Management is the least efficient activity in your organization.
Think of the countless hours that team leaders, department heads, and vice presidents devote to supervising the work of others. Most managers are hardworking; the problem doesn’t lie with them. The inefficiency stems from a top-heavy management model that is both cumbersome and costly.
A hierarchy of managers exacts a hefty tax on any organization. This levy comes in several forms. First, managers add overhead, and as an organization grows, the costs of management rise in both absolute and relative terms. A small organization may have one manager and 10 employees; one with 100,000 employees and the same 1:10 span of control will have 11,111 managers. That’s because an additional 1,111 managers will be needed to manage the managers. In addition, there will be hundreds of employees in management-related functions, such as finance, human resources, and planning. Their job is to keep the organization from collapsing under the weight of its own complexity. Assuming that each manager earns three times the average salary of a first-level employee, direct management costs would account for 33% of the payroll. Any way you cut it, management is expensive.
Second, the typical management hierarchy increases the risk of large, calamitous decisions. As decisions get bigger, the ranks of those able to challenge the decision maker get smaller. Hubris, myopia, and naïveté can lead to bad judgment at any level, but the danger is greatest when the decision maker’s power is, for all purposes, uncontestable. Give someone monarchlike authority, and sooner or later there will be a royal screwup. A related problem is that the most powerful managers are the ones furthest from frontline realities. All too often, decisions made on an Olympian peak prove to be unworkable on the ground.
Third, a multitiered management structure means more approval layers and slower responses. In their eagerness to exercise authority, managers often impede, rather than expedite, decision making. Bias is another sort of tax. In a hierarchy the power to k–l or modify a new idea is often vested in a single person, whose parochial interests may skew decisions.
Finally, there’s the cost of tyranny. The problem isn’t the occasional control freak; it’s the hierarchical structure that systematically disempowers lower-level employees. For example, as a consumer you have the freedom to spend $20,000 or more on a new car, but as an employee you probably don’t have the authority to requisition a $500 office chair. Narrow an individual’s scope of authority, and you shrink the incentive to dream, imagine, and contribute.
9 replies (most recent on top)
Prem techs don’t make 80,000 a year. Some may get there and higher in years where they go out of state and work 7 days a week with OT every day. Prem tech is about 52k a year.
AT&T is still set up a–
Again, go to the career intelligence section of HROneStop and check for yourself. I don't post BS, just factual information that you or any other employee has access to. All you have to do is look.
1bei+14SrPcZT. You're wrong on L3 and above. Their salary ranges vary by geography for at least L3 and L4
Aaahh..Sorry about that. Didn't know I was being disingenuous. The geographical zones don't matter for L3 and up and most L1/L2 managers are in N1 (the lowest) geographical zones with N2 being reserved for larger metro's (San Antonio, Atlanta, Miami, Memphis, Charlotte, Stl Louis, etc.). And the great majority of union members across all regions (excluding prem/wire) techs are in Group 1 craft and get paid exactly what I said. Don't believe me. Go to your local union president and get the membership data from him/her and then you'll see that I'm telling the truth. And the ranges I posted for L1 and L2 managers are "Salary Ranges". I guess you missed that part.
TL DR
Ok, @1eyx
Your pay comparison is a little disingenuous. You’ve focused on the top wage rate and OT for a craft position (majority of craft positions make a lot less) while, inversely talking about the lower management wages, excluded bonuses and higher match rates for 401k plans. I think the article states averages and is talking across the company hierarchy.
How many craft positions does it take to equal the top 20 management positions ?
I like the article, but this is complete non-sense:
“Assuming that each manager earns three times the average salary of a first-level employee, direct management costs would account for 33% of the payroll. Any way you cut it, management is expensive.”
You do realize that most level-1 managers make the same or less than their direct reports don’t you? The TSR for most level-1 managers at N1 ranges from $50,000 - $110,000 with most right in the middle of that. Just about every group 1 craft (union) tech in the enterprise, regardless of region, is at or above $80,000 yearly wages excluding any additional OT. Most Area Manager positions TSR is $70,000 - $149,000 at N1 and most employees are right in the middle of than range. You can view the TSR (Target Salary Range) for any management position in any location (N1-N4) at HROneStop in the careers section under “Career Intelligence”.
The article describes the corporate America business modelm of he 1950's. It's worked great for large behemoths like T , but the days of career long employment and white collar are about to change..