Employee Relations and Organisational Structure

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“Horizontal differentiation” and “vertical differentiation” in terms of the structure of an organisation

In reference to the structure of a business organisation, differentiation is represented by a number of processes that happen within the organisations. Differentiation processes are directed at the employees’ assignment and the decisions about their purposes and objectives.

Ever since the process of industrialisation started to affect the structure of businesses, they started to actively obtain vertical organisational differentiation. This means that the control over the employees was spread from the top down. The managers and directors were the top sectors, while the executives and employees represented the bottom layer. The chain of command within an organisation practising vertical differentiation can be rather long. At the same time, it is proved by evidence that a hierarchy that includes more than eight vertical layers makes an organisation less productive. This occurs because too long chain of command disrupts the control and makes it weaker. Such organisations are likely to have a high level of professional and ideological confusion. One of the strongest advantages of organisations with vertical differentiation structure is better to control when less than eight vertical layers are employed, and a clear organisation with strictly divided duties. Besides, the distinct hierarchy in the organisation makes the system of promotions easier.

Business organisations with horizontal differentiation are normally significantly smaller than vertically structured ones. Horizontal differentiation involves much fewer levels of hierarchy. This kind of structure differentiation appears when managers and employees are focused on working on different tasks and are controlled by different sources. The horizontal organisational structure starts to become more and more popular among contemporary businesses. Such organisations benefit from a better quality of communication between the layers of the organisation. Besides, the horizontal organisational structure allows the businesses to reduce bureaucracy significantly, and this way, their working process becomes faster and more productive (Rappa par. 4). At the same time, it is very problematic to use horizontal differentiation structure for the bigger companies, because this would increase the number of fields the upper levels need to control. Clearly, the abilities of such structure are limited. Broader control span also creates confusion as one employee may end up answering to more than one manager (Rappa par. 5).

Environmental contexts and different employment relation processes and outcomes

Environmental contexts in relation to the employment processes involve very careful evaluation of the future employees and their suitability for the jobs and environments. This way, a very close relationship occurs between the job descriptions and conditions and the people sought for these vacancies. Environmental contexts include a variety of dimensions. For example, depending on the kind of job, its environment factors vary a lot.

Some jobs include collaborative projects, some are rather stressful, some are very precise, some need an enduring and stable person, and some require a creative and passionate worker. This way, the environmental context makes the process of employment very specific and person orientated. Under the environmental contexts, the candidates for various vacancies are evaluated not only according to their professional skills and experiences but also according to their personal, physical, psychological and emotional suitability for the environment for their future job.

Since the environmental approach is based on a number of criteria, it is likely to lead to very different employment relation processes and outcomes. Employment processes may be focused on the suitability of a candidate for the group of other employees, for just one individual, for the whole organisation, or for the character of job they would be required to do. Such approach complicates the employment relations a lot and makes it rather lengthy, and the job interviews – very demanding, yet it also allows the organisations to find the professionals that match all of the parameters excellently.

Besides, lack of environmental approach results in poor employee choices, low job satisfaction and productivity, high level of work-related stress among the employees due to their incompatibility with the workplace environments. In order to maintain a clear employment practice, the managers need to determine the areas of compatibility they have to focus on and then filter the candidates accordingly. This way, the descriptions of the same jobs in different organisations may include very different sets of required skills and qualities. Besides, the organisations end up creating a variety of policies and rules for the employees of different specialities.

Blurred and Fragmented employment relationships due to the inter-firm networks and flexible labour practices

It is a well-known fact that the contemporary world of business is characterised by rapid development and high speeds. Technological progress and globalisation affect the structures of business organisations and their practices. The claim that employment relationships are increasingly blurred and fragmented because of the growth of inter-firm networks and flexible labour practices makes a lot of sense for the situation we observe in the contemporary labour market. First of all, work-related immigration is a very popular modern practice. In the European Union, a practice of using cheaper labour and hiring immigrants instead of citizens is widely used (ACAS 2).

This creates conflicts and dissatisfaction among the native workers due to the reduction of average salaries and increasing difficulty to find employment for them. A similar situation can be observed in China, rural dwellers with low-qualification are frequently hired for lower wages and longer hours, whereas qualified specialists face difficulties finding well-paid jobs. The contemporary world seems to develop too fast for modern workplaces to find enough time to adjust to the changeable environments. This creates high rates of fragmentation of workplace relationships that negatively affect business organisations creating high employee turnover and job dissatisfaction. The number of employees hired by the contemporary organisations has changed unevenly.

For example, technological progress allowed replacing some employees with machines in a number of businesses, while in others the number of workers with low qualification grew due to expansion. For example, the growth of Amazon led to the establishment of many departments and warehouses all around the world. The work at the warehouses is based on high speed and requires a large number of employees for monotonous duties such as packing.

Overall, flexible labour practices create instability and turnover at the workplaces, which immediately leads to employment fragmentation. This phenomenon creates a large gap between the kinds of the workforce based on their salaries. Physical labour becomes less demanded and loses prestige; at the same time, some professions grow overpopulated as too many people start to pursue them. Besides, some of the old fields lose popularity, while new ones start to occur. The rapid change that dominates the modern labour market creates a lot of confusion because the number of well-paid jobs gets narrower by the year.

Works Cited

Outsourcing and the fragmentation of employment relations: the challenges ahead. ACAS. 2012. Web.

Rappa, Frank. The Difference between Vertical & Horizontal Business Organisations. 2015. Web.

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Employee Relations and Organisational Structure

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