Wednesday, March 19, 2014

The Morris Number and Determining Rank (Morris Number 03; PhD Ideas 05)


To calculate the Morris Number of an organization, count the men above the fifth highest ranking female ("F5").  Sounds simple. But if several people have the same title as F5, and some of them are male, how many of those men should be counted?

One approach would be to assume that F5 is average:  half the men with the same title are above her, half below.  If F5 is not the only woman at that rank, we could guess that she is above the same percentage of men as she is above women. See this example. Or we might calculate the best and worst Morris Numbers, assuming that the woman is at the top or bottom of the rank, respectively.  That range may be useful for comparison to other companies or to the same company at a different time.

But maybe we can do better.  People with the same title, say, Senior Vice President, may not in fact have the same rank and they may not have the same power within the organization.   Assessments of relative power are likely to be subjective, but objective information may be available.  If the company website lists the management team, we may be able to guess who is above whom when the listing is not alphabetical.  (See the example here based on the Girl Scouts' public information.) If the job holders are high enough up in their organization, the company's Executive Leadership webpages or SEC filings may provide some answers as discussed here.

Other employees within the organization, or researchers granted limited access to employment data including title and gender (but no names, please), could use these proxies of true rank, alone or in combination:
       1st choice: compensation package, if available,
       2nd choice: median compensation of direct reports
       3rd choice: budget
       4th choice: seniority
       5th choice: number of direct and indirect reports. 
to calculate the Morris Number. Perhaps someone has already analyzed how accurately each of those predicts a manager's power within an organization.  If not, it seems like a good subject for some PhD research.

I choose direct/indirect reports last because a supervisor of lower-paid workers, compared to one who supervises higher-paid workers such as professionals (engineers, lawyers or accountants), may have
       - more people to supervise, and
       - the same or even a higher budget, but
       - less power or influence.
Seniority might indicate power within the organization, or it might be a sign of dead wood left in place because of strong social or family connections.  How many people you supervise may be less of a clue to your power than your own salary is.  The median salary of the people you supervise may be an even better clue.  Another PhD Idea there.
March 19, 2014; rev 1 20140328,0403

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