Platform organisations are ending "The Hierarchy in HR". HR's job will be to engage the (gig) workforce by creating Employee Value Proposition, creating an employer brand, designing conversations, incentive plans, and intuitive platforms.

Raj was worried. A group of 100 people was arriving for a month-long training programme. He had never handled such a big batch before. So, he consulted Anu who advised him to divide the group into ten sections and make a person from the group, responsible for each group. Then Raj would be required to only manage those 10 people since they would manage the rest.

Hierarchies have been very effective in people management since the very beginning. Hierarchies come into picture because a human can effectively manage anywhere between 7 to 25 people depending on the nature of work and interaction. Hierarchies are one of the most fundamental components of Human Resources. Hierarchies solve many important problems for organisations. They solve it using a manager.

What is a Manager?

A manager is someone who manages or takes charge of something. The origin of the word manager is from the Latin word “Manus” which means “hand”. The Italian word menagerie means “to control”. From an organisational standpoint, a manager is responsible for controlling the outcome by ensuring the availability and productivity of employees. A manager can do that by hiring, training, engaging, allocating work, guiding, reviewing work, and coaching the employees.

A manager is responsible for controlling the outcome by ensuring the availability and productivity of employees. This can be done by hiring, training, engaging, allocating work, guiding, reviewing work, and coaching the employees.

How do hierarchies help?

 Societies and countries have been using hierarchies to manage people for ages. If one were to look at the constitution of any country or study any civilisation, one will realise that each one of them is hierarchical with defined responsibilities and accountabilities for each role. Hierarchies help in: -

♦ Decision Making:

The speed of decision-making differentiates an organisation and makes it more efficient. Hierarchies provide a clear chain of command. Whenever there is confusion, people know who to approach for a decision.

♦  Communication:

Communication is critical to the success of any organisation. If an organisation launches a new feature in its product, changes a process, introduces an incentive plan, or decides to go for digital transformation, the speed with which it can communicate to its people will determine the success of the organisation in the marketplace. Well-defined hierarchies ensure that communication reaches the last level.

♦ Getting things done:

Social psychologists like Stanley Milgram and Philip Zimbardo had proven that people obey others of a higher status. Hierarchies leverage this trait of human behaviour to get work done. 4. Career Path: When hierarchy is created, the hierarchical levels are differentiated on the basis of the kind of decisions people at various levels can make. The complexity and business impact of decision-making increases with each level in the hierarchy. Privileges are attached to each level based on the business impact. This creates aspiration for people to move to the next level. It also acts as a retention tool, since people are able to see a clear career path within the organisation.

Problems with hierarchy

Hierarchy creates managers. These managers are power centres as well as information hubs. The managers also, at times, have the potential to become counterproductive and affect the efficiency of the organisation.

♦  Communication Flow:

If a manager in the chain of command withholds communication, he/she not only creates an information imbalance but also affects the capability of the organisation to get things done.

♦  Listening:

Interestingly, communication is a two-way street. Organisations are supposed to keep adjusting their strategies based on the feedback gathered at various levels of hierarchy. If a manager in the chain of command stops listening, it affects the agility of the organisation, which creates bigger problems down the road. A few decades ago, the lack of listening pushed the manufacturing sector into a whirlwind of unionisation.

♦  Incompetence:

If the manager in the chain of command is incompetent, that is, either the manager does not know how to make the decision, or decides not to make decisions promptly, the entire chain below the manager becomes inefficient. 4. Maintenance: At times, hierarchy defeats the very purpose for which it was created. With the passage of time, some decision points become redundant, but they continue to travel across levels leading to an unnecessary delay. Hierarchy needs to be reviewed regularly and the bottlenecks need to be identified and rectified.

Solutions

For years, organisational scientists have been trying to solve problems to make hierarchy structure work using the following methods:

♦  Creating parallel communication channels:

Organisations create matrix structures so that if one chain of command fails to communicate then the employee receives instructions through another chain of command. This is further supported by creating parallel communication channels. An example for this are the central communication teams. Listening can also be done through dipstick surveys or suggestion schemes.

 ♦  Managerial Development:

The entire framework of assessment centres and development centres is built around the concept of improving the quality of managerial roles. Many organisations invest in formal development programmes for decisionmaking roles. Some organisations conduct transition training at the time of elevation of people to the decision-making roles.

 ♦  Culture Building:

In a joint family, the younger ones are taught to respect elders. In the same manner, organisations teach people to respect authority. This is the process of culture building. Certain rituals are put in place to shape the behaviour of individuals to make the organisation efficient.

♦  Re-engineering Exercise:

Whenever a big festival comes around, we clean our houses. Re-engineering exercises do something like that for businesses. They weed out the unnecessary workflows, processes, and bottlenecks. These exercises are called by different names such as business process re-engineering, organisation restructuring, Certification on a new standard, revamping IT systems etc.

♦  Information Technology:

Embedding organisational rules in IT systems is another approach followed by organisations that reduce decisionmaking dependence on managers. Paradigm Shift Until recently, companies were focused on robotics and allied technologies to reduce the dependency on front line jobs. In the last two decades, there was significant growth in the service sector. At the same time, machine learning, artificial intelligence, data science and analytics improved leaps and bounds.

The paradigm shifted when organisations changed their focus from optimising front line jobs to optimising routine decision-making managerial jobs. Focusing on optimising managerial jobs not only creates a cost advantage but also allows organisations to convert their regular front line workforce into a ‘gig’ workforce.

If you see the way the Uber platform works, there is no manager. Anyone can enrol to be a driver (employee) on the basis of his driving licence (training). Thereafter, the employee attends an induction, the platform allocates work, the customer reviews the work, and the feedback and development needs are passed to the employee by the platform.

The Hierarchy in HR

Platform organisations are putting an end to “The Hierarchy in HR”. The job of Human Resource will be to engage the (gig) workforce by creating employee value proposition, creating employer brand, designing conversations, designing incentive plans, and more importantly, designing intuitive platforms.