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Open allocation refers to a style of management in which employees are given a high degree of freedom in choosing what projects to work on, and how to allocate their time. They do not necessarily answer to a single manager, but to the company and their peers. They can transfer between projects regardless of headcount allowances, performance reviews, or tenure at the company, as long as they are providing value to projects that are useful to the business goals of the company. [1] Open allocation has been described as a process of self-organization. Rather than teams and leadership arrangements existing permanently in a company, such relationships form as they are needed (around important projects) and disband when they are no longer necessary. Additionally, open allocation implies that projects are not unilaterally created and staffed by executive mandate. Rather, the person forming the project (who might not be an official manager) is responsible for convincing others to invest their time, energy, and careers into the effort.
The term lattice organization for an organization using open allocation was coined by Bill Gore in 1967. He used the term to describe the company he founded, W. L. Gore and Associates.
Google introduced and publicised an unusual perk known as 20% time, in which - in theory - employees have freedom over one-fifth of their working time, which may be put into a personal project or a high-priority internal effort outside of management's direction. However, the other 80% of the time employees would be still working under closed allocation, and also may not in practice be able to use their 20% time all of the time, for example due to deadline pressures.
While startups vary wildly in work environment quality and employee autonomy, one of the main selling points of technology startups in the early 21st century has been a claim - demonstrably true of the best startups, but not of all of them - that employees enjoy a high level of autonomy, at a level traditionally only seen in basic research labs. [2]
GitHub and Valve, in the early 2010s, became well known for having such environments. In 2013, Tom Preston-Werner gave a talk at Oscon in which he spoke about the importance of open allocation to GitHub's success.
Organizations using open allocation do not give middle managers unilateral control over their reports' work. People management, product direction, and project-specific leadership are, in this way, decoupled. One argument in favor of this is that when the people defining projects no longer have the unilateral ability to terminate employees or deprive them of opportunity, better projects and leaders (those that can convince, rather than coerce) will emerge. Middle management may play roles, however, in mentoring, handling of conflict (as an absolute last line of dispute resolution), and (especially) ensuring that new hires are appropriately "onboarded" into the open allocation system.
Leadership in an open-allocation organization is typically organic; the person to propose the project will lead it, if he or she can convince others to follow. [1] [3] When projects end, the leaders may rotate back into being "followers", and there is no stigma attached to this. [4] Leading and following are temporary distinctions and largely by choice; one may choose to follow in order to learn more about a different part of the business, for example. Ideally, the leader for each project will be the most committed, capable or passionate person involved, and companywide rank (which may not exist at all) has little to no bearing on the selection.
Performance reviews in open allocation companies are handled in a variety of ways. Valve uses stack ranking driven by peer review to determine raises and bonuses, but unlike the hated stack-ranking regimes of some other technology companies, these do not initiate termination or interfere with internal mobility, but are strictly used to determine compensation. [5]
Because open allocation is an unusual organizational style, it can be at odds with external demands on an organization. For example, consulting companies that promise a certain number of staff will work on a project must assign work to people in order to meet those commitments. Additionally, regulatory pressures such as Sarbanes-Oxley may require that people are assigned to certain duties.
Additionally, open allocation's strongest successes are in businesses in the areas of science, technology, and in particular, software - the most successful of which are typically staffed by highly competent and educated people. Whether the successes of open allocation apply more generally to other types of organizations is an open question.
Finally, terminating employees in an open-allocation environment can be challenging, because establishing a performance-based case in such a flexible environment is difficult.[ citation needed ] While open allocation generally creates fewer of the "unlucky" low-performers who landed on the poorly-fitting projects or with incompatible managers, and therefore tends to reduce turnover (voluntary and involuntary) dramatically, it doesn't provide a mechanism for getting rid of severe under- or non-performers who "hide" in the organization. This has not been an issue to this point, if only because the companies using open allocation have been highly selective ones that can hire people with strong track records. Furthermore, the increase in performance among high performers under open allocation is typically so dramatic as to counteract any risk of decline among the lower performers.[ citation needed ]
Organization | Industry | Type | Number of employees | Used open allocation |
---|---|---|---|---|
Valve [1] | Video games | Private company | 400 [1] | 1996 (founding year) - date [5] |
GitHub [1] | Technology | Private company | 175 [1] | 2008 (founding year) - 2014 [6] |
Treehouse [7] | Technology | Private company | 60 | June 20, 2013 - date [8] |
W. L. Gore and Associates | Manufacturing | Private company | 9,840 [9] | 1958 (founding year) - date [10] |
Monk Development [11] | Software as a Service | Private company | 25-30 | 2013 - date |
Targetprocess [12] | Software as a Service | Private company | 110 | 2016 - date |
At Valve, employees' desks have wheels under them, allowing them to move to another team with ease - a symbolic as well as practical marker of Valve's open allocation approach - and physically reorganize as their projects demand. [5]
Many GitHub employees are remote workers, so team membership is to some extent determined by which chat rooms an employee is in. [1]
Treehouse allows any team member to switch teams at any time, but says that it is "not cool" to leave a team at a critical time or when you are needed by your team-mates, and such an action would be reflected in poor performance reviews. [7]
A startup or start-up is a company or project undertaken by an entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship refers to all new businesses, including self-employment and businesses that never intend to become registered, startups refer to new businesses that intend to grow large beyond the solo founder. At the beginning, startups face high uncertainty and have high rates of failure, but a minority of them do go on to be successful and influential.
Collaborative writing, or collabwriting is a method of group work that takes place in the workplace and in the classroom. Researchers expand the idea of collaborative writing beyond groups working together to complete a writing task. Collaboration can be defined as individuals communicating, whether orally or in written form, to plan, draft, and revise a document. The success of collaboration in group work is often incumbent upon a group's agreed upon plan of action. At times, success in collaborative writing is hindered by a group's failure to adequately communicate their desired strategies.
A performance appraisal, also referred to as a performance review, performance evaluation, (career) development discussion, or employee appraisal, sometimes shortened to "PA", is a periodic and systematic process whereby the job performance of an employee is documented and evaluated. This is done after employees are trained about work and settle into their jobs. Performance appraisals are a part of career development and consist of regular reviews of employee performance within organizations.
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An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims.
The Quake engine is the game engine developed by id Software to power their 1996 video game Quake. It featured true 3D real-time rendering and is now licensed under the terms of GNU General Public License v2.0 or later.
Management consists of the planning, prioritizing, and organizing work efforts to accomplish objectives within a business organization. A management style is the particular way managers go about accomplishing these objectives. It encompasses the way they make decisions, how they plan and organize work, and how they exercise authority.
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Within organizations people often have to make decisions about whether to speak up or remain silent - whether to share or withhold their ideas, opinions, and concerns ... [The problem is that] in many cases, they choose the safe response of silence, withholding input that could be valuable to others or thoughts that they wish they could express.
— Frances J. Milliken and Elizabeth Wolfe Morrison, Shades of Silence: Emerging Themes and Future Directions for Research on Silence in Organizations
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