Manpower Planning and Budgeting: A Productivity Program

Abstract

In preparing the 1969-70 annual budget for the city of Phoenix, Arizona, it became painfully apparent to all top level city officials that an increased need for services exceeded available resources by about $4 million. In order to balance the budget and meet basic needs, it would have been necessary either to resort to service reductions, enact a major tax increase, or increase efficiency. The city council and the city manager developed a dual plan of action including a tax increase and a productivity improvement program. Initially, the focus of the productivity program was to develop work performance measures and methods improvements. The city engaged a consulting firm to conduct a two-phase study entailing a comprehensive review and assessment of city operations. The first phase of this management study, completed in November 1969, resulted in a major reorganization of the city's administrative structure for the specific purpose of realizing a projected annual savings of $2-3 million. In addition, an Operations Analysis Division was created as part of a newly formed Budget and Research Department. This segment of the study also included a diagnostic appraisal of the adequacy of the city's budgeting system, as well as manpower and equipment utilization. The second phase of the study, the implementation of the productivity improvement program, was aimed at carrying out a work planning and control program. Two main features of productivity improvement were identified as focal points. First, effectiveness improvements (i.e., the production of desired results) were addressed by establishing overall municipal objectives as a basis for detailed budget planning. Secondly, efficiency improvements (i.e., the minimum expenditure of manpower, materials, and equipment to achieve the desired results) were to be addressed by simplifying and improving methods and procedures, measuring work, and setting time standards to gauge manpower utilization. After an orientation session involving all elected and administrative officials was completed, work measurement field studies commenced in April 1970. Monthly manpower utilization reporting was started and work method improvement opportunities were documented. Other significant changes made in establishing the program included the adoption of management-byobjectives (MBO) principles and the application of