HomeMy WebLinkAbout1819-2 Supervisory Topics - Span of Control (Final 2-1-19)rev3-14-19Supervisory Topics - Span of Control report #1819-2 February 2019
Supervisory Topics –
Span of Control
To request this information in an alternate format, please call (541) 330-4674 or send email to David.Givans@Deschutes.org
Deschutes County,
Oregon
David Givans, CPA, CIA, CGMA
Deschutes County Internal Auditor
PO Box 6005
1300 NW Wall St, Suite 200
Bend, OR 97708-6005
Audit committee:
Daryl Parrish, Chair - Public member
Tom Linhares - Public member
Lindsey Lombard – Public member
Wayne Yeatman - Public member
Patti Adair, County Commissioner
Nancy Blankenship, County Clerk
James Lewis, Property Management
Supervisory Topics - Span of Control report #1819-2 February 2019
TABLE OF
CONTENTS:
HIGHLIGHTS
1. INTRODUCTION
1.1. Background on Audit …………..……………………………………………………………. 1
1.2. Objectives and Scope ………………….……………………………………………….… 1-2
1.3. Methodology …………………………………….……………………………..…….……… 2-3
1.4. Background on Personnel ……………………………………………………………… 3-4
1.5. Background on Span of Control ……..……………………….…………………..… 5-9
2. SPAN OF CONTROL OBSERVATIONS
2.1. Average Span of Control Analyses and Organizational Layers …..… 9-11
2.2. Supervisor Span of Control ………………………………………………………... 11-13
2.3. Supervisor Demographics …………………………………………………………. 14-19
3. MANAGEMENT RESPONSE
Human Resources Department ………………………...…………………….......… 20-21
Supervisory Topics - Span of Control report #1819-2 February 2019
HIGHLIGHTS
Why this audit was
performed:
To analyze span of
control (management).
In the context of the
audit on supervisory
topics, the analysis of
span of control sets the
stage for the additional
work in assessing staff
development and
expectations for
supervisors.
What is
recommended
Recommendations
include:
• considering some
performance
measures for the
workforce on EEOP
and supervisory
topics, and
• integrating EEOP
recommendations
into recruitment and
promotion efforts.
Supervisory Topics - Span of Control
An organization structure is a means to an end and should help an organization achieve its
objectives. Span of control and layers of management are tools that can assist agencies in
assessing whether their organizational structures are conducive to effective and efficient
operations.
What was found
Average span of control is the number of employees divided by the total number of
supervisors. This in some measure reflects that all positions receive supervision. Average
span of control for the county indicated six (6) reports per supervisor. Departments’
average span of control varied from 2.5 to 13. This variability is expected as there is no
single benchmark for “optimal” span of control.
Various studies and reports by other jurisdictions indicate a best practice to examine lower
supervisor spans of control (those 3 or lower). Twenty-eight percent (28%) of County
supervisors have three or fewer direct reports. There are a number of factors that can go
into the span of control. Lower spans of control can result from smaller sized
department/offices; smaller programs or activities; and/or contracting out labor.
Supervisor demographics observations include:
• Supervisors represent 16% of the County’s workforce.
• Average age of staff and supervisors are 43.6 and 48.4, respectively.
• Female staff represent 55% of the workforce whereas female supervisors only
represent 33% of supervisors.
The County’s does not currently utilize any performance measures addressing diversity as
used in the County’s EEOP Plan.
Deschutes County Internal Audit
Supervisory Topics - Span of Control report #1819-2 February 2019
Page 1
1.
Introduction
1.1 BACKGROUND ON AUDIT
Audit Authority:
The Deschutes County Audit Committee authorized the audit of the supervisory topics in the
Internal Audit Program Work Plan for 18/19.
This first report on supervisory topics covers the first objective of analyzing span of control
(management). In the context of the audit on supervisory topics, the analysis of span of control
sets the stage for the additional work in assessing staff development and expectations for
supervisors.
1.2 OBJECTIVES and SCOPE
Objectives:
The objectives were.
Current report
1) Analysis and assessment of span of control/management by department/office.
Future report(s)
2) Assessment of staff development efforts by looking at supervisor efforts with staff performance
management topics of training, goals, communication, and evaluation (would not include
specifically discipline).
3) Assessment of expectations for supervisors.
4) Be aware of any issues with compliance with federal and state regulations and requirements, as
may be applicable for these objectives.
Scope and timing:
The audit commenced in November 2018 and continued through December 2018. Staff and
supervisory information was pulled as of October 2018. In some cases, historical information may
Supervisory Topics - Span of Control report #1819-2 February 2019
Page 2
be presented for context. All County department/offices and the 911 County Service District are
included. Span of control calculations utilize full and part time employees and do not include
unfilled positions, on-call, election workers, contract employees or volunteers.
Given audit time and budget constraints, the development of background for span of control was
selective and not exhaustive. Management literature and audits from other jurisdictions were
reviewed regarding organizational design, factors affecting span of control, current trends, and the
advantages and consequences of increasing span of control. The presented background
information summarizes relevant aspects of the literature most relevant to this topic.
Supervisors are defined as those with the primary responsibility to prepare and sign a subordinate
employee’s performance evaluation. We chose this definition because the person doing the
employee’s evaluation is also responsible for hiring, assigning and directing work, and managing
the employees’ performance. Employee supervisors are being tracked in the County’s Human
Resource system (Tyler Munis).
Span of control does not take into account the effort which a supervisor devotes to providing
supervision. The scope of this audit objective did not include a review of any internal controls.
1.3 METHODOLOGY
Audit procedures for this report included:
Interviewed staff on systems, practices and procedures;
Developed and analyzed personnel costs;
Developed, reviewed and analyzed human resource data on supervision, including average
span of control calculations;
Reviewed articles, literature, reports and studies on span of control;
Analyzed demographic data of employees and added generational information; and
Supervisory Topics - Span of Control report #1819-2 February 2019
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Discussed span of control analyses with departments/offices.
We conducted this performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
(2011 Revision of Government Auditing Standards, issued by the Comptroller General of the
United States.)
1.4 BACKGROUND ON PERSONNEL COSTS
CHART I -
10 yr. trend in
payroll and benefit
costs (line)
compared with FTE
(column)
Personnel costs and full time equivalents:
Payroll and benefit costs have grown over time and with increases in full time equivalent (FTE)
employees. Ninety-four percent (94%) of employee budgeted positions (by FTE) are filled each year.
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CHART II -
10 yr. per capita
trends in payroll
and benefit costs
(line) compared
with FTE (column)
CHART III
FY 2018
Composition of
personnel (payroll
and benefit) costs
Using per capita measures of pension cost and FTE is a methodology to see how costs have reacted
to population increases that drive service requirements. These show a relatively consistent trend
for levels of staffing FTE over time. Personnel costs and benefits have increased and the item that
increased the fastest over this time was pension benefit costs. Pension benefit costs grew the
fastest in fiscal years 2012, 2017, and 2018.
As shown in the pie chart to the left, thirty-six percent
(36%) of personnel and benefit costs relate to benefits.
This has been relatively consistent over time.
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1.4 BACKGROUND ON SPAN OF CONTROL
... Some span of
control terms
include:
SPAN OF CONTROL (MANAGEMENT) AND LAYERS OF MANAGEMENT
In the context of the audit on supervisory topics, the analysis of span of control sets the stage for
the additional work on assessing staff development and expectations for supervisors. Knowledge
of this established structure will help subsequent analyses.
An organization structure is a means to an end and should help an organization achieve its
objectives. Span of control and layers of management are tools that can assist agencies in
assessing whether their organizational structures are conducive to effective and efficient
operations. It is important to study and plan organizational structure and the span of control
because they affect communication, decision making, flexibility, employee morale, and resource
allocation. Other local governments have examined spans of control in their organizations in order
to influence their organizational structures.
Selected span of control definitions utilized in this report include:
Average span of control: The number of employees divided by the total number of
supervisors. This in some measure reflects that all positions receive supervision.
Span of Control: The number of employees under a supervisor (i.e. five direct reports
would be shown as 1:5)
o Lower Span of Control is: a relative term, but lower spans would include those spans of
control of three or fewer.
o Higher Span of Control is: a relative term, but higher spans of control would exceed the
average and might include those greater than seven.
Organizational Layers: The number of organizational layers is the maximum number of
layers that any one individual within the agency would have to report through to reach the
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… there is
no single
benchmark for
“optimal” span of
control or
number of
management
layers.
top manager (County Administrator/department head/elected) within the agency, plus the
line staff (non-supervisory) layer. Management layers would be organizational layers less
the line staff layer.
Employees/Staff: Full-time and part-time employees that were in the department on
October 2018. This number excludes on-call and election workers. When used with span of
control, includes all supervisors and subordinate employees.
Supervisors: Employees who write and are the primary signers of their employees’
performance evaluations. The assumption is that supervisors are responsible for hiring,
disciplining, and directing work in addition to evaluating. All supervisors in a department on
October 2018 were included in this number.
Span of Control literature background
Contemporary management theory today advocates for greater spans of control and less layers of
management to reflect more effective management practices given the changing nature of today’s
workforce and the workforce’s environment.
The most appropriate ratio of staff to managers can only be determined by carefully evaluating
and balancing the particular purposes and characteristics of an organizational unit. While
contemporary management theory no longer contends that there is a single optimal span of
control for an organization, many leading management theorists agree that spans of control can
be widened.
The appropriate span of control and number of management layers for an organization depend on
several factors including mission, complexity of work, and organization size. Over time, span of
control guidelines have evolved to stress that it is best for each organization to determine its ideal
span of control. Span of control is dependent on many factors, which an organization needs to
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TABLE I:
Factors
influencing span
of control
consider when determining the ideal span of control. Some factors to consider for determining
appropriate span of control are listed in TABLE I, that follows.
Lower
Span of
Control
Greater
Span of
Control
More
Supervisors
Fewer
Supervisors
Complex Nature of the work Not
Complex
Different Similarity of activities performed Similar
Not Clear Clarity of organizational objectives Clear
Fuzzy Degree of task certainty Definite
rules
High Degree of risk in the work for the
organization
Low
High Degree of public scrutiny Low
Weak Supervisor’s qualifications and
experience
Strong
Heavy Burden of non-supervisory duties Light
High Degree of Coordination required Low
None Availability of staff assistance Abundant
Weak Qualifications and experience of
subordinates
Strong
Dispersed Geographic location of subordinates Together
City of Portland Span of Control Study 6/15/1994
(refers to Tomasko, 1990, 159-169; Hrebiniak and Joyce, 149; McClenahen, 34; Nelson, 53)
Supervisory Topics - Span of Control report #1819-2 February 2019
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For example, lower spans of control are anticipated when the nature of work performed is
complex, when organizational objectives are unclear, when tasks are uncertain, or risks are high.
Lower spans of control might be anticipated when contracts and contract employees reduce the
need for employees and increase the administrative burdens. While there is no optimal span of
control or layers of management, a review of nature and characteristics of an agency’s operations,
its operating environment, and needed resources can assist in ensuring that cost-effective, efficient
organizational structures are in place.
It is thought…
Low spans of controls tend to disperse decision authority through many layers of
management with the final decision being made at the high levels of management. This
usually increases the time it takes to make decisions and usually results in less responsive
organizations and higher administrative expenses.
Higher spans of control permit decision making authority at lower levels of management.
Some other benefits include:
• faster and more customer-oriented decision making;
• greater employee satisfaction and motivation;
• more opportunities for development of employee skills;
• less duplication of tasks, roles, and responsibilities;
• lower management costs;
• decreased need for management-support staff;
• less micro-management and faster decision making; and
• clearer communication between the bottom and top layers of the organization.
A flatter structure (one with higher spans of control) complicates supervision and forces delegation
of responsibility, causing subordinates to exercise initiative and to function independently. This in
turn facilitates the training of these subordinates and enhances their opportunity for moving up a
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… a best practice
is to examine
lower spans of
control (3 or
lower)
career structure. Comparing aggregate average span of control numbers serves only to identify
what needs to be looked at in more detail.
Various studies and reports by other jurisdictions indicate a best practice to examine lower spans
of control (those 3 or lower). Though a span of control of 1:20 or above is considered as high, these
were not noted for review.
2. Span of
Control
Observations
The audit included procedures to analyze span of control and average span of control existing for
the County. There are no specific audit findings as this initial work lays the groundwork for
overlaying the next audit objectives.
It is premature to call out any potential issues without seeing if it is impacting the extent and
quality of supervision taking place.
2.1 AVERAGE SPAN OF CONTROL ANALYSES and ORGANIZATIONAL LAYERS
Average Span of Control
Average span of control is the number of employees divided by the total number of supervisors.
Overall County average span of control is 1:6.0. This indicates on average each supervisor
supervises 6.0 staff. The numbers only change marginally if you additionally consider unfilled
positions.
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CHART IV -
Average span of
control by
department/office
and for County
(organized by size
of dept./office)
This chart is not meant to invite comparison of spans of control for departments as each of these
departments/offices is a unique part of local government. The chart separates average span of
control figures for each department/office categorized into some groups by size of that
department/office (in FTE). In general, smaller departments/offices have some limitations on
expanding their span of control. These numbers do not take into account lead workers that are
sometimes utilized by departments/offices.
Organizational Layers
Organizational layers are the number of layers within the agency that a decision would have to go
through to reach the top manager (County Administrator/department head/elected) within the
agency, plus the line staff (non-supervisory) layer.
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CHART V –
Organizational
layers by
department/office
and for County
(organized by size
of dept./office)
These layer levels seem reasonable after reviewing applicable literature and other local
government reports.
2.2 SUPERVISOR SPAN OF CONTROL
Span of control is the number of employees reporting to a supervisor (i.e. five direct reports would
be shown as 1:5). As indicated in the background, the number of reports may vary considerably
based on many factors. As noted in the background material, various studies and reports by other
jurisdictions indicate a best practice to examine lower spans of control (those 3 or lower). These
spans might be appropriate but they are at the lower threshold.
The following Chart VI profiles the County distribution of supervisors’ direct reports. Highlighted
are the percentage of supervisors with three or fewer direct reports. Twenty-eight percent (28%) of
supervisors fall into this category.
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CHART VI -
Distribution of
span of control
measures over
County
supervisors.
(Highlighted are
those with 3 or
fewer direct
reports).
The following CHART VII identifies the composition of supervisory span of control in
departments/offices and highlights the relative percentage of supervisors with span of control of
three or fewer. As indicated in the background material, there are a number of factors that can go
into the span of control. Lower spans of control can result from smaller sized department/offices;
smaller programs or activities; and/or contracting out labor.
For example:
7.4% of
supervisors have
1 direct report
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CHART VII –
Composition of
supervisor span
of control range
by
department/office
Highlights those
with <=3 direct
reports.
(organized by size
of dept./office)
For example: CDD has
17% of their supervisors
with three or fewer
direct reports.
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2.3 SUPERVISOR DEMOGRAPHICS
The County’s
current EEOP Plan
is effective for
11/2017-10/2019
Deschutes County has a policy supporting equal employment opportunities in County government
and for all persons; to prohibit discrimination and harassment in employment on the basis of
• race,
• color,
• national origin,
• sex,
• religion,
• age,
• marital status,
• family relationship,
• sexual orientation,
• physical or mental disability,
• political affiliation,
• veteran’s status, or
• any other classification protected by Oregon
or federal law.
The County will follow this policy in recruitment, hiring, and promotion into all classifications. The
County’s Equal Employment Opportunity Plan (EEOP) (dated November 2017) provides information
on the County’s current workforce environment and the County’s population workforce and areas
where it observes some improvements are needed. Observations were made by job category,
race, and gender.
Though supervisors are not separately called out in the EEOP, it was thought that it would be
healthy to review the nature and characteristics of the employees that make up the management
of the County. The EEOP workforce data for 2017 was used as a reference point in some of these
analyses.
Supervisory Topics - Span of Control report #1819-2 February 2019
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CHART VIII –
Age and
generation
composition of
staff and
supervisors
County employee age distribution.
Supervisors represent 16% of the County’s workforce. Average age of staff and supervisors are
43.6 and 48.4, respectively.
Supervisors have a more concentrated distribution in Generation X and the curve is shifted to the
right a bit reflecting the greater average age.
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CHART IX –
Composition of
gender for staff
and supervisors
(Compared to
EEOP data – DC
Staff and
Community)
County employee gender
Overall gender composition for county staff is currently 48% male and 52% female. This is only
slightly different than the most recent EEOP would suggest at 46% male and 54% female. The
supervisor data shows a greater disparity between genders with 67% of supervisors being male
(33% being female).
DC Supervisors and DC Staff are
based on data in County systems
regarding employee disclosed
gender information as of
10/2018.
DC EEOP and Community EEOP
are based on Deschutes County’s
most recent Equal Employment
Opportunity Plan (EEOP) for
November 2017.
A very small percentage of
employees do not disclose this
information and these were not
included in the calculations
(matches EEOP approach).
Female staff represent 55% of the workforce whereas female supervisors only represent 33%.
EEOP reports, as developed, have not highlighted this disparity in County management/oversight.
Supervisory Topics - Span of Control report #1819-2 February 2019
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CHART X –
Composition of
race for staff and
supervisors
(Compared to
EEOP data – DC
Staff and
Community
workforce)
County employee race
Using the EEOP categories of race, the County is not far from the community profile.
DC Supervisors and DC
Staff are based on data
in County systems
regarding employee
disclosed gender
information as of
10/2018.
DC EEOP and
Community EEOP are
based on Deschutes
County’s most recent
Equal Employment
Opportunity Plan (EEOP)
for November 2017.
A small percentage of
employees do not
disclose such
information and these
were not included in the
calculations (matches
EEOP approach).
There does appear to be some lower staff representation and no supervisor representation in the
Hispanic/Latino category. The community workforce identifies 3.7% as being Hispanic.
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Performance
measures are
chosen to address
what is trying to
be influenced.
The current employee profile data is going to be reviewed by employees with the deployment of
the County’s new Munis human resource software. Though this data might change, the data
reflects the current state of the County data on race.
Performance measures
The County’s does not currently utilize any performance measures addressing diversity as used in
the County’s EEOP Plan. Further, there are no performance measures related to
management/supervision. The County tracks supervisors who participated in training as well as
input from exit interviews. Aside from development of the EEOP Plan, there do not appear to be
concerted efforts to address disparities identified with departments as they make
hiring/promotion decisions.
Performance measurements are a tool for monitoring performance through relevant measures of
efforts, outputs and outcomes. Measures can allow review of activity over time and among peers.
Performance measures help inform a discussion on a particular area. Measures should strive to
be clear to all audiences, provide strategic information, and build upon data being collected.
Effective measures help management address:
• progress towards our goals,
• quantity and quality of services delivered, and
• how we compare to others (when comparable).
Key measures are chosen to address what is trying to be influenced. Ultimately, only a couple of
important measures should be used to focus on accountability and performance reporting.
The County has been increasing its efforts to develop performance measures.
In the absence of performance measures on important diversity criteria, it can be difficult for the
County to demonstrate how they are addressing their intended goals/objectives and will not know
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Page 19
how it is progressing to address any disparities identified. It is important the County achieve their
EEOP Plan goals for fostering a workforce climate free of discrimination and harassment.
It is recommended for Human Resources to consider utilizing some performance measures for the
workforce on EEOP and supervisory topics that may include but are not limited to
• percentage change of EEOP disparities,
• percentage female supervisors and compared to female workforce percentage, and
• percentage minority supervisors compared to community workforce.
It is recommended for Human Resources to integrate EEOP recommendations into
recruitment/promotion efforts.
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3. Management response
Human
Resources
Department
Kathleen
Hinman, Human
Resources
Director
Interoffice memorandum Delivered via e-mail
Date: February 1, 2019
To: David Givans, County Internal Auditor
From: Kathleen Hinman, Human Resources Director
Re: Supervisory Topics – Span of Control report #1819-2
Thank you for the opportunity to review and comment on your report, Supervisory Topics – Span of
Control Report #1819-2 (the Audit). Human Resources values your review on this important issue and
the perspective it provides County Leadership as they look at the arrangement of their workforce now
and into the future.
HR appreciates the attention the Audit brings in its review of the nature and characteristics of the
employees that make up the management of the County as compared to the 2017 workforce data in
the County’s Equal Employment Opportunity Plan (EEOP). HR agrees with the Audit’s suggestion to
consider utilizing performance measures for the workforce on the EEOP and supervisory topics. We
appreciate that the Audit has suggested some performance measures as this will provide a valuable
framework for HR as we track progress made on these efforts.
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Human
Resources
Department
(continued)
HR agrees with the Audit’s recommendation for HR to integrate EEOP recommendations into
recruitment/promotion efforts. The County’s EEOP identifies steps the County will implement to
maintain or improve minority representation in all job categories. While HR has already integrated
many of the EEOP recommendations into recruitment/promotion efforts, HR readily works to further
the efforts in realizing the EEOP recommendations. Since County Departments and Elected Offices
vary widely in the services they provide, the approaches used to impact the EEOP disparities will vary
widely as well. HR looks forward to its continued partnership with County Leadership and our
collective efforts to integrate the EEOP recommendations to further enrich County operations.
{End of Report}
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