The structure of an organization is fundamental to the success of any medium to large sized company. As executive coach Gill Corkindale notes, “…structure dictates the relationship of roles in an organization, and therefore, how people function. An outdated structure can result in unnecessary ambiguity and confusion and often a lack of accountability. ” So whether organizational change is mandated—like with a merger or an imposed reduction in force—or whether management simply wants to reexamine the company structure, there are several ways an org chart can help.
In the current economic climate employees expectations have been raised in terms of how they are compensated. Good workers are a flight risk if they are not being compensated appropriately. Org charts assist in the examination of both individual and group metrics related to salary and allow management to make plans accordingly. Questions such as “Are we paying a certain group of employees in Location A more than we are paying employees with a similar skill set in Location B?” can be answered. The salary of groups with similar skills sets can also be averaged and compared with industry standards in those professions. Planning and setting fair standards for salary distribution can help increase job satisfaction across the organization.
Many organizations see value in giving employees varied exposure within the organization to build bench strength and work experience. Companies will move employees into different job functions to increase the quality of their background and depth of experience. Job mobility and the opportunity to use skills is reported to be a key factor in job satisfaction according to the Society for Human Resource Management.
Org charts can be instrumental in visualizing and identifying employees who are ripe for a change by highlighting metrics such and work experience and tenure.
Forward thinking organizations can’t wait until key personnel leave, due to retirement, transfer or resignation, to have a plan to replace them. Succession planning can help identify organizational groups that could use support by providing skills training and management opportunities to potential successors.
Analyzing skill and performance metrics visually in an org chart can help find employees who may eventually be called upon to replace critical members, or identify groups where management potential needs reinforcing.