organizations need the repetitive approach – think Amazon packaging warehouses.

Chain of Command

The chain of command defines and clarifies the line of authority and whom each employee ought to report to within the organization. The two ideas behind this element are that the superior should be obeyed, and the employee should only report to one manager to avoid confusion. Today, this element isn’t as rigid as in the past. Later in the article, we will look at some organizational structures with a loser chain of command compared to others. 

Work Specialization

Work specialization is the idea of being good at a particular activity. Henry Ford was one of the early adopters of specialization in the 1920s, and this idea served him well on the assembling line. Having a worker concentrate on the front tires, another the back, and another on the brake pedals improved productivity because each man specialized in their skill. Today, specialization introduced division of labor, which created the idea of having specific job titles and functions within a functional unit. 

An example is a sales department. It can have separate people working on cold emailing and receiving orders from customers. To avoid boredom, disengagement, and absenteeism of employees, they can be rotated or given more responsibility to keep engagement high.

Departmentalization

Departmentalization is bringing specialized jobs or activities together to coordinate a common task. We can group them in the following ways:

• Function: Grouping by function is the most popular method in big cooperations today. Examples of these functions are having a finance function, a supply chain function, or a human resource function.
• Geography: Some companies can group their activities based on geographical location. This method is popular with companies with branches and customers scattered across a country or the world.
• Product: It isn’t unheard of to find companies grouped according to their products. This method is popular in the manufacturing sector – where a single raw material can produce various end products. An example is a tree. It can make different end products like paper, clothing, tissue, hard hats, etc. A company can produce all or some of these items, deciding to create its department based on the different products.
• Process: Companies can choose to use similar processes to group a department. An example is a petroleum company. They ordinarily carry out the following activities; exploration, extraction, refining, and transportation. They can form a department based on each process.
• Customer: A business can group itself into departments based on the services rendered to its customers. An example is offering different packages to organizations, households, and individuals.

A large organization can use some or all of this departmentalization in its structure. 

Centralization and Decentralization

Centralization means the decision-making process lies at a single point, typically with a few people in top management. A decentralized system means that the decision-making process is at different points. It allows the distribution of authority throughout the organization, unlike a centralized system where all the decision-making power lies with a few. In modern times, companies favor a decentralized system because of fast decision-making and engagement of workers at different levels.

Span of Control

The span of control commonly speaks about the number of employees a manager has control over. The rule of thumb is to have a manager take control of more people. This is because it supports less hierarchical layers for workers to report to and receive information. Fewer layers also mean fewer managers and less money to pay them. 

Today, this element has gone through some changes. One of them is companies prefer to work in smaller, more effective teams. They are also more fluid in receiving and giving information.

Also read: 7 Reasons Why Goal Setting Is Important

Why is Having the Right Organisational Structure Important?

We cannot stress on the importance of an ideal organizational structure enough. The idea of not knowing who to report to, what your job entails, or what project you are working on, can lead to confusion and inefficiency. This section highlights some of the importance of having an efficient organizational structure.

Facilitates meeting objectives through proper coordination 

An efficient organizational structure allows the company to plan clearly and coordinate when executing them. Each department and individual has set goals, and having an ideal structure allows the organization to hold the departments responsible for achieving those goals. An efficient organizational system supports the company in coordinating and monitoring the progress of each individual and department.

Removes Overlapping and Duplicate Jobs

One thing a company doesn’t want is to waste resources replicating the same jobs. If a company doesn’t have a structure to help define the roles and duties of employees, there will be cases of their work overlapping or, worse, duplicating their jobs. A proper system ensures this doesn’t become a norm in the company.

Provides a Clear Communication Channel

Communication is an integral part of any organization. Without proper communication channels, a company will be ineffective in its operations. A good structure clearly defines the communication flow, so the employees know who they report to.

It Improves Productivity

Having the ideal structure ensures employees know their roles are and are engaged in those duties. Having a clear and defined description of jobs can help improve their productivity.

Identifying the Right Organisational Structure for Your Business in This Era

Before identifying which organizational structure is suitable for your company, let’s first look at the various organizational structures.

Hierarchical 

The hierarchical structure is the oldest and most familiar structure used by companies. It is a centralized structure with all the decision-making power in the hands of the board and senior management. Workers are to report to the senior management and cannot make business decisions. If we use the elements to describe this structure, we would say they are;

• Centralized
• Very formalized
• Rigid and define a chain of command
• Little specialization
• Narrow span of control

Most organizations in the 1900s until the early 1940s used this structure. Even today, some industries that require a lot of regulation and strict rules still use this model.

Functional

The functional structure is like the hierarchical structure but with more division of labor involved. The hierarchical structure has a top-to-bottom chain of command, with everyone reporting to top management. It was an early answer to employees crying out about the hierarchical structure in America in the 1950s and 1960s.

Functional, on the other hand, allows for departments and departmental managers. This structure means different employees report to specific managers. An example is an accounting department focusing on accounting-related activities. This system came to be to make hierarchical management more efficient.

Flat 

A flat structure is the opposite of the hierarchical, and entails little or no middle management. This type of structure is popular with startups, where there are a handful of staff and a single person in the top management position. This structure allows creativity, proactiveness, and some degree of decision-making power. As the company grows, there should be a clear reporting structure to avoid confusion in the long run.

Divisional

Divisional structure is when a company or organization breaks down the company according to a product, market, or service rendered to customers. Under the type of departmentalization under elements, the divisional structure allows a large company to allocate its resources based on other divisions to improve productivity. It is a decentralized system that gives decision-making power to branch managers. Only highly strategic decisions go through the headquarters.

A real-life example of this is Coca-Cola. It has divisions for its products based on various regions. The leaders there have a certain level of autonomy based on the demand of their customers and government.

Matrix

The matrix structure sees employees report to two managers. A typical example is if an employee reports to a functional manager and a product manager. Another example is if a software engineer from the engineering department is also on a team working on a new product for the company. The software engineer reports to both their line and product manager.

This is an ideal structure for organizations that often take on projects.

Philips, the Dutch multinational company, set up a matrix structure in the 1970s.

Network

Companies that outsource several functions easily fall into this category. They usually have a core team and then lots of subcontractors and contractors. It’s a decentralized system that’s flexible and allows the company to concentrate on its primary core processes. It can also be a cheaper option since the subcontractor specializes in that activity.

Examples of companies are Nike and H&M (Hennes & Mauritz) that outsource their manufacturing procedures to subcontractors. 

Team

A team-based structure entails bringing a group of employees together to accomplish organizational goals (long term) or work on a project (short term). A team-based structure is fluid, less defined like hierarchical structures, and decentralized. We should note that team-based structures have a management team that assigns their targets and goals but allows them to choose how they will meet that goal. A good example here would be Google.

It is good to note that large companies can adopt more than one organizational structure for a different aspect of their business. For example, Nike also has a geographical divisional structure for its products. 

Also read: 6 Trends That Will Shape Hr Strategies In 2022

Now that we have described the organizational structures available, we go back to the question; What is the best organizational structure in this era? 

We have already mentioned the internal factors that affect strategic decisions. They include the values, culture, and goals of the company. But that’s not all that affects an organization’s structure – external factors affect as much as its internal factors and sometimes more. 

Since no company is an island and operates in an industry, the trending factors will also shape and change the organizational structure. A study by Deloitte in 2016 found that 92% of participants believe redesigning their current structure was important or very important. The same research noticed that organizations are moving to be more decentralized and are more product and customer-centered. So what external factors have brought about this change?

The first is technology. Technology has allowed information to travel faster, creating a fast-paced environment. This tech has made the functional and hierarchical structures obsolete when passing instructions. Engagement software has improved the flow and speed of communication, allowing us to do so in real-time.

More companies combine functional structures with team-based designs like Apple and Cleveland Clinic. This ensures that there is still a form of the hierarchic system but has quick responsive teams. 

The second is the empowerment of the labor force and the benefits of engaging this force. In recent times, industries leaders and management have witnessed the gains of having an engaged workforce. Millennials and Generation Z want to be more involved in their workplace. Because of this, companies have had to rethink their strategies.

The best organizational structure for this era seems to be decentralized, employee or customer-empowered, and flexible to adapt to changes. Most companies are happy to have top management set the goals and targets and leave it to the team assigned the job to be creative with how they are to achieve the goals. 

Uber, the famous car transport service, usually appoints a general manager, city manager, and driver operations manager when it arrives in a city. They give the team the freedom to adopt a strategy unique to that city, which will involve developing a practical organizational structure in the city.

Conclusion

In conclusion, the fast pace of the market, changing views on employees, and the need to surpass competition have made the modern-day organizational designs decentralized, compact, engaging, and information hubs. Although some large firms have still kept their functional organizational structure, it’s only a matter of time before most companies adopt traits to stay relevant in the market.

Want to know how Engagedly can help you manage your employees better? Request a live demo from our experts!

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“Tim, my manager is always looking over my shoulder. I don’t really like it when he times my breaks and stands behind me watching what I do.”, said Martin to his HR manager.

Continue reading “An HR’s Guide to Dealing with Employee Complaints”

The leadership skills of management are crucial to organizational success. Part of the duties of a good management system is identifying the best management style that works for your team or organization. Employees need their potential drawn out by competent managers with quality leadership levels. And so in this article, we will dissect the various management styles, their importance to organizations, and which one is best suited for you.

What is a Management Style?

Management Style is how managers work to fulfill the business objectives. It is how they plan, organize, make decisions, and delegate duties to their staff.

The Importance of Adopting the Right Management Style

In a study by Gallup, they found out that companies surveyed said they choose the wrong managers 82% of the time. That is shocking, considering how essential line managers are to organizations. 

There are many reasons for this result, but one obvious one is that many managers pay little attention to their management styles. Adopting the wrong management style can make an experienced team ineffective. 

Aside from managers figuring out the best management style that suits them, there is also teaching these leadership qualities to the next generation. A study by Deloitte found out that 63% of millennials leave their job within three years if they do not see growth in their leadership skills. 

Also read: Leadership In Times Of Crisis: How To Lead Efficiently

This study highlights how important learning and identifying the ideal management style is necessary if you want to keep your best employees.

Lastly, proper leadership promotes engagement. Improved engagement leads to better productivity and a healthy culture. A study by Harvard Business Review confirms 78% of business leaders concentrate on improving engagement levels. By adopting the best management styles for their organizations, they come closer to achieving that goal. 

Types of Management Styles

We have been talking about the ideal type of leadership in the article. A question that should be at the back of our mind is: what is the ideal management style? The answer to the question isn’t straightforward because there isn’t a one-fits-all management style. Different situations will call for distinct management styles. In this section, we will explore the 10 best management styles.

Autocratic

Autocratic leadership is a top-down management style, often dubbed the traditional management style. This management style demands employees to follow strict instructions. It is a style in which all the decision-making power lies with the top management. So what are some features of the autocratic management style?

• There is a strict reporting structure all employees must follow.
• Decisions are quick since only one person or a small group makes them.
• Management strictly supervises the work of employees.
• Rules and instructions are absolute in most cases.
• Communication is clear and concise – often giving detailed direction.

Pros

The biggest advantage of the autocratic leadership style is directives given to employees. Clear goals also promote productivity through effective delegation of duty. It can also prompt quick decision-making for the organization.

Cons

The big disadvantage of this management style is that all decisions rest in the hands of one person or a very few people, adding to their stress. Another disadvantage is that it kills creativity, participation, and growth in an organization.

Example 

A good example of where this style prevails is the military. Another example is manufacturing companies that own factories with strict processes to follow. This style in the right environment will improve employee performance and is prevalent in Asian and African countries. 

Also read: 6 Leadership Mistakes That Will Cost You Dearly

Servant

Servant leadership is a style that focuses on serving the employees and customers. It favors a people-first mindset. It also believes fulfilling personal and professional needs leads to productivity. 

Features of a servant leadership

• Active in building employee morale.
• The leaders are good with interpersonal skills and communication.
• It improves productivity by earning the loyalty and trust of employees.
• Encourages engagement and collaboration between employees.
• It puts team chemistry and a positive atmosphere at the forefront.

Pros

This management style increases engagement among employees – Some even take the company as their second family. It also encourages growth and creativity. 

Cons

One of its disadvantages is it drains the leadership. Overseeing the well-being of others can be exhaustive and demanding. It is not the best strategy if your team is result-based. An example is if your company manufactures physical products, this approach may be too costly.

Example

An example of people who had such leadership qualities includes Nelson Mandela and Mahatma Gandhi. Both examples are examples of leaders who were people-minded in order to achieve their goals.

Coaching

The coaching style is like the servant management style. It is a style that focuses on the growth of the employees. The standout quality of this method is it quickly identifies the strengths, weaknesses, and motivations of its employees.

Some features of coaching management style include:

• The coaching management style is supportive by nature.
• It promotes learning as a way of growing.
• Open to asking questions and regular feedback.
• The nature of this style is guidance and not giving commands.

Pros

The coaching management style promotes the learning of new skills. It also teaches employees to be open-minded, which helps their confidence. It improves the company culture as learning is at its center.

Cons

The major drawback is that it is a time-consuming activity, as it takes time to identify areas of improvement. Another shortcoming is that it may not favor short-term goals.

Example

In the business world, Sheryl Sandberg, COO of Facebook, puts a lot of expectations on her team but is also willing to support, help and guide when necessary. Another example is Satya Nadella. After taking over a successful but stagnating Microsoft, he introduced a structure that has helped the company evolve.

Also read: 10 Best Employee Feedback Tools To Track Performance 

Visionary

The visionary leadership style sees a person or group of people communicate the big picture or dream to their employees. They usually are not involved in the daily management of the business but guide the organization towards fulfilling the vision. These leaders are vital when growing as a small company because of the dynamics. 

Now let’s look at some features of these leaders:

• These leaders are charismatic and know how to inspire those around them.
• They are risks takers and very optimistic people.
• They earn the trust and respect of their employees.
• Their focus is on motivating and aligning their team or organization to move in the right direction.
• The success of the leadership style depends on the competence and experience of the employees.

Pros

An advantage of having this leadership style is it spores growth in companies. The charismatic pull can also bring the team together and help push the company to reach innovative heights.

Cons

The drawback that stands out here is this management style can be detrimental to new and inexperienced employees. The lack of attention to detail may also mean top management misses out on short-term opportunities. 

Example

Elon Musk of Space X and Tesla is a famous example of a visionary leader. His innovation in the automobile industry and space exploration has seen new doors open in those fields. He also employs competent people to oversee the day-to-day activities of the business.

Democratic

Democratic management is a style of leadership that promotes the participation of employees in making organizational decisions. It allows employees to share their thoughts, ideas, and feedback with management. Although the final decision is still in the hands of the leader or top management, it still encourages engagement among employees. 

Some features of democratic leadership include:

• An emphasis on group participation.
• Encourages anyone to share their ideas or thoughts.
• It needs a leader good at mediation.
• Open and transparent communication system.

Pros

Under this management style, employees feel empowered and valued in the organization. It helps to boost employee retention and morale. Since the employees are part of the decision process, it also requires little to no supervision by management.

Cons

It can be time-consuming. Planning large-scale discussions and collecting everyone’s feedback is a slow process. It’s possible to choose some employee ideas over others which can destabilize the team or organization.

Example

Ray Dalio of Bridgewater Associates, the largest hedge fund, supports this leadership style. In a TED Talk he gave in 2015, he spoke about the idea of meritocracy, where people can say their minds. It uses the thinking capacity of a company rather than only top management.

Also read: 7 Reasons Why Goal Setting Is Important

Pacesetter

Pacesetter management style is when top management or a leader sets high standards. The pacesetter management style focuses primarily on performance. So it’s a style that holds its employees to high standards.

Features of Pacesetter Management style

• There is an emphasis on meeting goals within the expected time.
• They set the standards to stretch employees to get the best.
• The management style emphasizes personal achievements and accomplishments.
• The style is demanding and usually deployed in fast-paced working environments.

Pros

This style pushes employees to achieve their goals. It can also help teams that are competent but ineffective. 

Cons

It can lead to employee burnout. It can also have a demoralizing effect on employees if they don’t meet their targets. 

Example

Organizations that deal with fast-paced environments like investment banks, advertising companies, and media houses will often employ this ideal management style. 

Transactional

The transactional management style involves rewarding employees with monetary incentives for achieving their goals. It is a way of encouraging or motivating employees to meet goals in the set period. Usually, these goals are to hit goals related to productivity, like sales and revenue. 

Features of this management style

• Places value on employees meeting their targets.
• This method encourages extrinsic monetary rewards than intrinsic rewards.
• It favors micromanagement.
• A rigid approach that doesn’t give room for personal interpretation. 
• The management style communicates the goals in a concise and clear version.
• Favors high-pressure environment.

Pros

It can be effective when meeting short-term goals as it spurs employees to achieve their goals.

Cons

Transactional leadership style isn’t a sustainable method of leadership. In the long term, employees burn themselves out or tire from the style. It also doesn’t support creativity.

Example

Sports teams use this method. Since athletes train to win competitions, adding an extrinsic reward can spur them to win those rewards. 

Laissez-faire

Laissez-faire is a French word that translates to “Let it be” in English. And as the name says, it’s a hands-off approach. Managers give the task, present all relevant information, answer questions, and clear any misunderstandings. After this, they only return to review the work done. 

Features of Laissez-faire Style

• It supports the delegation of work.
• It allows for creativity and freedom among the employees.
• This method offers little oversight to employees.
• Management provides all the information, support, and tools needed by employees to execute their jobs.
• Employees are self-directed, and top management only gets involved if something goes wrong.

Pros

The method can be beneficial if experienced team members are present. The style encourages creativity, innovation, and accountability. It can lead to high productivity for teams who enjoy autonomy and a high retention rate.

Cons

The number one problem with this style is it only suits peculiar people and organizations. It is the worst type of management style for inexperienced employees.

Example

Google is a perfect example of a company that employs this management method. Their “20 percent time,” which allows employees to work on private projects, has seen them produce AdSense, Google Maps and Gmail.

Transformational

Transformational leaders are like visionary leaders, looking at the big picture. They are charismatic, inspiring, and motivating by nature. While the visionary management style favors smaller firms that are growing, transformational favors large corporations that are going through a period of change. 

Features of this management style

• Inspires creative thinking.
• It challenges the team members.
• Inspires others to achieve their set goals.
• The leaders are usually well respected and trusted by their employees.

Pros

This type of leadership can improve the engagement and productivity of employees. It also allows for employees to bond together.

Cons

The management style relies a lot on the personality of the leaders. The management style pays attention to the big picture and can lose the details.

Example

A popular figure said to use this method is Steve Jobs. A micromanager and rewarder of those who meet their targets. This management style helped him stir apple to a dominant position in the mobile phone market.

Bureaucratic

A very similar style to autocratic leadership, One key difference is their decision-making steps. While autocratic favors one person making quick decisions, bureaucrats follow procedures and processes set by the management or law. Bureaucratic leadership style demands its employees follow the rules created by their superiors.

Features of the Bureaucratic management style

• It is a structured management style.
• Promotes a disciplined atmosphere.
• It encourages following the rules and laws.
• There is little room for creativity or collaboration.
• It helps to define the roles of employees.

Pros

The leadership style is effective in organizations or industries that are heavily regulated. Every employee has their own defined roles, which aids productivity.

Cons

This management style doesn’t support creativity, innovation, or free-thinking. This can lead to employees feeling restricted. When making decisions, it is slow because of the layers of authority figures it has to pass through.

Example

A good example is a government-run organization that requires employees to follow statutory rules.

Also read: 6 Trends That Will Shape Hr Strategies In 2022

What is the Best Management Style to Have?

The best management style depends majorly on three factors.

• The level of your skills, experience, and personality.
• What your team needs at the moment.
• The culture of the organization.

These three factors play a vital role in determining what management style managers will adopt at different times. If there are inexperienced employees, then a coaching style may be appropriate. For more experienced members, a democratic or even a laissez-faire approach might be sufficient.

Conclusion

In conclusion, all the mentioned styles are good management styles, and any one of them may be ideal given the peculiar situation. While there are some that managers prefer, managers must also learn to be flexible to bring out the best from their employees.

Want to know how Engagedly can help you manage your employees better? Request a live demo from our experts!

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Facing challenges with employee retention is no doubt one of the common things that human resource departments face. Every company should focus on keeping turnover at a minimum. As per reports on truth and trends in turnover, one out of four employees will quit their present job, looking for other better opportunities. But it is believed that strategic approach of employers can retain almost 77 percent of employees who quit. The factors on which healthy turnover depends varies widely from one industry to another. The trend of turnover, its root causes and working on it for better results in future can help to reduce employee turnover for an organization.

What does employee turnover stand for?

Employee turnover shows the total employees who leave a company over a specific time. It includes both retired employees and those who are fired from the organization. No matter what the reason for turnover may be, absence takes a toll on a company’s profit margins. However, turnover also applies to subcategories, such as within demographic groups or departments. Losing talent impacts productivity. 

Turnover majorly impacts an organization’s trajectory. This is a common problem in all organizations and they wonder how to deal with it. The turnover can be voluntary or involuntary, quarterly or annual, depending on industry or when an employee gets terminated from organization. However, it can become costly due to the following:

• Lower productivity level when looking for a replacement
• Overhead related to posting for job and hiring procedure
• Planning for training programs for new hires

Also read: 10 Best Employee Feedback Tools To Track Performance

Turnover rate can impact your relationship with industry and customers. Some have a high rate of turnover due to the category of industry and nature of work. An excessive turnover is a warning sign to maintain good company culture and retain a prominent position in the market.    

An organization has to plan for effective strategies that help boost retention and eventually can avoid high turnover. Reports show that US employees have paid $600 billion as turnover cost in 2018, that increased to $680 in 2020. Here, one should learn more about current market trends of hiring labor, the employment phase and its rate. This will help the employers come up with suitable strategies for hiring talents and retaining them for the good of the company.     

Useful tips to reduce turnover 

1. Define company culture to hire right talents

Hire the right person to begin with and let the person be aware of the company culture. This helps an employee understand whether they fit into workplace culture and what they can expect from it. The role of the candidate should be well defined to both the candidate and the person assigning it for clarification. It helps the management to make sure that they hire the right talents for the vacant job positions.

One effective strategy can be allowing peers in a particular role to hire another for the same position. This is how the person already serving the organization can analyze the skill of the new person to hire and can hire the ideal fit for a position. The existing person can evaluate the person to hire better and whether they would match with the company culture.   

2. Allocation of the right team for right job

Smooth onboarding can help. Deploying the right team for the right job can make a difference in how the task is done. The strategy and skill of the team will help achieve it right on time. When a team is hired, it should have members with mixed qualities, as arranging for day-to-day tasks and handling each can be challenging. To make it smooth, assign different tasks to everyone. This will also make an individual stable in their specific role and hone skills better for future endeavors.  

3. Encourage gratitude and generosity

Recognize the contribution of every individual in a team. It turns out to be an incredible element in boosting working relationships with employees. Try to encourage social interaction among employees and every opportunity can lead to better connection and appreciation among the team. It will surely make employees healthier and they would be happy to put in their best.  

Transparency in company policy is important for a healthy work culture. This helps to gain trust of the employees and the company can get the best out of the workforce. Introduction of performance linked incentive further encourages employees to work to their full potential and their sense of belongingness to the organization bolsters productivity.

Also read: Gratitude Is A Part Of Employee Recognition Too

4. Recognize efforts and reward employees

Rewards and recognition are meaningful, and the best and cost-effective method to prevent turnover. By this, it can boost productivity and encourage a happy environment in the workplace.

The nature of employee recognition can be personal, specific, unexpected, and frequent. Overloading a team is never the best solution. A missing work-life balance can result in higher turnover, something that is not desirable. Some simple ways of appreciation that companies can benefit from are:

•       Praising in public
•       Giving paid time off from the work
•       Feature employees and achievements on company website
•       Sending appreciation email to boost up employee
•       Offering a reward or announcing the person as an employee of the month

These are sure to encourage an employee to put in their best effort. It is something that the company will surely benefit from. The recognition has to be fruitful for employees and eventually they feel valued for the effort they give in for organization.    

5. Check with employees about achieving goals

Encouraging employee growth helps retain talent. Employees want to grow constantly, which is good for the organization and should help them achieve their goals faster. If you stifle the motivation of employees to achieve the best, it can lead to stagnant growth or chances of turnover. Try to introduce opportunities that help in constant skill development and help them make a place among the top-performers.   

Also read: 7 Reasons Why Goal Setting Is Important

6. Give importance to work-life balance

The demand for work-life balance among employees has become increasingly important. Companies need to be attentive to this balance to reduce turnover and offer a flexible workplace for employees. Businesses need to prioritize communication, introduce flexible working hours, and offer employees on-site childcare if they want to promote a work-life balance. 

Coherent teams boost better communication, lowers the stress level, resulting in greater output. This will automatically enhance the retention level of employees, and cut on the chance of turnover rate.

7. Training programs reduce chance of turnover

It is important to train employees to help them understand core values of business and give adequate assistance they require to thrive in the first weeks of joining the company. The training program will help them come to terms with tools used, context and knowledge required to solve the challenge they come across in the future.

Try to include one-to-one interaction sessions as it helps understand what the employees are looking for and what can improve their contribution to the company. Through team-building activities, help each of them identify strengths and work on their weaknesses. This is how you can identify and prevent a situation of turnover. Employees would feel valued when they find an organization investing in training programs to help individuals perform well.

Companies need success and a good profitability rate to thrive and remain constant in this ever-changing market. Employees are the success drivers for organizations. The culture is becoming employee-centric and so the organization needs to ensure that it offers an optimistic environment to retain top performers. Try to adopt strategies that retain the valued talent in the firm for best results.  

How to measure the success of an organization in lowering employee turnover?

Maintaining an optimum workforce such that productivity level is maintained at a desired level is an important aspect of running an organization. It is decided by employee turnover and attrition. 

Employee attrition is the natural reduction in the number of employees through retirement or resignation or death. As we can see, there is little that a company can do to reduce attrition. However, as a counter step, it can hire new employees to fill up the vacant positions. 

Turnover means the number of employees leaving the company voluntarily as well as involuntarily. While we have no control over the group of people who retire or are terminated by the company, we can focus on the number of people who are resigning. Scheduling exit interviews can help the company to find the reason. When the voluntary exit levels are high, a company may evaluate its working environment, culture and choose to bring about necessary changes based on feedback of leaving employees. We can say, employee turnover is a metric for job satisfaction of employees. A successful company must strive to keep its turnover rate low.

Discussing the turnover rate, it can be concluded that it is concerned about the internal culture of a workplace. It is also the frequency of employee hiring, quitting the job, and how an employee is fired. In other words, it is measuring staff turnover. Turnover is mainly on employees who are leaving on their own terms, including the one who receives termination. However, the turnover rate also helps measure an employee’s lifecycle.   

Difference between healthy and unhealthy turnover

After going through the difference, you may think that optimal turnover should be lower. However, some turnovers are considered to be healthy for an organization.

In this regard, when an employee is about to retire after serving for so long, the turnover will make space for a new talent. There can be employees who wish to change the organization before they attain the frustration and stagnation level. It is both a natural and healthy form of turnover for an organization.   

However, the rate of turnover often depends on the industry and it has to be a healthy one for the company. Transforming the workplace can reduce turnover and, in this, hospitality experiences a higher rate than others due to its nature of work(Source).   

Transforming workplace can reduce turnover

Try to make the workplace a positive environment and interesting to work in and this can effectively reduce the chance of turnover. Employees should feel like that company values them and understands their needs. For this, the workplace should focus on employees and make the best of decisions to retain crucial talent. The more employees are interested in working in the place, the higher is the retention rate, thus, lowering the turnover.   

Also read: Leadership In Times Of Crisis:How To Lead Efficiently

Conclusion

The employee turnover directly impacts on company profitability. An employee with the right skills can assist in making effective business decisions. Here’s where selecting the right employee becomes challenging.

Once a business can find the right person, getting them to give their best for the team can be time-consuming and costly. It sometimes takes longer to hire employees and so organizations are offering high pay for salaried ones and also paying for the hourly roles. These are some forms of better incentive rates that cut on the turnover rate. Create development opportunities and prioritize employee needs as it helps reduce the chance of turnover.

Want to know how Engagedly can help you manage your employees better? Request us for a demo.

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Not many organizations realize how important it is to make new employees feel welcome at the workplace, but this has a strong impact on how productive the employee is going to be in future.

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