Digital transformation is impacting the workplace in many ways. From the influence the gig economy model is having on the way the working relationships are structured to the significant role of big data and people analytics tools in supporting HR decision-making. This is motivating businesses to reflect on how they organise themselves and prompting them to make changes to their working structures and practices.
Innovative new working practices
A recent trend we have seen, in particular in product development, is the introduction of ‘scrum work’ as a new working practice. Scrum work refers to the creation of autonomous, flexible teams working without specific instructions or hierarchy. It often involves the formation of ‘squads’ which exist independently from the main business as autonomous teams. These squads pursue a given working target but without the business having control over how they achieve that target. Employees can frequently switch between squads at short notice with a consequent change in working conditions and requirements. An employee might be required to work in a different location or remotely, with different working hours and in a different language.
One of the HR challenges with scrum work is how to put in place effective employee incentive arrangements. The scrum structure can make it very difficult to assess an individual employee’s performance within the squad. In order to operate effectively by reference to this new structure, incentive bonuses would need to be based on team performance rather than the individual one. This may require current incentive arrangements to be amended or new arrangements to be put in place. Another HR challenge is the extent to which frequent changes to working conditions require employee consent or engagement with employee representatives.
New working structures and reporting lines
As part of its digital transformation, a business may undertake a reorganisation of its working structures. This could involve replacing a traditional organisation structure with a matrix structure or putting in place a parallel reporting structure (e.g. related to a new working practice such as scrum working) alongside a more traditional reporting structure. In the new structure, an employee may have solid and dotted reporting lines to different parts of the business. This may include one reporting line to the manager in charge of HR matters (holiday approvals, appraisals, disciplinary matters) and other reporting lines to managers responsible for their day to day activities. This may also involve the employee reporting to a different office, country or entity. Businesses need to understand to what extent they need to seek employee consent or engage with employee representatives in relation to this type of reorganisation. They also need to consider whether the analysis is affected by the way in which the reporting lines are structured. Does it make a difference if certain HR-related powers are reserved to a manager within a traditional reporting structure whilst only operational management is moved to a parallel structure?
The introduction of complex IT systems and AI tools to be used by businesses and their employees often allows the employer to monitor the activities and performance of individual employees in a way which was not previously possible. This generally give rise to data protection issues and could potentially require the employer to seek the consent of the employee and to consult with employee representatives before the introduction of these systems or tools.