FLATTER organisational structures are supposed to increase the motivation of junior staff, so it is perhaps surprising to find that the introduction of schemes designed to bring about these supposedly more responsive and dynamic businesses is hitting employee morale.

However, if research by Roffey Park Management Institute is to be believed, the situation is not so odd. A study published last week has found that many British companies have still not developed reward schemes that link pay and benefits to a team's performance and their contribution to the new flatter structure's corporate values. Instead, they prefer to pay market rates, reward individual short-term performance rather than long- term development, and recognise those who assume new management responsibilities rather than gain further specialities.

One of the most obvious ways in which organisations send the wrong signals, says Linda Holbeche, director of research at West Sussex-based Roffey Park, is in, say, rewarding high sales but failing to recognise the efforts of support teams, despite the fact the encouraging extra sales means more work for them, too.

Ms Holbeche, author of the study Career Development in Flatter Structures, says: "Delayered organisations lack the managerial tiers of hierarchical organisations. Therefore, people will be likely to spend longer in the same role. This has spawned a new 'psychological contract' between organisations and employees, which focuses on en- hancing employability through increased skills development and greater responsibility, rather than a guarantee of job stability."

As a result, there is a challenge for human resources specialists to design reward and recognition schemes that encourage such development.