| Using HMC's Span of Control analysis, Rex reorganized and redefined its overall management composition and structure. The new organization, implemented in February, 1998, decreased the ratio of management to service provider FTEs by 44%. |
| The Challenge |
 | Rex is a private, 350-bed not-for-profit hospital located in Raleigh, North Carolina. Rex has been utilizing the HMC Operations Benchmark since 1996 to improve operational performance while maintaining excellent levels of patient satisfaction. |
| In 1996, Rex showed significant potential to consolidate management positions and eliminate management layers within the organization. |
| Management ratios were found to among the least aggressive among peer institutions. |
| Rex believed that a leaner, more streamlined reporting structure would lead to better decision making, ultimately translating into improved performance for the organization. They were committed to achieving this model over time and without significant layoffs. |
Developing the Performance Matrix |
| In order to evaluate the qualitative and more objective issues related to organizational structures, the Senior Management team, along with support from Human Resources and John Lewis, Director of Management Engineering, developed a matrix to factor in these variables. |
| The variables included degree over being under-spanned or over-spanned per HMC's analysis, the size of the department's budget, level of management responsibility, overall department labor productivity, the department's relationship to strategic initiatives, and manager competence. |
| Once the matrix was constructed, it was relatively apparent where the largest improvement potentials were. Priorities and timelines for consolidation, integration, and redistributing management responsibilities were established. |
| "What we've done is to put the decisions where they need to be."
Ben Ramsey,
Vice President, Human Resources
Rex Healthcare
Raleigh, NC |
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Overall Management Ratios Show Dramatic Improvement |
| The ratio of management to service level provider FTEs improved by 44%. |
| One complete layer of management was removed. |
| Management and staff are more clearly defined. |
| Relative span of control position went from fifth highest among peers to the second best. |
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