What is the Laminar flow, and what role does Human Resource Management, Corporate Structure & Workflow play?

The area of Human Resources (HR) includes a variety of elements, from hiring, legal compliance, training, compensation, and benefits administration to aligning the human talent strategy to the organization’s vision. HR is a vital business partner, supporting the organization’s goals by providing strategic support.

The Correlation between HR and Organizational Strategy and Structure

As a business function, HR needs to support the organization’s vision and short-term and long-term goals. An organization’s strategy defines its primary purpose and resource allocation (Bateman & Eithamal, 1990; Kavale, 2012; as cited in Babalola & Nwanzu, 2020). In contrast, organizational structure supports and follows this strategy, provides clarity, aids better decision-making, and brings stakeholders together to achieve the organization’s objectives. Businesses might use a hierarchical, flat or boundaryless organization structure, depending on their strategy. There are three strategic types of organizations per Miles et al. (1978): Defenders, Analysers, Prospectors. Which structure an organization chooses depends upon its strategy.

Larger manufacturing and production organizations are likely to adopt a defender strategy (Hung et al., 2018) and choose a hierarchical or pyramid structure. Management uses a top-down approach to cascade down their decisions. Prospectors focus more on new product implementation, research and development, market research and related activities (Hung et al., 2018), which requires them to act and decide quickly. A flat and decentralized organizational structure supports this need for speed, flexibility, and fast collaboration. Human Resource’s role in the organization is to identify and support the best organizational form, aiming for a Laminar[1] flow of information and collaboration, yielding to the highest possible competitive edge.

Human resource management’s core aim is to create the beforementioned Laminar organizational structure, decreasing friction, resistance, and increasing speed. Organizations need to react to globalization and consider the effects on culture, recruiting, and competition. While globalization can be a risk to the company, it can also offer new ways of working together (remote/virtual workforce), increasing a diversified talent pool for recruitment, and opening new markets. Furthermore, HR affects organizational strategy and structure by optimizing labor costs while maintaining or building the firm’s culture and ethical values. Maintaining business ethics in HR management is vital and directly correlated to operational performance and success (Al-Tarawneh, 2020).

In summary, HR has a significant impact on the organization’s bottom line by focussing on cost control, employee selection and retention, workplace safety, team structure, and matching people with the company and their roles.

Organizational, Environmental, and Individual Challenges and their Impact on Work-Flow Analysis

Fan et al. (2012, as cited in Fan et al., 2015) define work-flow as the automation of business processes. It includes a set of tasks, people, or resources necessary to accomplish a goal. Therefore, work-flow analysis describes the “process of examining how work creates or adds value to the ongoing processes in a business” (Gómez-Mejía et al., 2016, p.48).

From an organizational perspective, a company needs to review its current work-flow to identify any processes or efforts that are redundant or do not add value. The paragraphs above outlined the importance of implementing an appropriate organizational structure (hierarchical, flat, our boundaryless), focusing on value-adding and the company’s goals. Enhance efficiency is one of the main targets in corporate structuring. Environmental challenges might present themselves to an organization due to rapidly changing outside parameters like globalization, the transition to a remote workforce, new technology, enhanced legislation, or any force majeure event. The current Covid-19 pandemic required a rapid change in many industries, accelerating the trend of remote working and industrial metamorphosis. Even after the Covid pandemic, organizations and employees will not return to old, pre-Covid processes.

Furthermore, individual challenges need to get addressed in a work-flow analysis. Individual productivity increases when employees are motivated (a topic which will be discussed in more detail in the following paragraphs), feel empowered and appreciated. Employees value items like job security or task rotation to avoid brain drain differently, and organizations enhance efficiency by identifying which factors are essential to their workforce. These factors can differ from a sociological, economic, and individual view (Ozsoy, 2019).

How Work-Flow Analysis supports Strategy and Organizational Structure

Managers need to review if the work-flow is value-adding, aligned with the business goals, and as efficient as possible. By analyzing the current processes, the organization further learns about workflow interdependencies, which describe process “handoffs” when multiple teams or departments collaborate. Business process reengineering might be an appropriate tool to enhance efficiency and speed in internal processes. Furthermore, work-flow analysis might help to review if an organization utilizes the most efficient structure to accomplish its strategy and goals. In this context, companies should continuously evaluate which team structure fits them best (e.g. self-managed, problem-solving, special purpose, virtual).

Motivation Theories

A motivated employee, who feels more empowered and supported, is more efficient and committed to an organization and its goals. The literature supports multiple motivational theories. Herzberg (1968) argues in his Two-Factor Theory, that motivation is driven by motivators (internal job factors), which lead to job satisfaction. The second element is hygiene or maintenance factors (external job factors). Herzberg argues that motivators have a direct correlation with motivation, while hygiene factors not necessarily. These maintenance factors are deemed “basis,” and their existence would not increase motivation. However, their absence would lead to dissatisfaction.

The work adjustment theory proposes a correlation between employee motivation and the “fit” to the assigned tasks. Another interesting view is the goal-setting model, which asserts that employees will be more motivated when they have specific objectives. Lastly, the job characteristics theory states that certain core characteristics of a job (e.g. skill variety, autonomy, feedback) positively impact employee motivation. 

The Impact of Job Design and Analysis on Organizational Structure

After discussing what motivates employees and what characteristics jobs need to entail, we can now look into the actual role design. When creating a position in an organization, management should evaluate work simplification, job enlargement, job rotation, job enrichment, and team-based job design. All of these elements focus on efficiency or motivation from different angles. Work Simplification aims to reduce complexity in a job and increase speed and efficiency accordingly. Such a method is often utilized in a hierarchical organization structure, where employees need to perform standard tasks (e.g. in a manufacturing setting). While work simplification might enhance efficiency and reduce errors, it might lead to a more monotonous work environment. On the other side, job enlargement and rotation intend to prevent this repetitious work atmosphere by expanding duties or rotating workers. Job enrichment aims to make roles more stimulating and increase employee motivation accordingly. This concept targets to change a tedious and unvaried workflow into a process in which employees are responsible for the entire product or service (and not just one step). A good example would be a customer service coordinator, who handles all customer inquiries and is the primary liaison. Lastly, Team-Based Job Design focuses on the team and allows them to decide how to accomplish the task. An organization needs to evaluate these concepts’ pros and cons and their impact on motivation and organizational structure.

The Job Analysis phase follows after the job design phase is completed. It “identifies the tasks, duties, and responsibilities of a particular job” (Gómez-Mejía et al., 2016, p. 57). Clear communication of these tasks to the employees is vital to ensure alignment. The organization and employees need to understand what the role entails and its impact on the company. This information serves further as a basis for many functions, including performance reviews, hiring, compensation discussions, and organization advancement. 

Flexible Workforce and Human Resource Information Systems

An organization needs to stay agile when reacting to a changing market environment. A sudden change in demand for certain products, as recently triggered by the Covid-19 pandemic, requires swift action and adjusting the workforce. While companies employ a core workforce, they need to act promptly if business conditions change. Companies utilize contingent employees, including temporary workers and subcontractors, when an increase in the short-term workforce is required. These contingent employees often don’t enjoy the same benefits or compensation as core workers. Companies can further outsource and offshore activities on a temporary or permanent basis. However, while this might lead to a cost reduction, consideration should be given to quality concerns and the impact on the organization’s culture. 

The trend of remote working, which accelerated due to the Covid-19 pandemic, provides opportunities (e.g. geographically extended talent pool, more flexibility, and better work-life balance) but also enhances the risk of burnout, as employees face the challenge of “always being online and reachable.” With remote working becoming an accepted option for many organizations, their internal processes and structures will need to change. Many larger companies (e.g. Salesforce) announced a rethinking of their required office space and working structure.

With organizing a workforce, a company needs to adhere to legal requirements while handling all HR-related topics like payroll processing, benefit and 401K administration, scheduling, and time and attendance. Human resource management activities might be an administrative burden but also positively impact organizational performance (?obos et al., 2020). A Human Resource Information Systems can assist with these tasks securely and efficiently. 

References

Al-Tarawneh, K. I. (2020). Business ethics in human resources management practices and its impact on the organizational performance. Verslas: Teorija Ir Praktika / Business: Theory and Practice, 21(1), 402–411.

Babalola, S. S., & Nwanzu, C. L. (2020). Role of organizational strategy and entrepreneurial orientation on organizational effectiveness. International Journal of Entrepreneurship, 24(1), 1–15.

Fan, S., Kang, L., & Zhao, J. L. (2015). Workflow-aware attention tracking to enhance collaboration management. Information Systems Frontiers, 17(6), 1253–1264.

Gómez-Mejía, L. R., Balkin, D. B., & Cardy, R. L. (2016). Managing Human Resources (Eighth Edition). Pearson.

Herzberg, F. (1968). One more time: How do you motivate employees? Harvard Business Review, 46(1), 53–62.

Hung, W.-H., McQueen, R. J., & Hsu, W.-H. (2018). Linking organisational critical activities with business typology. Technology Analysis & Strategic Management, 30(4), 447–460.

?obos, K., Malátek, V., & Szewczyk, M. (2020). Management practices in area of human resources and monitoring results as determinants of sme’s success in Poland and the Czech Republic. E+M Ekonomie a Management, 23(2), 114–125.

Miles, R. E., Snow, C. C., Meyer, A. D., & Coleman, H. J. (1978). Organizational strategy, structure, and process. The Academy of Management Review, 3(3), 546–562.

Ozsoy, E. (2019). An empirical test of Herzberg’s two-factor motivation theory. Емп?ричний Анал?з Двофакторно? Мотивац?йно? Теор?? Герцберга, 1, 11–20.

[1] A Laminar flow describes that fluid particles are following smooth paths in layers, with each layer moving effortless past the adjacent layers, decreasing friction, resistance, and increasing speed.