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09/24/2013

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Brings back memories of surveys, job evaluation systems, etc. that included span of control as a factor.

No factor that has ever been used to justify pay ever completely disappears from memory. People will always try to apply it as a justification.

OTOH, one highly regulated bureaucratic enterprise long ago accepted "number of direct subordinates" in the union-approved evaluation plan... as a REGRESSIVE factor! The more direct reports you required to complete your mission, the LESS your position was worth. In one fell swoop, they reversed decades of empire-building and kicked up both productivity and "profit margin" (they were a semi-private public utility).

The underlying assumption is probably grounded in (Adams'?)old equity theory input/output model. If you accept that, then, ceteris paribus, a greater span of control clearly merits some consideration in (base) pay setting.

Of course, ceteris are rarely if ever paribus, and as you note, a move to an ROI-based view of reward will require you to throw this under the bus.

However, my own experience and at least some research suggests that equity theory describes the way that actual people actually think. So, as a practitioner, you might want to be able to provide a facially reasonable explanation of why you are paying Mr X (with 3 subordinates) the same as Ms. Y (with 23 subordinates)

Well said, Tony, although most folks with less Latin in their backgrounds may stumble over the original "all else being equal" phrase. In the days when overseers literally stood over their subordinates, monitoring and directing their every move, the number being bossed did indeed influence the boss's economic value. The flat organization structures, virtual employees and matrix reporting relationships in today's world of the empowered knowledge worker suggest that things have changed.

As you noted, most labor economists would prefer a model reflecting the organization's ROI over a model based on personal effort expended. Workers, however, prefer whatever model that yields the greater benefit to themselves.

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