The Art of the Organizational Chart How to Review and Implement Change for the Future: ( Who do all of these people report to?)
Definition of the Organization chart: • organization chart - a chart showing the lines of responsibility between departments of a large organization • (Business / Industrial Relations & HR Terms) a diagram representing the management structure of a company, showing the responsibilities of each department, the relationships of the departments to each other, and the hierarchy of management • Even small businesses need to have some documented organizational structure for reporting and accountability. • Most Org charts will have multiple layers and “ Dotted line” reporting.
Reasons for an annual review of the current Org chart: From time to time, we have to ask: How did we get here. All organizations, businesses, families and even wild life have an organizational structure. Take your basic family structure, it starts with the parents when they wed. Duties are parceled out to the individual that has the strengths to accomplish the tasks in question. As children come into the mix, they receive their direction from the parent most capable of giving proper direction or advice. As the family grows and ages, some of these duties are handed down to siblings based on experience or exposure to certain tasks. With this “ delegation” of tasks comes responsibility for the outcome.
Business Org Chart: The business Org Chart has its roots in the same way. It normally starts off with a sole owner or business partners with a common idea for a business. Normally there is no documented structure until the business grows to a point that the normal day to day tasks must be delegated to others that have been hired to accomplish these tasks. Unless reviewed and properly managed, business org charts can take on a life of there own. Unneeded layers of management, undocumented job responsibilities, and lack of proper direction to subordinates and unrealistic wages and salaries are common issues. An annual business org chart review should include the following:
Job titles to watch for: Administrative assistant Coordinator Trainer Senior or Junior ….
Business Organizational chart review process: • Do you have an Org chart? • Current names and titles correct. • Do all of the job titles have an updated job description? • Current wage and salaries reviewed, local wage survey performed. • What percentage of direct reports report to any one manager? ( Should be no more than 25% of total organization) • Are there dotted line reporting responsibilities? • Are department managers trained and skilled to supervise their documented direct reports? • Vague job titles • Hourly associates reporting to multiple managers.
Were do you start in the review process?: • Have Performance reviews been documented at least once a year? • Development plans attached to all performance reviews. • Hiring and promotion panel to review all new hires and promotions with at least 3 members of management to review. • Minimum review of first year employees of at least twice in the first year, not necessarily tied to wage increases. ( Be careful what you offer any new hire). • Document a secession plan for all department managers. • Identify employees that are promotable with attached development plan.
Suggestions for making changes in your organizational chart: • Review the Org chart as a living document, it is not only your past but your future. • Keep in mind as this review is performed, does it align with your strategic plan for the future. • Identify the department in most need of improvements ( try using KPI’s), focus your efforts here. • Meet with department managers and ask for insight as to the performance of there direct reports. Convey to the managers that this effort is not to just cut headcount but to improve the departments performance. • Associates that have not performed to the company standards, document performance lapses, with time frames and details of needed improvements. • All documented performance appraisals need to be vetted by your HR department. Use HR to help maintain this process and stay on track with your follow up dates. • Meet with the affected associate on the documented date of review, do not delay this process!
Suggestions for making changes in your organizational chart continued: • If at the end of the documented date of performance improvement plan the associate has not made the necessary improvements, document an exit plan. • This exit plan should only be discussed between the affected associate, HR and the organizational manager. • It is best that the exit plan is done early in the week and late morning ( Friday at 5 sends a terrible message to your team!) • Do not page, send an email or send another associate with a message that you want to see them. Ask the affected associate face to face to meet at a prescribe time, away from earshot of other employees, to meet with you and the HR manager ( never perform a termination alone!) • Allow no more than 30 minutes to review the dismissal and exit plan. More than 30 minutes will lead to arguments and finger pointing.
Suggestions for making changes in your organizational chart continued: • If possible, ask the affected associate to return after normal business hours (escorted) to collect the rest of their personal property. • Escort the associate out of the building or back to their office to collect their belongings. • Before the end of normal business hours, meet with the affected managers and direct reports. In a manner that does not breach confidentially and with respect, inform the team that a change has been made. • Give this team your temporary plan to fill the void until a replacement is hired or promoted. Ask the team to address any outstanding issues with the HR department and yourself. • Do not go into the details as to the reason for the affected employees exit. • Start the process to fill the vacancy or realign your organization take on the exiting associates normal duties ( This is where a detailed job description comes in handy).
What should your company expect after the review: • You may find that you have not reduced your overall headcount but highlighted needs for additional positions. • You identify short comings in your HR programs in training and well written job descriptions. • You may identify over lapping job descriptions and titles that point to headcount reductions or the need to move associates to other departments to shore up other short comings. • Performance short comings may be based on the percentage of direct reports to any one manager. • Top line managers will have a better understanding of their teams talents and training needs. • Direct reports will perform better knowing that there managers have had input into their daily duties and job description.
The art of Organizational change: • One of the biggest costs to any operation is people costs and can be the hardest part of any managers job. • Reviewed properly and on a regular bases, a well balanced Organization chart can be a huge value add tool to land new opportunities and add to your bottom line profits. • Year over year business and strategic planning starts with reviewing what assets ( people and equipment) you have on hand and will need in the future to grow your business. • So.. Do you really know why all of these people work for you? • This is a question you should ask yourself every day.