The document summarizes an organizational restructuring engagement at a 200-employee services firm. It describes high turnover rates preventing growth. The consultant conducted mapping to identify turnover drivers, benchmarked industry rates, and recommended changes like flatter structure, shared goals, and performance-based rewards. Implementation of recommendations lowered turnover significantly from 34.6% to 14.2% in a year. Financial metrics like profit margin and growth also improved.

1. Organizational Restructuring:
The Case of Control vs
Commitment
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2. Case Overview
 Client is a ~200 employee services firm in an industry
with excellent growth potential
 Industry trends in their service business lines are upwards
and expected to continue growing in the next 3 years
 Management perceived that high turnover, employee lack
of commitment and low motivation was preventing them
from capitalizing on the high
earnings potential and
current uptrends in their
business lines
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3. Objective
 The objective of the engagement was to determine
typical industry turnover rates as a benchmark
 Determine specific drivers for employee turnover
 Suggest approaches to
increase employee
motivation and
commitment
 Minimize employee
turnover
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4. Approach
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Organizational Mapping
 Conduct a mapping
exercise for the entire
organization to establish
a baseline, understand
the company’s culture,
understand employee
concerns and other
turnover drivers

5. Results:
 Industry turnover rates for the region were found to be
16.5%. Organization’s turnover rates were 34.6%
 Organizational mapping results pointed at 7 important
factors to conform the scorecard focus of the engagement:
1. Job Design
2. Performance Expectations
3. Management Organization
4. Reward Policies
5. Communications and Open Door Policies
6. Employee – Manager Relationship
7. Overall Company’s Philosophy
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6. Baseline Scores
The baseline evaluation gave the following results:
 Job Design:
 Individual attention limited to performing individual
job
 Specific job description
 Fragmented work and fragmented thinking
 Specific tasks assigned
 Accountability focused on individual
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7. Baseline Scores
 Performance Expectations
 Fixed job definition
 Measured standards to define minimum performance
 Desirable stability
 Management Organization
 Layered structure from top down
 Coordination and control rely on rules and procedures
 Emphasis on positional authority
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8. Baseline Scores
 Reward Policies
 Status symbols distributed to reinforce hierarchy (VP’s)
 Individual pay geared to job evaluation
 Concentration in hourly payroll
 Communications & Open Door Policies
 Employee opinions allowed on relatively narrow agenda
 Employee sees risks associated with expressing
opinions openly
 Business data concealed
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9. Baseline Scores
 Employee – Manager relationship
 Business information distributed on strictly “need to
know” basis
 Overall Company Philosophy
 Management philosophy emphasizes management
prerogatives and obligations to shareholders
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10. Recommended KPIs
We recommended the following changes to address
senior management concerns for each KPI
 Job Design:
 Individual responsibility should be extended upstream
and downstream to improve team performance
 Job descriptions should emphasize each department
and division as a whole performance unit
 Individual accountability should emphasize combined
thinking and overlap individual responsibilities
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11. Recommended KPIs
 Performance Expectations
 Flexible definition of duties, contingent on changing
conditions
 Emphasis placed on higher “stretch” objectives
 Dynamic & market oriented
 Management Organization
 Restructure into flat/semi-flat organization structure
with mutual influence systems
 Coordination and control based on shared goals, values
and traditions
 Emphasis on problem-solving, relevant information
and expertise
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12. Recommended KPIs
 Reward Policies
 Minimize pay differences among similarly skilled
personnel
 Create performance related rewards to create equity
and reinforce department/division achievements
 Communications & Open Door Policies
 Encourage employee participation on all department
and division issues and concerns
 Institute transparency policies, share business and
financial performance information
 Encourage participation in company policy decision
making
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13. Recommended KPIs
 Employee – Manager relationship
 Encourage managers to conduct joint planning and
problem solving meetings
 Institute at all possible shared and/or combined
definition of roles
 Overall Company Philosophy
 Recommended to Senior Management to include
importance of stakeholders, and not focus only on
shareholder interests
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14. Implementation Results
 With our help, senior management implemented most
recommendations.
 KPIs were utilized to track and document progress
 KPIs were also utilized to adjust strategic and tactical
initiatives
 Employee turnover 6 months after rollout was reported at
20.0%
 Employee turnover 1 year after rollout was reported at
14.2%
 Financial KPIs also showed increases (Net Profit Margin
increased 4%; Avg Growth Rate increased 9% over TTMs)
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