Organisational structures on workers' wellbeing

Employees in more hierarchical organisations have higher levels of wellbeing than those of flatter organisations.

  •  Professor Ori  HeffetzProfessor Ori Heffetz
    Neither agree nor disagree
    I honestly don't know the answer. Once we add hierarchy, I can imagine those at the top getting better off and those at the bottom getting worse off, but perhaps also getting something to look forward to, and it is hard for me to predict the overall effect. I would also imagine this has to depend on intra-organizational mobility, and I am not familiar with evidence on the hierarchy-mobility question.

  •  Professor Wenceslao  UnanueProfessor Wenceslao Unanue
    Completely disagree
    Self-determination theory has consistently shown that autonomy is a key psychological nutrient for a happier life and for better organizational performance. I think that, in average, hierarchical organizations does not help to satisfy this need. Moreover, they may frustrate it.

  •  Professor Heinz  WelschProfessor Heinz Welsch
    Neither agree nor disagree
    A flatter organisation may mean that there are more people at the same level, hence you compete with more people. On the other hand, competition may be fiercer when the group is smaller. Other organisational factors, such as the social climate, may be more important for wellbeing (life satisfaction) than the formal structure.

  •  Professor Martin  BinderProfessor Martin Binder
    Completely disagree
    Being one's own boss or working autonomously fulfills a deep human psychological need and is conducive to work and life satisfaction. If hierarchical organizations stifle individuals' autonomous organization of labor, this will impact negative on their well-being.

  •  Professor Homa  ZarghameeProfessor Homa Zarghamee
    Neither agree nor disagree
    Research shows that happiness with hierarchical versus flat organizations is worker-, leader-, and context-specific (http://www.sciencedirect.com/science/article/pii/S0191308510000031). The two types of organizations attract different types of employees (http://journals.sagepub.com/doi/abs/10.1177/1948550616649241). The uncertainty, lack of clarity, and lack of coordination associated with flat organizations may be upsetting for some (https://www.ncbi.nlm.nih.gov/pubmed/24512510); for others, such concerns may pale in comparison to the increased empowerment associated with flat organizations.

  •  Professor Mariano  RojasProfessor Mariano Rojas
    Disagree
    Job satisfaction does depend on the attributes of employment, hierarchical organizations may provide some certainty and some side benefits which flatter organizations may not provide. However, what is crucial for job satisfaction is for people to pursue their own passions; in other words: intrinsic motivation is fundamental for job satisfaction. It seems to me that hierarchical organizations are more likely to deter intrinsic motivation because bosses are inclined to command over workers rather than to leave them free to pursue their own interests. Some production processes may allow for having flatter organizations while others may require a more hierarchical organization; however, the key in those processes that require hierarchical organization is for bosses and Human-Resources Managers to hire people that have passion in doing what they are expected to do and then to coordinate them in such a way that their passion is not affected. We must also remember that many people are self-employed and small entrepreneurs out of choice.

  •  Professor Dan  HaybronProfessor Dan Haybron
    Neither agree nor disagree
    It isn't clear, and may depend on the type of organization involved, but I suspect employees tend to do better in flatter organizations, on average. This is mostly because I would expect them to enjoy higher levels of autonomy, be more engaged in their work, and find it more meaningful--all of which are associated with higher wellbeing, especially on 'eudaimonic" approaches. This is based on the assumption that more hierarchical organizations would tend to give employees less control in their jobs, and keep decision-making at a greater remove from those doing most of the work. As well, being lower in status hierarchies is also associated with lower wellbeing. On the other hand, flatter organizations may be more stressful, with employees carrying more of the load. The situation may be akin to owning a small business, which can be more rewarding in important ways, but also more stressful. So it isn't obvious what the net effect would be, and may depend on what one takes to be most important for wellbeing, and there isn't a consensus on that. Some people would likely prefer one type of organization, others the other.

  •  Professor Ruut  VeenhovenProfessor Ruut Veenhoven
    Disagree
    life satisfaction Cross-national research has shown that life satisfaction tends to be lower in nations where organizations are more hierarchical. There a few studies within nations on the effect of hierarchy on the life-satisfaction of employees, but related research on autonomy suggests a negative effect as well. To my knowledge this matter has not yet been investigated using a multi-level approach

  •  Professor Leonardo  BechettiProfessor Leonardo Bechetti
    Completely disagree
    The literature on wage differentials find a positive size wage differential not explained by standard factors that is probably a compensating effect for working in organisatons with more hierarchy job satisfaction literature tells that freedom of enterprising and initiative has significant positive effects on job satisfaction

  •  Doctor Anna  AlexandrovaDoctor Anna Alexandrova
    Disagree
    Autonomy and control over one's work are crucial for well-being on any definition.

  •  Doctor Daniel  BenjaminDoctor Daniel Benjamin
    Neither agree nor disagree
    I have in mind well-being as defined by what people prefer. On the one hand, people in flatter organizations have more autonomy, which is generally good for well-being. But hierarchical organizations may have a clearer mission, and the resulting sense of purpose can be good for well-being. There is variation across people in how much they like authority. People at the top of a hierarchy have power and control, which is generally good for well-being, while people at the bottom of a hierarchy may lack those aspects of well-being.

  •  Professor Richard  EasterlinProfessor Richard Easterlin
    Disagree
    Job satisfaction tends to vary directly with occupation when the later are ranked by prestige status. There is more occupational heterogeneity in the hierarchical organization ane hence a wider disparity in job satisfaction.

  •  Professor Arie  KapteynProfessor Arie Kapteyn
    Disagree
    I am partly basing my response on the Whitehall studies showing that health and life expectancy are related one's position in the hierarchy and the extent to which one can make one's own decisions. Stress in situations where one has little scope for personal actions is worse than 'good stress" where this can be used for forceful action

  •  Professor Ada  Ferrer-i-CarbonnellProfessor Ada Ferrer-i-Carbonnell
    Neither agree nor disagree
    On one side, employees in more hierarchical organisations might have higher levels of wellbeing if they believe that hierarchy implies a larger probability of own job promotion. For example, Clark et al. (2009) find that workers (especially men) in Denmark are more satisfied if others? wages within the firm are higher. Similarly, Levitt and Venkatesh (2000) argue that the tournament structure of the drug-selling street gangs explains why ?foot soldiers? are willing to take a job with a low wage and a high risk of death. On the other side however happiness correlates with job status (DiTella and MacCulloch, 2010) and therefore hierarchical organizations might have smaller average satisfaction as opposed to flatter organizations. In addition, in hierarchical organizations workers typically have less autonomy, a variable determining job satisfaction. Taking these two effects into account, it could be interesting to see whether there is an optimal level of hierarchy or wage spread that maximizes individuals? happiness. References: Clark, A., N. Kristensen, and N. Westergard-Nielsen, 2009. Job Satisfaction and Co-Worker Wages: Status or Signal? Economic Journal, 119; 430-447 Di Tella, R and R. MacCulloch, 2010. Happiness Adaptation to Income and to Status in an Individual Panel. Journal of Economic Behavior & Organization, 76: 834-852 Levitt, D.D. and S.A. Venkatesh, 2000. An Economic Analysis of a Drug-Selling Gang's Finances. The Quarterly Journal of Economics, 115: 755-789.

  •  Professor Shigehiro  OishiProfessor Shigehiro Oishi
    Neither agree nor disagree
    Most people probably say that they would be happier in flatter organizations than hierarchical organizations. But, I think this is an affective forecasting error. If someone knows what she needs to do, is motivated to do, and know how to do, a flatter organization will work very well (Because this person does not need a lot of instructions from the above). In contrast, if someone does not know what she is supposed to do, is not motivated to do, or does not know how to do it, then a flatter organization might be a disaster. Job autonomy is of course great, but uncertainty that sometimes comes with job autonomy is not great. So, I think this depends very much on the person-organization fit.

  •  Professor John  HelliwellProfessor John Helliwell
    Disagree
    The best evidence for this is that for more than 2 million employed respondents in the United States, life evaluations are much higher for those who regard their immediate supervisor as a partner than for those who regard the supervisor as a boss. The difference, favouring those working in the less hierarchical partner-type organisations, is very large - 0.4 points on the 0 to 10 scale used for the Cantril ladder life evaluations.

  •  Professor Nick  PowdthaveeProfessor Nick Powdthavee
    Disagree
    I have job satisfaction in mind when answering this question. We know from evidence that work autonomy and work empowerment are strong predictors of job satisfaction, and that these two indexes are relatively lower amongst workers in are hierarchical organisations. Only when boss competency in more hierarchical organisations is high would workers' job satisfaction be high as well.

  •  Professor Peter  SingerProfessor Peter Singer
    Disagree
    This is contrary to my understanding of the research, but it is outside my area of expertise.

  •  Doctor David  JohnstonDoctor David Johnston
    Disagree
    I suspect that workers in more hierachical organisations typically have lower levels of autonomy over their work (job control) than workers in flatter organisations, thus leading to lower job satisfaction, and lower overall wellbeing.

  •  Doctor Jan-Emmanuel   De NeveDoctor Jan-Emmanuel De Neve
    Disagree
    There is quite some suggestive evidence that having agency in processes is associated with higher wellbeing. Given that flatter organizations allow for employees to engage more actively across the organization it will likely mean that flatter organizations provide more of a sense of agency and thus greater wellbeing. At the same time, employees also desire clarity in order to operate efficiently and effectively. As such there would appear to be something of a trade-off between agency and clarity in designing organizations although on balance the sense of agency is likely to dominate the need for clarity. These dynamics presumably also interact with the skill level of the industry.

  •  Professor Bruno  FreyProfessor Bruno Frey
    Completely disagree
    Together with Matthias Benz, I have empirically shown that self-employed people are happier than those working as employees in organizations. This can be generalized because in large organizations employees typically have less autonomy than in flatter organizations. It can therefore be concluded that they enjoy cet. par. higher life satisfaction.

  •  Doctor Chris  Barrington-LeighDoctor Chris Barrington-Leigh
    Neither agree nor disagree
    I think this might be different for the domain 'satisfaction with work' and 'life satisfaction', since, for instance, more responsibility at work is associated with the former but less so with the latter. Overall, I'm not sure of the relationship between trust in the workplace and the strength of hierarcy. There is work done to link work trust to subjective well-being, and my guess is that coworker and manager trust tends to be higher in horizontal organizations.

  •  Professor Stefano  BartoliniProfessor Stefano Bartolini
    Completely disagree
    Flat organizations promote well-being in the workplace. Indeed, the way companies are organized affects some crucial determinants of satisfaction for one?s job, such as the quality of relations with colleagues. The latter increases when the level of trust between people who work together increases and when relations with bosses are perceived as based on respect, cooperation and support. The most satisfying jobs are those in companies where the communication style of managers is based on these criteria and where interpersonal contacts are more frequent. Flat structures heighten trust because they tend to shift the focus of the organization from competition to cooperation. Responsible and empowered individuals find it easier to cooperate. Besides the quality of relations, job satisfaction increases also with the perception of having control over one?s work, with the opportunity of expressing one?s skills and with the diversity of the tasks to be performed. These features ? related to the needs of autonomy and self-expression ? are typical of flat structures. Apart from having happier employees, flat organizations are also more flexible, creative and effective in problem solving. Their employees show higher levels of engagement compared to those of hierarchical structures. This explains why these organizations are spreading. As digital technologies make it easier to work in a distributed manner, flat structures are likely to become increasingly common. There are not only reasons relating to well-being suggesting that it is more advantageous to treat people with dignity and to provide them with autonomy, organizing small teams rather than large hierarchies. There are in fact sound business reasons as well.

  •  Professor Jan  DelheyProfessor Jan Delhey
    Neither agree nor disagree
    Whether employees fare better in terms of well-being when organizational hierarchies are flat very much depends on the national culture and people's own values. Cross-cultural psychology has shown that people around the world differ in how much social hierarchy they accept and want. A flat hierachy might be very conducive to happiness in the Western world - in particular for highly-educated employees who like to work independently. Yet a flat hierarchy can cause problems in cultures which accept and expect hierarchies.

  •  Professor Conchita  D'AmbrosioProfessor Conchita D'Ambrosio
    Disagree
    The level of wellbeing I have in mind is job satisfaction. Flatter organizations offer more equal positions, reducing the depth of the chain of command. This may increase job satisfaction of workers.

  •  Professor Alois  StutzerProfessor Alois Stutzer
    Completely disagree
    People working in hierarchical organizations experience less autonomy reducing procedural utility from work. This disamenity seems not fully compensated by higher outcome utility from income. These are the main results of a very nice study by Matthias Benz and Bruno S. Frey (Being Independent Is a Great Thing: Subjective Evaluations of Self-Employment and Hierarchy. Economica 75(298): 362-383).

  •  Doctor Esteban  CalvoDoctor Esteban Calvo
    Disagree
    Organizational structure is unlikely to be as decisive to the subjective well-being of employees as the quality of human relations and job characteristics within the organization.

  •  Professor Felicia  HuppertProfessor Felicia Huppert
    Disagree
    There does not appear to be any research evidence that bears directly on this issue. However, there are two reasons to conjecture that well-being will be higher in organisations with flatter structures. It is known that opportunities for employee participation, choice, and engagement are associated with much higher levels of satisfaction, morale and retention, and such opportunities are likely to be greater in less hierarchical organisations. Second, compared to flatter organisations, hierarchical organisations are likely to have a steeper social gradient, and the work of Marmot and others has shown that the steeper the social gradient, the greater the inequalities in physical and mental health, including mental well-being. Having a substantial number of employees with low well-being is likely to have an adverse effect on others in the organisation, potentially reducing overall well-being. What we do know for certain from positive organisational psychology , notably the work of Kim Cameron and colleagues, is that subjective well-being is strongly influenced by organisational culture and leadership style. A workplace in which individuals feel valued, secure, supported, and respected will have higher levels of well-being, regardless of whether the structure is flat or hierarchical.





Tilting the tax and subsidy mix in favour of more hierarchical organisations (in a revenue neutral manner) would probably improve the wellbeing of employees.

  •  Professor Ori  HeffetzProfessor Ori Heffetz
    Neither agree nor disagree
    See above. And then there is the question of how this is going to be measured and implemented -- another big question.

  •  Professor Wenceslao  UnanueProfessor Wenceslao Unanue
    Neither agree nor disagree
    I can`t see any reason why to do that. However, I think that if governments decide to do it, the final effect on workers' wellbeing for those working in more hierarchical companies is not clear. It will depend on several factors that need to be considered (e.g., how to distribute the extra money, the association between money and happiness, etc.). Importantly, the global effect in the economy should also be considered (e.g. economic grow/GNP/salaries will be affected)

  •  Professor Heinz  WelschProfessor Heinz Welsch
    Neither agree nor disagree
    The effect on wellbeing (life satisfaction) is ambiguous for the same reasons as mentioned in the comment to Statement No. 1.

  •  Professor Martin  BinderProfessor Martin Binder
    Disagree
    None

  •  Professor Homa  ZarghameeProfessor Homa Zarghamee
    Disagree
    The context-specificity of the relationship between employee wellbeing and organizational hierarchy suggests that policies favoring all hierarchical organizations (without qualification) would diminish many workers' wellbeing.

  •  Professor Mariano  RojasProfessor Mariano Rojas
    Completely disagree
    This statement could make some sense if we agree that employees are more satisfied in hierarchical organizations. However, I do disagree with that statement. Hence, I see no reasons for considering a tax/subsity scheme that favours more hierarchical organizations.

  •  Professor Dan  HaybronProfessor Dan Haybron
    Neither agree nor disagree
    Even if the answer to this question is yes, it may be a bad idea, as people may differ in what type of organization best suits them, and I think it important to respect their values even if it doesn't make them better off. But I suspect it wouldn't be beneficial on average, partly because it may diminish workers' sense of meaning, engagement and control in their work (though again, it may reduce stress). But also, it may make some organizations less efficient--and presumably will, if they are well-managed and structured in a way that works for them. In that case, employees may suffer, for instance through layoffs. Likely different organizational structures make sense in different cases, and it may be unwise for policymakers to push for a uniform structure for all cases, especially given the likelihood of unintended consequences. For instance, giving incentives to proliferate needless layers of management.

  •  Professor Ruut  VeenhovenProfessor Ruut Veenhoven
    Completely disagree
    Life satisfaction

  •  Professor Leonardo  BechettiProfessor Leonardo Bechetti
    Completely disagree
    The reasons are those explained above. I also believe that it would not be good to do the contrary since compensating wage differential s level the difference in wellbeing in equilibrium

  •  Doctor Anna  AlexandrovaDoctor Anna Alexandrova
    Disagree
    This would only be true if these hierarchical organizations were extraordinarily successful on other measures, I cannot think of any such cases.

  •  Doctor Daniel  BenjaminDoctor Daniel Benjamin
    Disagree
    If anything, I would expect markets to provide too much hierarchy, since managers generally prefer hierarchy over flatness in an organization. That is, markets left to themselves probably underweight the well-being of employees. Subsidizing hierarchy would probably move markets further in the direction preferred by managers. (If employees were made better off by this shift, then it would already be the benchmark in the absence of subsidies.)

  •  Professor Richard  EasterlinProfessor Richard Easterlin
    Disagree
    If the goal is to improve the job satisfaction of employees, this does not seem like a high priority way to pursue it.

  •  Professor Arie  KapteynProfessor Arie Kapteyn
    Disagree
    this follows from the previous comment

  •  Professor Ada  Ferrer-i-CarbonnellProfessor Ada Ferrer-i-Carbonnell
    Neither agree nor disagree
    It depends on whether the positive effects overweight the negative ones (see answer to question 1). It remains thus an empirical question whether there is an optimal level of hierarchy or wage spread that maximizes individuals? happiness. This optimal level might also depend on the country.

  •  Professor Shigehiro  OishiProfessor Shigehiro Oishi
    Neither agree nor disagree
    Because I don't think that one type of organization is in general superior to the other, this policy does not make any sense to me.

  •  Professor John  HelliwellProfessor John Helliwell
    Disagree
    Tax systems should be simple and neutral across business forms. The magic of flatter organization structures needs to be discovered and implemented by those who run organisations and chosen by those looking for good jobs.

  •  Professor Nick  PowdthaveeProfessor Nick Powdthavee
    Neither agree nor disagree
    With job satisfaction in mind, it is difficult to imagine that the two mixed strategies would lead to an overall improvement in workers' wellbeing. This is an empirical question that requires some knowledge of the trade-offs between the two strategies on wellbeing, which I'm afraid I don't know the answer to.

  •  Professor Peter  SingerProfessor Peter Singer
    Disagree
    This is contrary to my understanding of the relevant research, but this is not my area of expertise.

  •  Doctor David  JohnstonDoctor David Johnston
    Disagree
    For the same reason as Q1

  •  Doctor Jan-Emmanuel   De NeveDoctor Jan-Emmanuel De Neve
    Disagree
    For the reasons outlined before, on balance, a flatter organization is likely to be associated with higher wellbeing so the suggested policy would likely not raise wellbeing.

  •  Professor Bruno  FreyProfessor Bruno Frey
    Completely disagree
    Same as previous comment.

  •  Doctor Chris  Barrington-LeighDoctor Chris Barrington-Leigh
    Disagree
    This seems unlikely. The Whitehall stress study has been analyzed for psychiatric outcomes along with many others. While conclusions are a bit more subtle than just thinking about "more hierarchical" (eg. Effort-reward imbalance is a problem), having control over what you do at work is good for general/life outcomes. In addition, pay discrepancies may be linked with management hierarchies; incentivizing horizontal organizations might reduce pay inequities, which have a sketchy or indirect link to lower life satisfaction at the population level. If sense of belonging to one's workplace enterprise is also stronger in more horizontal structures, which seems likely, then this positive identity would also be a strong supporter of higher life satisfaction.

  •  Professor Stefano  BartoliniProfessor Stefano Bartolini
    Completely disagree
    For the reasons I mentioned before, incentives should be provided to the develop flat organizations, rather than hierarchical.

  •  Professor Jan  DelheyProfessor Jan Delhey
    Disagree
    I don't think that naturally hierachical organization improve the wellbeing of employees.

  •  Professor Conchita  D'AmbrosioProfessor Conchita D'Ambrosio
    Neither agree nor disagree
    None

  •  Professor Alois  StutzerProfessor Alois Stutzer
    Disagree
    We lack to a large extent a good understanding about how organizational structures are related to people's subjective well-being, for example, in terms of their life satisfaction.

  •  Doctor Esteban  CalvoDoctor Esteban Calvo
    Disagree
    IfIf improving subjective well-being were so mechanical as tilting the tax and subsidy mix in favor of more hierarchical organizations (in a revenue neutral manner), we would all be very happy.

  •  Professor Felicia  HuppertProfessor Felicia Huppert
    Completely disagree
    If we really want to improve the well-being of employees, policies which encourage the implementation of research findings from positive organisational psychology on how to improve organisational culture and leadership, are likely to be far more effective than any changes to organisational structures, whether through taxes and subsidies or other means.