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Guidelines For Managing Employees In A Matrix Organization Structure

By Michael VanBruaene, Big4.com Guest Blogger

Some form of matrix organizational structure is the norm in many organizations.  It’s generally a blend of a formal long term structure (usually hierarchical) and temporary functional work teams comprised of employees with respective specializations from various organizational departments.  They focus on a specific project, with a specific scope of work, objectives and time frame. You can also see it in organizations with work groups that continually form to work on a specific project and disband upon its completion; with employees then returning to a work group that is their “home group” and whose existence is more long term.

In a matrix structure employees typically have a functional manager to whom they formally report, who has a similar technical expertise and provides an organizational home.  This this is the manager who probably conducted the employment interview and is responsible for conducting performance reviews and generally handling human resource type matters with the employee.  Some of the employee’s work occurs within this functional organization unit and this manager will oversee the work and evaluate the employee’s performance.  Employees are also assigned to work teams outside this department for a specific and relatively temporary project.  These work teams are comprised of employees with diverse expertise who have joined the team because of the specific contribution they can make with their expertise.

Challenges With Matrix Organizations

Matrix structures are advantageous for flexibly applying organization talent where it’s needed.  However, there are challenges that need to be monitored and addressed.

Role and responsibility confusion.  Employees can become confused about their roles and responsibilities as they are moved from one work group to another, with their role within the respective work groups also changing; particularly when they are required to perform work outside their technical specialty.

Conflicting loyalties to more than one manager.  As they work for multiple managers, functional and project specific, employees may develop loyalties to more than one manager; and that will vary in intensity and type among functional and work team managers.  Loyalty to managers is an important element for employee retention and productivity and should be encouraged and allowed to occur.  However, management should ensure that employees are not in a position in which their loyalty to one manager comes into conflict with loyalty to another manager.

Project status is not effectively monitored.  Current and accurate information about work team and project status should be readily available, as this supports the efficient and productive deployment of employees.

Employee status and availability is not readily known.  Without valid and current data on employee and project status, project and functional managers may be not aware of employee availability causing them to search the organization for appropriate expertise for their work effort.

Employee experience and expertise may not be readily known.  Potential project managers, and even functional managers, may be unaware of work tasks and projects on which employees have worked, and thus their ability to make a contribution on work assignments.  Also, this lack of knowledge regarding in-house work experience could impact how the employee’s performance is reviewed by a functional manager.

Employee work performance, bad and good, is not well known.  If there is inadequate information and weak communication between functional and project managers employee work performance will be inadequately known.

Overhead related costs are too high.  Matrix organizations may tend to have more managers than formal hierarchical structures.  Consequently, costs associated with manager positions may be higher.  These higher costs, which could be very minimal and should be offset by higher levels of productivity and getting the job done.

Maximizing Advantages and Overcoming Disadvantages

Matrix structures can support fully engaged employees doing work that is meaningful and fulfilling.  And in turn, as many studies have found, your organization’s bottom line and viability is positively impacted.

To be fully successful the following organizational elements should be in place in a matrix organization structure.

  • Support from top management
  • Well defined and communicated organization goals, objectives, and mission
  • Cooperation and communication between functional and work team managers
  • HR information system that is current and accurate
  • Project management support information system that is current and accurate
  • Documented roles and responsibilities
  • Effective project management
  • Communication that is transparent to managers and employees
  • Continuing education – technical and how to work in fluid work environments
  • Regular status meetings with functional managers
  • Conflict among managers should be minimized or at least kept out of view
  • Annual performance reviews

Support from top management.  Your organization’s top executives must ensure that all organizational functions support managers and employees in their work efforts and that all managers cooperate with and support each other.

Well defined and communicated organization goals, objectives, and mission.  It’s important to keep everyone focused on the big picture, rather than more narrow self-interests that may impede cooperation within the organization and minimizing any silo mentalities.  This is particularly important with a matrix structure that requires a lot of cooperation and communication among executives, managers and employees.  Continually, top management must communicate, in words and actions, organization goals, objectives and mission, i.e. the big picture.

Cooperation and communication between functional and work team managers.  This is critical.  There must be formal mechanisms in place so that managers (functional and work team) can obtain information regarding employee performance for performance evaluations, promotion, compensation decisions, continuing education and work assignments.

There must also be cooperation and flexibility among the managers in the “give and take” required to share employees.

HR information system that is current and accurate.  You should have a HR information system that provides current employee status, ideally daily or weekly, of their work activity, e.g. specific projects or work teams, anticipated availability, and skill sets.

This information system should also support the tracking of employee participation in work groups so that their performance managers and work team managers know their experience and work history.  This information should also support oppportunities for advancement, recognition, regular compensation and bonuses

Project management support information system that is current and accurate.  Work team projects, to be fully effective and efficient, and make effective and efficient use of employee specialists, require project management support systems that provide work team managers with accurate and current information such as hours worked to-date and costs by employee and the overall team, efficiency ratio’s, status vis-à-vis milestones, and budget expenditures and budget remaining to-date.  This information should be available to all managers and also team members (possibly summarized).

Documented roles and responsibilities.  It’s important that employees have job descriptions that state their responsibilities and roles.  Care should be taken so that these descriptions are not too narrow so that they limit opportunities to provide meaningful participation on work teams and advance their experience and careers.  Also, they should not be too broad which could result in confusion as to employee responsibilities and authority and also result in their assignment to project that are not a good fit.  You may want to describe two to five typical and fundamental employee tasks or work assignments as part of the job description.

Effective project management.  Work team and functional managers should be very effective at managing projects.  They should employ formal project methodologies appropriate to the work and projects at-hand.  This expertise can significantly contribute to fulfilling work experiences by team members, and result in effective and efficient projects that are on-time and on-budget.  Being on successful projects and having a meaningful role will contribute to employee retention and a positive work environment.

Communication that is transparent to managers and employees.  Communications regarding work and project status, forming and disbanding of teams, team success (or lack thereof), work activities should be transparent, other than those communications related to confidential HR matters.

Continuing education – technical and how to work in fluid work environments.  In additional to technical education your employees should have the skills to work in matrix work environments.  These work environments normally embody fluid work assignments and responsibilities, relatively ambiguous roles and interaction with employees who, due to their respective technical expertise, have different approaches to analyzing and resolving problems and project requirements.  It’s important that employees know how to navigate this environment and have education on how to adjust to, and master, fluid environments and working with employees with differing perspectives and personalities.

This ability and relevant education also applies to managers in their respective roles.

Regular status meetings with functional managers.  Employees should have regularly scheduled meetings, e.g. monthly or quarterly, to review their current projects and status and HR related issues; and to address any difficulties they may be facing.  These meetings can be very important when employees are fully engaged on work teams with a relatively long term project; as this may be the only opportunity for the functional manager and employee to meet.

Conflict among managers should be minimized or at least kept out of view. Top level management should make sure that this occurs.  Conflict is inevitable and it’s important to manage it so that it does not interfere with employee and work team performance.  Too much and visible conflict can cause employee uncertainty and compel them to take sides in these conflicts.

Annual performance reviews.  Annual, or ideally semi-annual, performance reviews are important regardless of the organization structure.  They are particularly important in fluid matrix structures in which there may not be substantial contact between employees and their functional manager.  These meetings should also compel the functional/performance review manager to obtain all relevant information on the employee’s role, experience and performance on work teams.

Michael VanBruaene was a KPMG Director and blogs at www.AdvancingYourOrganization.com.  Practical Tools To Improve Organization Performance

One Response to Guidelines For Managing Employees In A Matrix Organization Structure


  1. Kevan Hall says:

    Thanks for a very thorough post on the subject, good stuff

    You quite rightly focus on creating clarity and defining roles but in a matrix not everything can be clear. If we could have precisely defined goals and roles. We wouldn’t really need a matrix, we could just cascade down from the top.

    It’s important to be clear where we can, but it is equally important to develop the capability for coping with high levels of ambiguity and change in the matrix.

    Constant RACI analysis and escalations for clarity can cripple a matrix. We need to give our people the capability and confidence to manage ambiguity and to cope with lower levels of certainty that they were used in the past.

    If employees want high levels of certainty and clarity, they may not be the right people for matrix working.