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Article 13. How Efficient Government Reform Can Save More Tax Dollars Than Privatization

When government bureaucracies become so inefficient that a private company can easily replace them and make a profit it is a clear sign that something should be done. The profits from privatization however is just another source of lost tax dollars. Sometimes it appears that privatization is the only alternative when powerful bureaucracies cannot be persuaded to reform.

The following is an example of where most of the inefficiency occurs. Government organizations typically route documents for processing through various departments each department keeps a backlog of documents for processing. When the backlog gets high management steps in and puts pressure on employees to reduce the backlog and may even authorize overtime. When backlogs are low management is nowhere to be found. It is important to note that when backlogs are high it may take only a few minutes to process a document but when backlogs are low it may take hours to process the same document. Employees are mindful that “no backlog” means that there is nothing for them to do. Management sees its job, as only getting the documents processed not in managing costs. Remember as I have stated elsewhere a manager is paid by the number of employees he has working for him not by how he controls costs. This results in unnecessary levels of management being created and employees being promoted for organizational loyalty. The organization becomes less tolerant of employee complaints and nearly all communication is in the form of downward directives. Upward communication is generally interpreted as a disloyal complaint. Employees who are perceived as disloyal are not promoted. Nowhere in the bureaucratic organization is there any real incentive to reduce costs.

The key is to get the cooperation of the senior management of the organization. Nothing can be done without senior management driving the culture change from a bureaucratic organization to a cost and schedule organization. If workloads are not increasing be prepared for a significant staff reduction. In the case where the bureaucratic organization can be privatized and mismanagement and waste prevail I recommend the following cost and schedule solution.

The approach is in the implementation of process controls and a progress reporting system. We must first know how long it takes to process a document. By time-studying a number of documents we find out how the process varies each time the process is done. If the process after time-studying varies by more than 5% then the process is time-studied several times to arrive at an average standard time. If the supervisor does not know what the standard time is for processing a document he is unable to plan for the number of documents that his office can complete in a week.

The Staffing determination is made after time-studying and arriving at a standard time for processing a document. We then compute the total time in an average month for processing documents. We adjust the time from the standard 100% rating to a 75% rating (adding 25% more time), convert minutes to hours and divide this total by the number of hours normally worked by employees. This will give you the correct staffing level for processing documents.

Each week the supervisor develops a work plan using the standard processing time at 100%. The work plan should list all of his planned and in-work jobs with a time scale allowing him to check off how much of the job has been completed every four hours against what should have been done. He will be able see immediately if the job is falling behind schedule and by how much. Using this method the supervisor should know by Tuesday if his weekly goals are going to be met. What generally happens at this point is that the supervisor knows who his most efficient and experienced employees are and assigns the work accordingly. If he remains behind schedule he can still meet his goals by approving overtime. Meeting schedule is very important it prevents other departments experiencing lost time.

A weekly report is sent to at least two levels of management. Included in the report should be the number of documents received and the number of documents processed. A weekly productivity rating based on the standard at 100% should be indicated as a part of the report. The Department’s Supervisor must sign the report. These reports become a direct input to the budget planning process. A good budget plan can be made with the knowledge of the following: what work is scheduled; what processes are involved, how much time is needed for each process. The Reports provide the missing data that is needed for budget planning as I noted In Article 2. “How to Approach Budget Cuts“. More Information can be found in Articles 4. “Finding the Correct Office Staffing Level” and Article 5. “Government Bureaucracies and Document Turn-around Time“.

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