Is your hierarchy a ladder or pyramid?

A hierarchy’s perceived shape determines the quality of employee relationships and performance in groups

One of the defining characteristics of almost every corporate organization is the existence of a hierarchy. For all the discussions about “flat” organizations since the idea first appeared in 1950, the reality is that most companies operate with some sort of hierarchical structure. Depending on the company, the hierarchy may be a positive structure that allows the company to fulfill its mission or it may be a negative structure that enables bureaucracy and disables innovation.

Given the impact that hierarchies have on company performance, this topic has received extensive study and analysis from researchers, consultants and executives. Generally speaking, that body of work has looked at the operational mechanics and implications of specific hierarchical forms. The emphasis has mostly been on understanding how specific hierarchic structures impact workers and companies for better or worse. A paper from Siyu Yu (Rice), Lindred L. Greer (Michigan), Nir Halevy (Stanford),  and Lisanne van Bunderen (Amsterdam) adds to this extensive body of work with a novel analysis of a topic previously ignored: the impact that hierarchy visualization has on its members. The critical question: does a hierarchy’s perceived “shape” affect employee behavior and overall organizational performance?

For their study, the authors focused primarily on two hierarchy shapes: ladders and pyramids. The authors note that individuals commonly use ladder shapes to “mentally represent hierarchical distributions that come with (a) salient vertical categorical distinctions between members in different ranks, (b) a narrow base and a relatively equally narrow top, and (c) in its most extreme form, a group structure in which each group member occupies a distinct rank in the hierarchy.” In contrast, individuals commonly use pyramid shapes “to mentally represent hierarchical distributions in which (a) few group members control most of the group’s resources, (b) the lower ranks form a wider base and the higher ranks form a narrower top, and (c) in its extreme form, a group structure in which a single individual occupies the highest and all the other group members occupy the lowest rank in the hierarchy.”

These two shapes are important because they illustrate important features of hierarchies gleaned from past research: stratification and centralization. A ladder represents a hierarchy that is most effective when each member of the group has a distinct rank relative to other members. A pyramid represents a hierarchy whose maximum value is reached when one member has the highest rank and most other members share a lower position. The shapes are also important because of a concept known as the “principle of construal,” which stipulates that people’s interpretation of the circumstances around them has a direct and material impact on how they think and behave. In other words, we adjust our thoughts and actions to fit the world around us as we imagine it; therefore, how we imagine our organization’s hierarchy works affects how we think and act inside of it. 

The Studies

The authors conducted a series of studies to discover the impact that hierarchy shape visualization has on its members. In the first study, 345 working adults in the U.S. were recruited and randomly assigned to one of three groups (ladder, pyramid, or control). In all three groups, participants were asked to choose which of four shapes captured how they think about the concept of “group hierarchy.” The options were: “pyramid,” “ladder,” “circle,” and “square.” The circle and square options were added, the authors note, "based on previous research that utilized them to visually represent equality and a highly steep hierarchy respectively."

All participants learned about an organizational model in which employees can potentially occupy one of five different ranks. In the ladder group, each employee occupied a different rank. In the pyramid group, one person occupied the top rank and the remaining four occupied the bottom rank. Participants in both the ladder and pyramid conditions then chose which of the four shapes best captured the kind of hierarchy presented to them.

As expected, most participants chose either “pyramid” (69.44%) or “ladder” (26.39%), and only a few chose “circle” (2.78%,) or “square” (1.39%), suggesting that pyramid and ladder shapes "are indeed the two most common mental representations people have of group hierarchy." 

In the second study, 380 working adults saw two figures (reproduced in Figure 1 below), one representing a ladder and the other representing a pyramid. They then indicated how similar the structure of their own work environment was to each of the two shapes using scales ranging from 1 (“not at all similar”) to 7 (“very similar”). The participants then completed a survey that looked at a variety of characteristics that define the quality of social relationships at work.

Figure 1. Illustration of ladder and pyramid used in Study 2. (Source: Authors)

From the survey data, the authors found that employees whose work hierarchy resembled a ladder experienced more conflict at work and had lower quality social relationships overall. As the authors explained in a summary of their paper:

Subjects who perceived their working group as a ladder, the researchers found, were more likely to compare their rank and station with others. Their relationships were also weaker: when asked whether they trusted their team members, most subjects disagreed or strongly disagreed. When asked whether they thought about if they were better or worse than their colleagues, they agreed and strongly agreed. These comparisons and lack of trust indirectly correlated with lower performance levels, the research showed.

Surprisingly, the authors did not find these negative effects for employees who perceived their hierarchy as similar to a pyramid. The authors hypothesize that one possibility that explains this difference is that, "because hierarchies can have both positive and negative effects, these opposite effects may have counteracted one another in pyramids, resulting in an overall null association between pyramids (but not in ladders, in which the negative effects plausibly outweigh the positive effects).

Building on the findings of Studies 1 and 2, Study 3 explored how mental representations of pyramids or ladders affect social comparisons with other employees and, again, relationship quality. In this study, the authors looked at 221 work groups from two Dutch financial services firms (1,717 employees in total). Relationship and social comparisons were reported directly by group members. Group performance was rated by managers. The authors themselves defined the shape of each group’s hierarchy based on rank distribution within each group.¹

In Study 3, the authors found that "the more work groups’ hierarchical structure was shaped like a ladder, the worse the relationships employees experienced—the less group members trusted each other and the more they compared themselves with one another. Moreover, such ladder-shaped hierarchies "diminished team performance indirectly, via heightened intragroup social comparisons." Unlike Study 2, which did not find a positive effect of pyramids, "Study 3 found that pyramids positively predicted relationship quality and negatively predicted team members’ propensity to engage in social comparisons."

The general findings of the first three studies were supported by two additional studies in which participants joined one of two fictional startups, each with a different hierarchical model. Studies 4 and 5 "demonstrated a causal effect, whereby a ladder enhances group members’ propensity to engage in intragroup social comparisons, thereby undermining the relationship quality within the group." 

Conclusions

Across all the studies, the authors found that the perceived shape of the hierarchy in which employees operated had a significant impact on how they behaved at work and on overall organizational performance. As the authors note: "Our findings consistently show that, relative to pyramids, hierarchies that individuals perceive to be shaped like ladders stir social comparisons within groups, thereby undermining relationship quality and group performance."

In their discussion of why ladders and pyramids have such different outcomes, the authors reach the following conclusion:

Compared with pyramids, the rank differentiation in ladders highlights rank differences between members within the group, thereby promoting intragroup social comparison propensity, and degrading intragroup relationship quality and group performance. 

This conclusion suggests that the functions and dysfunctions of hierarchy may depend on the hierarchy’s actual and perceived shape. Therefore, paying attention to how workers perceive and experience their hierarchical environment can shed light on why and how hierarchy impacts group processes and organizational outcomes. This impact is present whether the visualizations reflect an actual company or someone’s perception of that structure. “It can be created by both perception and actual rank, for example, job titles,” one paper author said in an interview. “So, as a practical implication, companies should think about ways to reduce the ladder system, such as with a promotion system that seems more like a pyramid, or by creating the mutual belief that upward mobility within the company is not a ladder or zero-sum.”

As noted earlier, this is the first study to look at hierarchy form effect on employee behavior, and the authors are careful to note the implications of their preliminary analysis. For example, "although we found that ladders negatively influence group processes and outcomes, it is possible that certain features of individuals and groups may lessen or even reverse the harmful effects of ladders." Relatedly, "the negative effects of ladders may be attenuated depending on where one is in the hierarchy, with those at the very top or bottom ranks experiencing the most intense negative effects of hierarchical shapes." Additionally, it is not clear what happens when different group members mentally represent the hierarchy similarly vs. differently on group processes and performance. Lastly, this paper does not consider how shape perception, or its impact, might vary across countries and cultures. For example, "in interdependent cultures where harmonious relationships are emphasized, the negative effects of ladders on relationship quality might be reduced."

Despite its limitations, this paper suggests strongly that managers, consultants, and researchers should pay especially close attention to group dynamics in groups whose members see their organizations as ladders more than pyramids. The authors note that this advice does not mean that ladders should be avoided at all costs; rather, "we encourage practitioners to consciously weigh the extent to which the benefits that come from a stratified incentive structure outweigh the potential costs that accrue when group members perceive their hierarchy as a ladder."

At the highest level, this set of studies reinforces our understanding of the power that employees' mental representations of their environment have on their thoughts and actions. It makes intuitive sense to think that the way in which we see the world around us can profoundly impact how we behave in it. Decades of research in psychology, economics, and neuroscience support that view. This paper reminds us that we often use shapes and patterns to make sense of our environment. In a world where most of us work in some sort of hierarchy, the shape we assign to it mentally may prove to be a powerful determinant of our individual behavior and collective experience. 

1. Information on the shape of each group’s hierarchy for both samples was based on employees’ organizational rank (Sample 1: 1 = lowest, 10 = highest, based on formal rank; Sample 2: 1 = lowest, 15 = highest, based on salary scale), obtained from company human resource (HR) records.

---

The Research

Yu S, Greer LL, Halevy N, van Bunderen L. On Ladders and Pyramids: Hierarchy’s Shape Determines Relationships and Performance in Groups. Personality and Social Psychology Bulletin. 2019;45(12):1717-1733. doi:10.1177/0146167219842867