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Introduction
Organizational structures and their building blocks are instrumental in achieving coordination and efficiency in highly diversified markets. Taking into consideration the fact that some structures and levels of authority are better suited for communication, delegation, and management than others, managers have to understand their inherent advantages and disadvantages to ensure maximum performance of their companies. The aim of this paper is to analyze the impact of organizational structures and hierarchies on employee motivation and morale.
Discussion
A hallmark of a well-structured retail company is the ability to adapt to the ever-evolving demands of the business environment. Long-term viability in the retail industry is a function of personnel management. A report issued by NRF/Mercer reveals that in 2003, turnover rates of store managers amounted to 20 percent (as cited in Mullin, 2005). It follows that for an organization to function without substantial disruptions, its design with respect to hiring and managing should facilitate productivity and minimize turnover intentions.
HR experts at Trader Joe’s are cognizant of the fact that employees should be given a reasonable leeway to unlock their creative potential (Mullin, 2005). By providing its staff with a high level of autonomy, the retail giant makes sure that the working environment of its outlets is fun, original, and productive. Instead of issuing highly-detailed instructions to its workers, Trader Joe’s teaches them the specifics of products and allows them to exercise their freedom when it comes to merchandising and featuring (Mullin, 2005). This approach lies at the basis of unleashing employees’ productivity without resorting to financial stimuli.
A similar method of boosting sales and reducing turnover rates has been adopted by InterGlobe. The company’s organizational structure is designed to improve employee motivation and morale. To engage its workers, InterGlobe offers them an empowering culture and a high level of flexibility. Most importantly, they are constantly provided with non-monetary incentives for their efforts and not just successes, which is a focal point of the company’s HR policies (Tandon, 2017).
Upon analyzing the referenced companies, it is clear that their approach to organizational design presupposes a low degree of centralization. Decentralized companies are known for a substantial demand for judgment capacities of their workers, which means that decision-making inefficiencies are eliminated at low levels of the authority hierarchy (Griffin, Phillips, & Gully, 2016). By allowing employees to exercise autonomy, it is possible to improve their morale, thereby achieving considerable efficiency and minimizing staff attrition. The latter is particularly important since turnover can be extremely costly.
In addition to autonomy variances, organizations also differ in terms of formalization. It is clear that Trader Joe’s has an organic organizational structure that precludes resistance to change, which is associated with mechanistic structures. The organic form of managing an organization is characterized by innovativeness and high rates of job satisfaction. It follows that by reducing the level of formalization, Trader Joe’s has allowed its staff to perform their duties by using their preferred communication lines and creative behaviors. There is no denying that the managerial decision is conducive towards attaining a competitive edge in the business environment characterized by a high level of rivalry.
Conclusion
The paper has analyzed the relationship between organizational structures and levels of hierarchy and employee motivation and morale. It has been argued that flexible companies with organic structures and decentralized levels of authority are associated with low turnover rates and high productivity.
References
Griffin, R. W., Phillips, J. M., & Gully, S. M. (2016). Organizational behavior: Managing people and organizations. Boston, MA: Cengage Learning.
Mullin, T. (2005). Hiring the very best. Chain Store Age, 81(10), 34.
Tandon, R. (2017). Our key focus is to reward employees’ efforts not just their success: InterGlobe Enterprises. Business World, 12(1), 1-2.
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