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An analysis of the span of control in various city departments of Kansas City, comparing it to other government organizations. the impact of a narrow span of control on organizational effectiveness and recommends potential improvements. data on the number of direct reports per supervisor, the median span of control, and the range of management layers in different departments.
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City Auditor’s Office
City of Kansas City, Missouri
April 24, 2002
Honorable Mayor and Members of the City Council:
We conducted this performance audit to assess the organizational structures of city departments excluding police and fire. Span of control – the number of employees reporting to a supervisor – and management layers – the number of levels in an organization excluding line workers – are components that describe organizational structure.
Organizational structure is important because it affects communication, decision-making, flexibility, employee morale, and resource allocation. Organizational structures tend to evolve over time. Periodically reviewing an organization’s structure and planning for changes provides an opportunity to improve effectiveness. The management trend since the 1990’s has been to widen span of control and decrease the number of management layers. Flattening organizations in this way is thought to provide advantages such as improved communication, faster decision-making, and cost savings. The city is currently making efforts to streamline operations through the KC-GO process. The city is also facing lower than expected revenues, which have resulted in hiring freezes and budget cuts. This span of control audit should provide a tool for the City Manager to use in streamlining operations and addressing the budget imbalance. However, changing organizational structure also carries risk.
While management literature provides no single benchmark for an optimal span of control, the city’s span is narrower with more management layers than other government organizations that have completed similar studies. Average span of control in city departments ranges from 3.2 to 12.8 direct reports per supervisor. The city’s median span of control across departments is 4.6 direct reports per supervisor. The city has up to nine management layers between the City Manager and line workers. Span of control for individual supervisors ranges from 0 – where the subordinate employee position is vacant – to 30 direct reports. The “right” span of control in a given situation depends on a number of factors, however spans that are too high or too low can cause problems.
We recommend that the City Manager direct department heads to review and justify cases where a supervisor has two or fewer direct reports, or has more than 12 direct reports. In addition, we recommend that the City Manager direct department heads to review vacant supervisory positions before filling them to determine whether the positions can be replaced with line positions. Also, the City Manager should direct the position review committee to consider span of control when approving positions.
Introduction 1 Objectives 1 Scope and Methodology 1 Background 3 Definition of Span of Control 3 Organizational Structure Influences Organizational Effectiveness 3
Findings and Recommendations 7 Summary 7 City’s Span of Control Narrow Compared to Other Governments 7 Span of Control in City Is Fairly Narrow 8 Other Government Agencies Have Reported Wider Spans of Control and Fewer Layers Than Kansas City Span of Control for City Supervisors Ranges from 0 to 30 12 Span of Control and Management Layers Shape Organization 14 In Several Instances City Departments Not Compliant with City Policies 16 Recommendations 16
Appendices 17 Appendix A. Bibliography 17 Appendix B: City Manager’s Response 21
Exhibit 1. Span of Control Statistics for City Departments, October 2001 9 Exhibit 2. Span of Control, Management Layers 12 Exhibit 3. Frequency Distribution of Direct Reports Per Supervisor, October 2001 13 Exhibit 4. Factors Influencing Span of Control 14
We conducted this audit to assess the city’s span of control under the authority of Article II, Section 13 of the Charter of Kansas City, Missouri, which establishes the Office of the City Auditor and outlines the City Auditor’s primary duties. A performance audit is an objective, systematic examination of evidence to independently assess the performance of a government organization, program, activity, or function in order to provide information to improve public accountability and facilitate decision-making.^1 This audit was designed to answer the following questions:
Span of control refers to “how many people a manager or supervisor can control while maintaining productivity and discipline.”^2 More simply, it is the number of employees reporting to a supervisor. This audit of span of control should provide a tool for the City Manager to use in assessing budget concerns and supplement the KC-GO efforts to streamline operations.
The scope of our audit includes all city departments except the Police and Fire departments, which use hierarchical, military-like structures. Our audit findings also exclude the City Clerk’s Office, which declined to participate, and several divisions of the Parks and Recreation Department. We were unable to obtain and reconcile some data for the Parks and Recreation Department’s recreation, community centers, and golf and tennis divisions. We excluded the zoo because zoo employees are no longer city employees.
(^1) Comptroller General of the United States, Government Auditing Standards (Washington, DC: U.S. Government
Printing Office, 1994), p. 14. (^2) Anonymous, “Span of Control vs. Span of Support,” The Journal for Quality and Participation , Volume 23, Issue
4, Fall 2000, p. 15.
Introduction
checked personnel files to see who signed an employee’s last annual review as the primary rater.
No information was omitted from this report because it was deemed privileged or confidential. We decided not to include the departmental organizational charts in the report due to volume. We provided copies of all the charts to the City Manager and Director of Human Resources, and the charts for each department to the department head, for their use in considering our recommendations.^3
Definition of Span of Control
Span of control refers to the number of employees reporting to a supervisor. Management layers refer to the number of levels in an organization excluding the bottom layer of non-supervisory line workers.
Organizational Structure Influences Organizational Effectiveness
Span of control and management layers are components of organizational structure. 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 cities, such as Portland and Seattle, have examined spans of control in their organizations in order to redesign their organizational structures.
In Kansas City government, changes are generally made incrementally. New positions are normally created through the annual budget process as decision packages or on a case-by-case basis during the year. A position review committee reviews requests for new positions, but no one in the organization monitors span of control or the number of management layers on an ongoing basis.
While not uncommon, incremental changes without an overall strategy can be detrimental to the organization’s overall performance. Lack of planning and flexibility often result in abrupt organizational changes, which negatively affect employee morale and the organization’s ability to respond to changing economic and societal conditions.
(^3) Copies of the charts are available for review on our website (www.kcmo.org/auditor) or at our office.
Performance Audit: Span of Control
The city is currently undertaking initiatives to streamline internal processes. Kansas City Government Optimization (KC-GO) 4 has made recommendations related to supervision. In the Water Services Department, Human Resources Department and the Finance Department’s Division of Purchases and Supplies, KC-GO has suggested staffing reorganizations, increased use of automation, moving office staff into the field, and making more use of self-managed teams. The information related to span of control in city departments should help in implementing KC-GO recommendations and selecting other areas for review.
(^4) Kansas City Government Optimization (KC-GO) is a citywide initiative to provide better services using
competitive business practices.
Performance Audit: Span of Control
Compared to other government agencies that have studied span of control, Kansas City has fewer direct reports per supervisor and more management layers. Span of control for individual supervisors in the city varies widely. While management literature does not identify a single benchmark for an optimal span of control, organizations with narrow spans and many management layers can suffer from communication and morale problems and slow decision-making. Spans that are too wide also create problems such as inconsistent performance and inadequate supervision.
We recommend that the City Manager direct department heads to review and justify cases where a supervisor has two or fewer direct reports, or has more than 12 direct reports. In addition, the City Manager should direct department heads to review vacant supervisory positions before filling them to determine whether the positions can be replaced with line positions. Also, the City Manager should direct the position review committee to consider span of control when approving new positions.
During the course of this audit, we found several instances of noncompliance with city job descriptions and with the Memorandum of Understanding between the city and Local 500 regarding the assignment of supervisory duties to non-supervisory employees. We recommend that the City Manager direct city departments to bring the assignment of supervisory duties into compliance with city policies.
Average span of control in city departments ranges from 3.2 to 12. direct reports per supervisor. The city’s median span of control across departments is 4.6 direct reports per supervisor. The city has up to nine management layers between the City Manager and line workers. While management literature provides no single benchmark for an optimal span of control, the city’s span is narrower than other government organizations that have completed similar studies. The trend in organizations since the 1990’s has been to widen organizational span of control and decrease management layers. Flattening organizations
Findings and Recommendations
person as a direct report and that staff member does not have any direct reports. (See Exhibit 1.)
Exhibit 1. Span of Control Statistics for City Departments, October 2001
Department EmployeesSupervisorsVacanciesContractEmployeesNon-
supervisorsAverageSpan of ControlRatio of Non-supervisors toSupervisorsRange of the # ofManagementLayers Aviation 437 69 74 1 368 6.3 5.3 2 - 5 City Auditor's Office 20 6 1 2 14 3.2 2.3 2 City Manager's Office 84 18 5 10 66 4.6 3.7 2 - 4 City Planning and Development 84 22 16 23 62 3.8 2.8 2 - 3 Codes Administration 101 23 4 1 78 4.3 3.4 3 - 4 Convention & Entertainment Centers 224 45 37 42 179 5.0 4.0 2 - 5 Finance 162 47 16 0 115 3.4 2.4 2 - 5 Health 199 52 17 13 147 3.8 2.8 2 - 5 Housing & Community Development 40 10 9 8 30 3.9 3.0 1 - 3 Human Relations 30 6 1 1 24 4.8 4.0 1 - 2 Human Resources 39 11 2 1 28 3.5 2.5 1 - 5 Information Technology 90 23 4 15 67 3.9 2.9 2 - 4 Law 78 6 2 26 72 12.8 12.0 1 - 3 Municipal Court 70 9 6 3 61 7.7 6.8 1 - 2 Neighborhood & Community Services 275 56 37 30 219 4.9 3.9 2 - 5 Office of Environmental Management 107 16 0 3 91 6.6 5.7 1 - 3 Parks and Recreation^5 315 48 50 12 267 6.5 5.6 1 - 6 Public Works 580 127 116 23 453 4.6 3.6 1 - 6 Water Services 933 210 93 21 723 4.4 3.4 2 - 8 Total 3,868 804 490 235 3, Median 4.6 3.6 2 - 4 Sources: City department lists of employees.
There is no single benchmark for “optimal” span of control or number of management layers. Literature indicates that there is no ideal span of control or number of management layers. 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. A single span of control or a set number of management layers cannot usefully be set across all departments.
Other Government Agencies Have Reported Wider Spans of Control and Fewer Layers Than Kansas City
While there is no single benchmark for what span of control should be, other public organizations that have conducted span of control studies
(^5) Parks and Recreation data do not include recreation, community centers, golf and tennis divisions, or the zoo.
Performance Audit: Span of Control
reported wider spans of control and fewer management layers than Kansas City. These organizations also set goals to widen spans of control and reduce the number of management layers.
Portland, Oregon, reported an average span of control of 6.5 in selected functional groups and a maximum of 7 management layers, including their top layer of management (mayor and city commissioners). 6 The average span of control (6.5) of their sample groups is calculated using full-time equivalents (FTE’s). Full-time temporary workers were counted as FTE’s. Part-time and seasonal FTE’s were sometimes counted. Our median span of control in departments (4.6) is based instead on total headcount of employees.
Because Portland’s 1994 study showed that surveyed organizations had fewer layers of management and wider spans of control in its middle management, the report recommended Portland’s Office of Finance and Administration establish span of control guidelines that recognize situational differences (department size, task complexity, strategic importance) and review organizational structure as part of the budget process. The report provided a preliminary proposal for the guidelines:
Public safety departments had different suggested guidelines.
King County, Washington, reported an average span of control of 5.6 and an average of 5 management layers in their Executive and Judicial
(^6) City of Portland Span of Control Study , prepared for the City of Portland Audit Services Division by Public
Knowledge, Inc. and The Kemp Consulting Group, 1994.
Performance Audit: Span of Control
positions rather than eliminate them and some agencies did not cooperate saying the reduction was not appropriate for their agency.
Exhibit 2. Span of Control and Management Layers^11
Organization
Span of Control
Management Layers Kansas City, MO (2001) 4.6 (median) 9 maximum Portland, OR (1994) 6.5 7 maximum Seattle, WA (1996) 5.9 8 maximum King County, WA (1994) 5.6 5 (average) California State Government (1996) 6. Iowa State Government (1996) 10. Texas State Government (1997) 9. Federal Government (1993) 7. Sources: City of Portland, Span of Control Study; City of Seattle, Ratio of Staff to Managers in City Government Audit; King County, Washington, Span of Control; California Research Bureau, Flattening Organizations: Practices and Standards.
Span of Control for City Supervisors Ranges from 0 to 30
The number of direct reports per supervisor in the city ranges from 0 to
(^11) Kansas City used headcount, and did not count lead workers as supervisors; Portland used FTE’s instead of
headcount; Seattle used headcount and did not include lead workers as supervisors; King County, Washington counts lead workers as supervisors.
Findings and Recommendations
Exhibit 3. Frequency Distribution of Direct Reports Per Supervisor, October 2001
Sources: City department lists of employees.
Different factors influence span of control. Management literature identifies various factors that cause span of control to differ among supervisors and in different organizations. For example, narrower spans of control are appropriate when the nature of work performed is complex, when organizational objectives are unclear, when tasks are uncertain, or risks are high. (See Exhibit 4.)
Other factors may also affect spans of control, such as creating supervisory positions to attract or retain workers; and promoting workers as a way to increase compensation.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Number of Direct Reports per Supervisor
Percent of Supervisors
Findings and Recommendations
A wider, flatter configuration means fewer layers of reporting and more subordinates reporting to a supervisor. Wider and flatter organizations tend to have faster decision-making, and improved communication, motivation and morale. Spans of control that are too wide can also create problems such as inconsistent performance and inadequate supervision.
The number of layers in an organization varies, although larger organizations tend to have more layers than smaller organizations. Organizations with many layers are associated with centralized decision- making. Flatter organizations tend to have decentralized decision- making, as authority for making decisions is given to the front line employees.
The trend is to widen span of control. In the last decade, the introduction of information technology spurred the trend toward wider spans of control. Wider span of control is often achieved by restructuring and eliminating middle management. Sometimes restructuring can be achieved by reclassifying managerial positions as non-supervisory instead of eliminating those positions.
Flattening the organizational structure creates advantages and risks. Reducing management layers and widening span of control provides opportunities for an organization to improve, but not without risks. Communication and decision-making are thought to improve as information passes through fewer layers with increased speed and accuracy. Accountability is clarified as decision-making becomes less diffused. Literature also notes improved employee morale and motivation. As an organization flattens and widens, improved compensation may also result for remaining employees. Personnel cost reductions can be realized if middle management positions are eliminated.
Flattening organizations by reducing layers and widening span of control is not without risks. The elimination of layers often happens abruptly, which creates insecurity among remaining personnel. The insecurity as well as insufficient supervision may result in poor morale and performance errors. Widening span of control and de-layering can be hard on remaining managers due to the increased workload. De-layering may also result in a loss of talented and experienced managers. If the span is too wide, communication becomes difficult. Social networks break down. There is also a tendency for flat organizations to re-inflate.
Performance Audit: Span of Control
We found several instances where city departments were not compliant with city policies and the Memorandum of Understanding (MOU) with Local 500 regarding the assignment of supervisory duties to city employees. We reported these cases to the Human Resources Director.
Some employees’ duties are inconsistent with their job description. We identified an employee performing duties of a supervisor whose position description precludes supervisory duties. We also identified several employees in a division who were classified as supervisors but not performing supervisory duties. Employees performing work other than the duties described in their position description can be the source of disputes over appropriate levels of compensation. It can also complicate the imposition of discipline, as well as recognition for performing a job in an exemplary manner, when the “supervisor” is not in a supervisory classification.
Labor union employees perform supervisory duties. We found at least three instances where labor employees covered by the MOU with Local 500 performed supervisory duties such as preparing and signing performance evaluations. The MOU and the Code of Ordinances explicitly exclude Local 500 members from performing any supervisory duties.
We recommend that the City Manager direct city departments to bring the assignment of supervisory duties to employees into compliance with the applicable city policies.
