What is a Hierarchy Chart?

A hierarchy chart, also known as a hierarchical structure, is a system where individuals are “ranked” according to their job roles and status. It’s essential for clarifying the organizational structure since it depicts the lines of authority and responsibility in an organization.

In this article, we will discuss the advantages of employing a hierarchy chart and provide a step-by-step guide for developing one for your organization to enhance efficiency and communication.

How To Create a Hierarchy Chart?

While there is no right or wrong way to do it, creating a hierarchy chart starts with devising a good plan. Here are four key steps we think are crucial, but you can include as many as you need to get the result you’re looking for.

Identify a Starting Point

Start by identifying the most significant person. This is easy because more often than not, this person will be the CEO or other organizational leader. In other words, the “highest-ranking” individual within the organization. 

List Other Roles in Order of Importance

Once you’ve got the person at the top, work your way downwards. In bigger organizations, the next “layer” after the CEO will be other c-level executives (i.e., COO, CFO, CTO), then regional or department heads (i.e., sales, marketing, research & development, customer experience), then managers and supervisors within these departments, then, finally, your “regular” frontline employees who keep the wheels turning. 

Link Things Together

As you put together your core hierarchy, remember to link them together by vertical drawing lines (i.e., the reporting relationships) that flow upwards between individual employees. These lines should go from the employee to their supervisor, then from their supervisor to their supervisor’s supervisor, and so on, until the line gets back to the CEO. Employees that are “equal” to one another can be joined together by a horizontal line rather than a vertical one. 

Add Additional Information

When you’ve got the core structure down, you can start by adding additional information such as pictures, job roles, email addresses, phone numbers, specialist skill sets, hobbies and interests, core working hours… what you include is up to you.

Begin Building Your Hierarchy Chart

As for executing your plan and building an actual chart, there are a few different ways that you can achieve this. You can do it the “old-fashioned” way by building it by hand in a word processor (or if you want to be really old-fashioned, by putting pen to paper).

We don’t recommend doing this, though. It takes a long time, it’s outdated, and by the time you’ve finished, your org chart will be too.

Instead, we recommend using a modern org chart tool to build your hierarchy chart. This is not only much faster and easier but thanks to third-party integrations it will always be kept up-to-date automatically. Oh, and a virtual org chart is much more likely to actually be used by your employees because, let’s be honest, nobody’s going to go searching your corporate drive for a Word file!

What is a Hierarchy Chart Used For [& What are the Benefits]?

Not all hierarchy charts are the same, and not every organization uses them in the same way. Here are a few use cases to give you an idea of how modern hierarchy charts, and org charts in general, can be used by an organization to benefit it:

Onboarding New Employees

Onboarding new hires can be a painful experience for all involved. It’s more often than not very slow and inefficient, and it can create more questions than it answers.

The truth is that learning your way around a new job is difficult, and this is compounded by the need to learn people, their names, faces, job roles, and where they fit in with a new employee’s day-to-day. Being introduced to dozens of people each day can therefore quickly overwhelm and frustrate a new hire.

This is where a hierarchy chart comes in—it can be used to show new employees all of this information and more, including where they fit into the company, making it one of the most valuable and common use cases for org charts.

With just a few taps, an employee is able to find out who anybody within the organization is and what their job role and responsibilities are, among other things, making it far easier for a new hire to find and communicate with the right people at the right time. A hierarchy chart is also great for helping new hires put names to faces, something which we all need a little help with from time to time!

Keeping Remote Employees Informed & On Track

Keeping remote employees engaged was a challenge for organizations even before the days of COVID-19. And given that it’s a trend likely to continue well into the future, organizations need to get to grips with keeping things running smoothly for those that opt to continue to work outside of the office.

One of the biggest challenges faced by firms with remote workers is keeping these and office-based employees connected and collaborating.

A hierarchy chart is one way that organizations can bring dispersed teams closer together, however, because every employee has details about their co-workers to hand when they need it. This means that they can quickly find who they’re looking for, their photos, profiles, details, and connect with them on a more personal level.

Employees are also far more likely to turn to a hierarchical org chart to find the information they need rather than ask around other co-workers via email and chat—it’s just so much easier for everyone involved.

Improving Strategic Planning & Efficiency

Hierarchy charts are great for the organizational planning process. There are many areas where this can be applied, such as to staffing (by helping to identify skills gaps) and organizational design (by helping to identify when a re-structure might be needed.)

In terms of operational efficiency, hierarchy charts promote this due to the way they help specialist expert workers with a niche skillset carry out their tasks more efficiently and confidently. This not only benefits the organization’s goals and bottom-line but also keeps employees motivated and encouraged to develop within because they know their work is contributing to the organization’s long-term success.

Hierarchy Chart Example

Below is a very basic example of a hierarchy chart built using Organimi’s org chart builder.

Typically, a hierarchy chart like the one below will be arranged in a pyramid-like shape, with the CEO/founder/chairman/other organizational leader sitting at the top. It will then cascade down to C-level executives, department heads, managers, supervisors, all the way to regular staff.

As you can see, this is the case with this org chart. Here, the person at the top (here, the CEO & Chairman) of the chart has overall control over the company. The org chart then splits off into different key areas (operations, finance) headed by a C-level executive, which are split off again into different departments and teams (sales, marketing) with their own managers, supervisors, and staff sitting at the “lower” end of the chart.

Even from this very limited representation of what a hierarchy chart can do, you begin to see how an organization’s structure can be visualized and the potential use cases for it.

Why Use an Org Chart Tool? 

When you use a modern org chart tool to build your hierarchy charts, the only limit to what you can do with it is your imagination.

The features and functions of a tool like Organimi take org chart building well past the basics, allowing you to use a dynamic, interactive tool alongside a range of features and integrations to create an accurate, real-time hierarchy chart that can be used to aid decision making and better the overall experience for your employees.

If you would like to try out Organimi for yourself, sign up for a free trial