Graduate Plus: MANAGEMENT: What to do when the goalposts move

Flattening of organisational structures, or "delayering", is leading to low morale, more work and employees feeling that they have fewer opportunities for advancement. This is not so surprising, perhaps. But in pointing out that more than 90 per cent of managers see no benefit from the practice, research by Roffey Park Management Institute, in West Sussex, underlines the perception that the process is simply a fancy name for cost-cutting.

Moreover, the centre's findings that junior managers are more critical of delayering than their senior counterparts suggests that the reduction in the number of levels has done nothing to help organisations' communications problems.

It is not all bad news. In several cases, employees reported benefits from a heavier workload, while the researchers spotted clear links between increased autonomy and higher morale. But there are enough lessons to give employers and employees pause for thought.

The study carried out last year shows that 95 per cent of UK-based organisations have undertaken delayering exercises or are about to. This policy is also becoming increasingly abroad abroad, with European, US and multi-national companies adopting it across all sectors in an attempt to prosper in an increasingly competitive environment.

For US and UK organisations - except in special cases, such as partnerships and consultancies - moving towards flatter structures represents a fundamental departure. Japanese business, long influenced by the quality management guru W Edwards Deming, has used flatter structures for decades.

But in the West, business leaders are used to operating through old-style "command and control" structures. And only now are they are trying to make themselves more responsive by giving employees greater responsibility for the way business is conducted. Carried to its logical conclusion, the process could lead to the "virtual organisation" in which flexible teams are brought together for specific purposes.

First, though, a number of issues needs to be dealt with, particularly finding ways of motivating and rewarding people who no longer have a clear career path through promotion.

Linda Holbeche, assistant director at Roffey Park, who conducted the research, says: "While flatter structures offer clear advantages to the organisation, our research shows that the benefits to the employee are less obvious.

"Flatter structures work on the basis that employees are willing to adjust their expectations about career development. There are ways of helping employees to do this: through personal development processes and training, they can identify their own goalsand values, compare their performance with other managers and identify ways of increasing their satisfaction."

However, the research of 200 managers from several areas, including financial services, manufacturing and public services, indicates that this is not happening widely. Instead, many "fast-track" employees are moving to other companies as the job market improves.

Such moves, however, could turn out to be short-lived unless the employees themselves take care to develop themselves in ways that the employer increasingly is not. The widely recognised end to the "job for life" means that employees - especially youngermanagers - need to learn how to market themselves internally and externally, as well as to develop their abilities.

Human resources departments can help, provided they take the opportunity to be more than messengers. "For them to be really effective, HR executives need to be involved in the shaping of the business strategy out of which the need to delayer emerges," says the report.

"Career management in flatter structures calls for an approach which explicitly takes into account both organisational needs and employee interests. It will encompass recruitment, personal development plans, lateral moves, international assignments, development positions, career bridges, lateral moves and support for employees who want to develop. It calls for creativity in identifying ways to provide development opportunities and enhance employee loyalty," it concludes.