There isn’t a steadfast rule in determining a proper Management to Staff ratio. However, there are some guidelines that can assist in establishing a ratio that allows Upper Management to efficiently assess and evaluate a department, department managers to efficiently assess and evaluate employees. And a company to create benchmarks to gauge and define a model ratio that works best with their business model.
First you should define the roles and responsibilities of Management, Supervisors and non-supervisory employees. Here are some suggestions:
Define a Manager:
A Manager has the responsibility for strategic operations, planning and formulates company policy or directs the work of a department. Exercises supervisory authority that is not merely routine or clerical in nature and requires the consistent use of independent judgment.
Additional Related-Duties may include:
Administers one or more policies or programs of a company,
Manages, administers, and controls a local branch office of a company,
Has substantial responsibility in human resources management, company-to-public or company-to-employee relations, public information, or the preparation and administration of budgets.
Examples of working titles that are often managerial include: Chief Executive Officer, Chief Operations Officer, Chief Administrative Officer, Division Director (of a major function, i.e., Information Systems and/or PBX).
Define a Supervisor:
A Supervisor is an employee who has responsibility for daily operations and the authority to do, or effectively recommend, most of the following actions:
Hire,
Discipline (demote, suspend, terminate),
Reward (grant merit increases, promotions, bonuses),
Assign/reassign duties,
Approve leave requests,
Resolve/settle employee relations’ problems,
Formally evaluate employee performance.
Examples of working titles that are often supervisory include: Crew Leader, Department Supervisor, Operations Supervisor, Shift Manager, and Clerical Pool Supervisor
Define a Non-Supervisor employee:
A Non-Supervisor employee has the responsibility of performing daily activities as directed by Management and/or a Supervisor.
From time to time, traditional supervisory duties will relegated to employees. Here are some qualifiers that should assist in determining if a non-supervisory employee should be considered a supervisory employee.
Supervisory Qualifiers:
Is the employee making disciplinary or reward decisions? If yes, then the employee is acting in a supervisory role.
Is the employee the source person for difficult questions and problems from less experienced coworkers? If yes, then the employee is acting in a supervisory role.
Is the employee coordinating the team's leave schedule or work schedule? If yes, then the employee is acting in a supervisory role.
Is the employee presenting project updates to the manager? If yes, then the employee is acting in a supervisory role.
Is the employee responsible only for providing performance data toward the evaluation of team members? If yes, then the employee is acting in a non-supervisory role.
Is the employee responsible for formally evaluating staff assigned to a project but does not grant leave requests, make hiring or general staffing decisions, or discipline or reward employees? If yes, then the employee is acting in a non-supervisory role.
Determining Management to Employee Ratio:
Obviously having too many Managers as compared to employees can bog down the departments’ policy process, create confusion in the chain of command, diminish a manager’s related duties and can lead to the dreaded micro-managed environment.
Having too few Managers as compared to employees can result in duties being prioritized, not in order of importance, but in order to fulfill extended commitments. This action results in projects being placed on the back burner; delegation of traditional manager duties to less qualified subordinates and skewed performance reports.
Thus, it’s important to establish a Management-to-staff ratio that strives to create a balanced and healthy work environment for Managers, Supervisors and Employees.
This is a suggested formula to determine management-to-staff ratios. This formula may need to be tweaked depending on your specific department expectations.
Management-to-staff Ratio = [N+(S-1)]/S
where:
N=Number of non-supervisory employees
S=Combined number of supervisors and managers
"S minus 1" excludes the top company executive from being considered a supervised employee. Therefore, for those companies that are directed by more than one top executive, the “S minus 1" should be replaced with "S minus the number of top executives." For example, if your company does not have an executive director, but is directed by three full-time, salaried commissioners, the formula "[N+(S-3)]/S" will be used.
As an example, lets assume that a business has one (1) CEO, four (4) managers of four different departments and employees 25 non-supervisory employees.
The formula would equate to [25 + 5 –1]/ 5 or a management to employee ratio of 1 manager for 5.8 employees.
Why is the ratio important?
This is just a guideline to establish a model. The ultimate goal of this model is to maximize efficiency in employee supervision while allowing managers/supervisors to effectively manage. It should be expanded to allow CEO’s to collect and interpret related collected metrics about the health of his/her company.
Obviously if you have too few managers/supervisors in the chain of command, then those managers/supervisors will not be able to efficiently and effectively manage the employees or keep pace with written evaluations, schedules and other employee related programs. On the other hand, employees may carry too much responsibility and control too much of the department. These are measurable ‘health’ factors of your organization.
A wise person once stated “to know where you are, you need to know where you’ve been.” Creating a model and varying it to reach the most efficient and effective management-to-staff ratio for your organization will provide you with valuable metrics and a framework needed to reach that goal. It also allows upper management to judge how new programs effect the health of the company.
In addition to the suggested model, you should track other measurable items and combine them with this general model to create an overview of the health of your organization.
In this scenario a company has defined a starting management-to-staff ratio of 1 to 5.8. By using the 1 to 5.8 ratio as a benchmark, the company collects additional information about its management staff and its non-supervisory employees.
The company assigns a percentage value to managerial written evaluations that are properly submitted and completed on time.
The company assesses the management to employee relationships. It assigns values to the Managers perceived health in his/her department and the employees perceived health in the same department.
The company collects information on management and employee over-turn and assigns a value to the causes given for the exit of its employees.
The company assigns value to employee reward programs. Is the employee just an over-achiever, a great team member or does management empower them?
The company tracks the implementation of new programs and the program’s effect on health of the organization.
Using the collected metrics and values the company will start with an initial evaluation of its health and be able to tackle the most problematic areas, then those less problematic areas. The company can then use the historical and current measurements to move toward a goal of efficient and effective management.
This is a short article on the power of models and how they can assist a company in self-assessment and evaluation. There are a number of books and specialist in this area.
* - The formula, [N+(S-1)]/S, is mentioned on several US Government sites as the accepted formula for determining the Management to employee ratio.
* - Portions of this article are from government sites related to employee management.
Article by Charles Carter
www.cs2communications.com
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