Enterprise Organization Structures vs Job Structures: Why Both Matter for Strategic HR
Estimated Reading Time: 6 minutes
If you’ve ever been asked to create an organization chart for your company, you probably turned to your HCM system, exported reporting lines, and generated a neat visual. Job done, right?
Not quite.
When leadership asks for an enterprise organization structure, what they often need is more than just “who reports to whom.” They want clarity about why titles, responsibilities, and compensation are structured the way they are—and for that, you need a job structure.
Here’s the difference between the two, why it matters, and how HR leaders can use this opportunity to become a more strategic partner in the organization.
Building An Enterprise Organization Structure Vs. A Job Structure: What To Know
Before you can get to work building your charts, it’s important to know the difference between these two concepts and why both are important.
What Is an Enterprise Organization Structure?
An enterprise organization structure is a visual hierarchy of roles and reporting lines within a company. It typically answers:
Why it’s useful:
Why it falls short:
Creating one is easy. But when executives ask for context behind titles and compensation, it’s not enough.
There are different ways to chart organization structures, but a simple example may look like this:
A more complex chart may differentiate between departments, teams, and individual responsibilities.
Building an enterprise organization structure chart is a straightforward prospect.
Simply download the information from your company’s Human Capital Management (HCM) system and use the listed information to fill in the boxes on your hierarchy chart. There is very little strategic thinking involved; it’s more of a copy-and-paste task.
What Is a Job Structure?
A job structure focuses not on reporting lines, but on the relative value and responsibilities of each job. It builds a hierarchy based on:
Why it matters:
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Aligns pay with role complexity
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Helps explain compensation differences
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Supports career pathing and role design
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Prevents title inflation and pay inequity
Take the following job structure chart as an example:
In the organization structure, the Executive Assistant sits just below the CEO. This gives the impression that the Executive Assistant must be the second-most powerful person within the company.
If you look at the job structure, however, you’ll notice that the Executive Assistant actually falls into the same global grade tier as the Assistant Controller, HRIS Specialist, and Compensation Manager, who all fall much lower on the organization structure. That’s because the actual job duties of the Executive Assistant within this example company are more on par with those global grade 18 positions than with the top-level management positions of CFO and Chief HR Officer.
This kind of discrepancy can cause some friction when it comes to planning salaries for each position.
If an employee in one role wonders why someone else makes much more money despite appearing close together on the organization hierarchy, a job structure can explain which job roles are different and therefore contribute to a different level of compensation. This information can help HR and management have difficult conversations more easily and maintain a high level of pay transparency.
Creating a job structure might appear daunting, yet the enduring advantages surpass the time commitment by far.
Plus, as an HR professional, you’re well-equipped to track down (or research) the necessary information—such as job duties, management capacity, and comparable salaries—to place each job title in its proper tier. You’ll also be able to collaborate with leadership to validate your findings, which is helpful and rewarding on several fronts.
Need some help with organizational design? Turn to MorganHR.
Even if you research each job title and their roles, responsibilities, and compensation in the wider market, it isn’t always easy to assign them into a clear hierarchy. That’s where MorganHR consultants can help.
Our experts will guide you through the process of designing roles within your organization while sticking to best practices and encouraging the engagement of stakeholders. This will keep everyone—from entry level employees all the way up to the C-suite—on the same page. The end result will be a job structure that aids in decision-making for new positions, fosters career advancement, optimizes the organization’s size, and supports pay transparency and equity initiatives.
Reach out to MorganHR to speak with our team of expert consultants.
