Chop It In Half – The Dysfunction Of Large Organizations

I know this isn’t about Internet marketing but how organizations function–or fail to–has long been an interest, and complaint, of mine.

I have believed for years that once an organization reaches 100 employees, you should chop it in half. This comes to mind because of an article in today’s New York Times about the cluelessness of many Human Resources departments.

The story cites a Workspan Magazine study conducted by Spherion and Harris Interactive which finds that the top three reasons HR people cite for employees deciding whether to stay or leave an employer are absolutely different from the top three reasons employees themselves cite.

Employees:

1. Benefits
2. Compensation
3. Growth and Earning Potential

Human Resource Professionals:

1. Management Climate
2. Supervisor Relationship
3. Work Environment

HR people thought Compensation would be in seventh place, which is where the employees listed Supervisor Relationship. The results do not surprise me at all.

The reasons I think companies should consist of fewer than 100 employees is because 1) they are by and large far more nimble and flexible and therefore more capable of adapting to a quickly-changing marketplace, 2) because everyone knows one another, there is far more accountability within the organization, 3) office politics are more easily kept in check, and, most importantly, 4) hiring decisions are made much closer to those who know most about the job in question.

I’ve worked for, with, and observed organizations of all sizes and have come to the conclusion that the Human Resources department can become an unhealthy power center that can often get in the way of an organization’s ability to excel. I do not fault the human resource people themselves; I think it’s just the nature of the beast. As an organization grows in size, so does the power of HR.

Obviously, you cannot run an organization with thousands of employees without a human resources department. It is simply most efficient for big organizations to have a central unit that administers personnel matters.

The main problem, though, is human resources’ role in the hiring process. Because they are often the main unit through which the new hire screening process begins, they are the first wall that can turn away qualified candidates. Since it is impossible for them to know the ins and outs of each job position, they simply do not know what they don’t know. As a result, they can inadvertently turn away qualified and talented people who may be the best candidates for the job.

I don’t pretend to know the solution to the problem, but here are a few ideas: 1) Job descriptions that are written by the people who actually hold the position; 2) exit interview questions that ask the outgoing employee what qualifications they think are needed for their job, and 3) whenever possible, allowing departments or business units of 100 or fewer people to be run, as much as possible, essentially as a separate company in order to try and create an environment conducive to peer-to-peer accountability.