An organization chart is a diagram that shows the relationships of different departments, teams, positions and employees within a company. It clarifies the chain of command and lays the groundwork for communication and authority.
Having an organization chart is important because it allows your employees to visualize your company’s structure and leadership. It helps workers know who to report to and ensures that important information gets to the right people.
Most HR Software currently available will ask you to create an organization chart when first starting to use it. The traditional organization chart starts with one position at the top that holds the most authority, then slowly trickles down as it branches out across different levels.The negative effect of this is that most organizations do not always fall into this type of clear-cut and easy-to-understand structure. The typical top/down organization chart is not a one size fits all solution and trying to force your company to conform to these standards is not effective.
Instead, at ProSky we propose that you start from the bottom of the organization and work upward by creating pathways for each employee in your organization first. Once you have these pathways in place, the organization chart is reverse-engineered based on your company’s needs and true authority structure.
Career pathways are an ideal way to organize and manage the talent at your company. Every pathway lists out the current role and responsibilities for your employees as well as the skills and training needed for them to progress. It combines the benefits of succession planning into your organizational development strategy to create a continual performance process for each role in your company.
Goals, milestones, and key performance indicators related to the overall success of the company can be set so employees can clearly see their role in the bigger picture. Rewards, such as promotions or pay raises, can be added at points along the pathway once employees reach a certain point of development level of performance.
Pathways will help build and design your organizational structure to meet your business' objectives by:
Helping employees to know their responsibilities and opportunities for advancement.
Guiding their growth and development through the ranks of the company.
Divide the functions of a company, enterprise or department among specific roles.
Help upper management see opportunities for promotion and hiring internally to fill gaps.
Once it is created, you can easily specify a person or pathway that the pathway reports to and then map out the organizational chart accordingly. Instead of trying to make your company structure fit the top/down approach, you will get a more accurate representation of your company’s structure by using this method of creating pathways to determine your organizational chart. Benefits include:
A Flexible Organizational Structure
A big weakness with traditional organizational charts is that they can very quickly become out-of-date. Whether it be employee turnover, evolving industry needs, or even just company growth, the organization structure will change and may change frequently.
As organizations grow, trying to apply one set structure is not scalable or reliable. For example, the 5 person start-up and the 1000-employee corporation cannot use the same structure. Companies must adapt their organizational structure and charts or it will result in confusion and problems.
Pathways is a flexible structure that changes with the company. Because it is based around the needs of the company and employees, you can adapt it to different management styles and goals. You are encouraged to get employee input to see how and where they want to develop, there is no single path to the top. In fact, some employees may prefer non-managerial positions and roles with less pressure.
Your company will no longer be confined by a rigid organizational chart. Rather, your organizational chart will adapt to changes in the company as it grows and employees transfer, leave, or are promoted. Instead of having to update the org chart manually on the software each time changes happen, this process can be automated and management will always have an accurate representation of organizational roles and structure.
Accurate View of Company Hierarchy
Most organizational charts only show formal “up/down relationships" and often do not show horizontal/lateral relationships. The hierarchy is further complicated when you have relationships across different departments in large companies.
Pathways will help you no matter what type of organizational structure your company may have and regardless of how big or small your company is, By having each pathway report to other pathways, your org chart will accurately show you the company hierarchy. This makes it so that communication and reporting can be handled smoothly at each level and department in the company.
You can also adjust the hierarchy to fit your organization better (i.e.- make vertical hierarchies flatter by allowing for lateral growth instead of upward). Employees are not limited by their roles and can cross-train and cover responsibilities among multiple departments.
Easier Restructuring, Promotion, and Hiring
Pathways gives you a bird's eye view of where the organization sits allowing upper management (such as the CHRO) to know where people are at in the company. For example, does a department have too many people doing sales roles and too few filling marketing roles? Using pathways to determine your org chart will allow you to see where needed roles and positions are lacking.
Because tracking the talents and skill sets of employees is an important part of Pathways, it’s easier to restructure the organizational chart arrangement if necessary. Employees with the proper skillsets can be moved “horizontally” between departments to fill gaps, or employees can be trained to develop the needed skillsets. Employees under-performing in certain roles can be put on a different pathway more suitable for their skills and personality.You can structure pathways in such a way that every employee is working toward a higher position, and each pathway has replacement being trained to take over the responsibilities. This way, you will be able to hire internally to fill vital upper management roles with experienced employees and limit outside hiring to more entry-level positions.
Having a clearly established organizational chart is important to creating a solid structure for your company. Through the use of succession planning and pathways, you can make the organizational chart work for the benefit of your company instead of trying to fit your employees into a traditional hierarchy. This will help employees to understand their role and relationship with leaders better and allow the company as a whole to adapt to different situations more easily.
For more information about how succession planning and career pathways can benefit your company, schedule a call with one of our specialists for a demo of our software features.