METROPOLITAN EDISON COMPANY - Pennsylvania Public Utility ...

Exhibit X-3Pennsylvania Electric CompanyAverage Span of Control Ratios2007 – 20092007 2008 2009Management 106 113 102Non-Management 831 850 775Average Span ofControl RatioSource: Data Request HR-171:7.84 1:7.52 1:7.60Exhibit X-4Pennsylvania Power CompanyAverage Span of Control Ratios2007 – 20092007 2008 2009Management 21 22 21Non-Management 196 192 173Average Span ofControl RatioSource: Data Request HR-171:9.33 1:8.73 1:8.24As evident from Exhibits X-3 and Exhibit X-4, the average span of control ratiosfor Penelec’s and Penn Power’s employees have consistently been over the 1:7 range.There are no steadfast rules in determining proper management to staff span of controlratios but there should be some guidelines that can assist in establishing these ratios.A span of control analysis would help the FE-PA Companies efficiently assess andevaluate each cost center or department and help create benchmarks to gauge anddefine a model ratio range that works best with the FE-PA Companies’ business needs.Each instance of spans of control that occur outside of model ratio range (e.g., 1:5 to1:7) should be periodically reviewed and a justification provided. The ultimate goal ofthe model should be to maximize efficiency in employee management. Creating amodel and varying it to reach the most efficient and effective management to staff ratiowill provide valuable metrics and a framework needed to reach that goal.Moreover, as part of its Project Management and Work Management capabilities,FirstEnergy should strive to track contractor time by type of job and use this informationwithin Manpower Planning to better assess the cost effectiveness of performing workinternally versus using contractors.- 64 -