Jason Fried on 37signals on why he runs a flat company:
… rewarding high performers with managerial responsibilities… often drives people further away from the job they are actually good at
The classic corporate structure does not encourage people to continue to do things that they’re good at doing. If you’re a teacher in Singapore and if you harbour any thoughts of advancing your pay or career, you’d need to think about teaching less and taking on more responsibilities, such as becoming a subject head, a head of department, or even a principal. Being a very good teacher just won’t cut it.