June 2010 1

Personnel controlling at the

Deutsche Bundesbank

June 2010 2

Organisation chart of department “Controlling, accounting and organisation”

C 13Coordination of ESCB

related activities, Corporate Governance

C 30Organisation-wide procedures

C 32In-house Consulting

C 33SAP integration and

Cross- functional projects

C 34Job evaluation

C 11Cost accounting,

profitability analysisand budget

C 2-1Accounting procedures and

allocation of profits

C 21Financial reporting and

statements (daily financial statement, weekly financial statement)

C 22SAP FI

C 1Corporate Controlling

C 2Accounting

C 3Organisation

C 20Annual accounts, general

ledger, quarterly statements,profit estimate, accounting

issues, standards and policy

C 10Operational comparison

and statistics

C 12Strategicplanning

C 35Security, Crisis Management

C 3-1/C 3-2Cross-functional tasks,RM principles/methods

Service centre “KoLei”Cost accounting data

processing

Service centre “Bu”Administrative + Asset

accounting, Master dataadministration

C 31Organisation Surveys

C 13Coordination of ESCB

related activities, Corporate Governance

C 30Organisation-wide procedures

C 32In-house Consulting

C 33SAP integration and

Cross- functional projects

C 34Job evaluation

C 11Cost accounting,

profitability analysisand budget

C 2-1Accounting procedures and

allocation of profits

C 21Financial reporting and

statements (daily financial statement, weekly financial statement)

C 22SAP FI

C 1Corporate Controlling

C 2Accounting

C 3Organisation

C 20Annual accounts, general

ledger, quarterly statements,profit estimate, accounting

issues, standards and policy

C 10Automated staff assessment

Operational statistics

C 12Strategicplanning

C 35Security, Crisis Management

C 3-1/C 3-2Cross-functional tasks,RM principles/methods

Service centre “KoLei”Cost accounting data

processing

Service centre “Bu”Administrative + Asset

accounting, Master dataadministration

C 31Organisation Surveys

June 2010 3

Tasks and objectives of personnel controlling

• Support of the decision-makers in the strategic and operational management

• Objective: to ensure reason-based corporate governance and the observance of cost efficiency and cost-saving principles

• General and decision-making aid for personnel planning and future staffing levels

• Coordination and service function

June 2010 4

Tools of personnel controlling

-Regular Reports (e.g. Year-end-Budget-Monitoring Report)

-Occasional Reports

-Comparison of utilisation rates (branches)

-Management information system (MIS)

-Use of various ratios (e.g. rate of absenteeism, training etc.)

-Operational statistics

June 2010 5

Structure of personnel controlling at the Bundesbank

Operational statistics Organisational analysesJob evaluationsStaffing assessment procedure STANDARD

June 2010 6

Operational statistics

June 2010 7

Statistics in the bundesbank...

external internal

department statistics

data: assets and liabilitiesMFI, economic indicators, payment systems

output: balance of payments

department organisation

data: money processed, cash provided, number of MFI, security guards(hours)...

output: quantitative framework

June 2010 8

Purpose of operational statistics

• To supply a quantitative framework for personnel controlling

• To record systematically quantities and values to be processed (volumes, amounts, square metres)

• To make this information available to interested parties (mainly to management, general public)

• To enable – with the help of statistical series – the identification of changes and trends

June 2010 9

• a statistical foundation for further management tools

• a basis for staffing assessment, cost plan and cost-unit accounting

• a basis for the calculation of operating performance /output

• general reports

Referring to personnel controlling this means, operational statistics is used as….

June 2010 10

In the Bundesbank operational statistics is….

collected manually

1.500 positions

or derived in an automated procedure

500 positions (e.g. cash management)

June 2010 11

Advantages of automated procedures :

☺ tamper – proof, no manipulation possible☺ mistakes are prevented☺ time-saving☺ high capacity (more data can be processed)☺ plausibility checks can be integrated in the systems

Examples of automated data transfers:

☺ cash management system, cashless payment transactions☺ payment transfer systems (SEPA, TARGET)☺ SAP FI, SAP CO, SAP HR …

June 2010 12

It is also structured by locations and the frequency:

As per June 2010, operational statistics is collected by

47 branches (600)11 service centres (500)9 regional offices (380)1 central office (Frankfurt am Main) (1.100)

Frequency :

25 % daily (when of interest)10 % year-end/mid-yearly65 % monthly

June 2010 13

Conflict of objectives concerningoperational statistics

Need for detailed information versus clear, logicalstructure and clarity/transparency

Relation between benefit and effort of counting/analysing figuresPossible conflict between staff representatives ifdetailed figures are needed (no individual-related dataallowed)Not everything that counts can be counted,and not everything that can be counted, counts.

June 2010 14

BSF Excel printed form

June 2010 15

Display in SAP

June 2010 16

Display in EXCEL

June 2010 17

Plausibility Checks

REASON

Integer data is a necessary condition to achieve correct results that are notinfluenced by wrong/missing figures; even the perfect calculation is useless, if the statistical basis is not correct; it can even lead to completely misleadingresults

MEASURES that can be taken to enhance the quatlity of data

- verification and electronical control samples in SAP- automated plausibility checks immediately after typing in the data in SAP

(figures that seems to be wrong go red)- monthly result monitoring (control and signature)- operational statistics are subject to auditing

June 2010 18

Analysis of operational statistics

☼ Daily average of statistics (comparison between branches)(example: processed bundles per day)

☼ Variances to month/year before

☼ Trends

☼ Aggregation of special working units f.e. cash department

☼ Possibility to gain background information

June 2010 19

Staffing assessment procedureSTANDARD

June 2010 20

Main features• Mathematical calculation system (“standard calculation”)

• Identification of the current operating performance of individual activities to determine target staffing levels for individual performance groups/work areas or offices

• Uniform procedure throughout the Bundesbank

• Use of averages: based on an appropriate target number of daily working hours for an employee of at least average qualifications and training, taking into account any secondary activities and personal as well as technical additional time results in standardised staffing requirements

• Computer-assisted implementation (f.e. EXCEL, multidimensional database)

• Standard calculation sheets for branches, regional offices and central office

• Based on the results of above mentioned organisational /surveys and analyses (f.e. processing times)

• Current numbers/volumes from operational statistics

STANDARD procedure

June 2010 21

Objectives• Establishing the Bundesbank’s quantitative and qualitative staffing

requirements

• Benchmark for determining target staffing levels for branches, regional offices and central office

• Review of staffing levels in previous periods

• Benchmark figure and decision-making aid for personnel planning

• Basis for calculating cost-effectiveness (unit cost accounting) and monitoring organisational measures (introduction of service centres, new processing procedures)

STANDARD procedure

June 2010 22

Implementation of the STANDARD procedure

Measuring the quantifiablequantifiable work performance

• Relatively unproblematic in operational units, especially if

• easily measurable reference values can be identified

• testable – tamper-proof – reference values can be used (egsubmitted/deposited money)

STANDARD procedure

June 2010 23

Approach

• Deriving a “valuation ratio” from the median processing time

• The annual workload (given by the statistical position) multiplied by the valuation ratio = the numerical value for a standard position

• Illustrating the staffing requirement by converting annual workloads into numerical values (1000 numerical value = 1 member of staff)

• Taking into account holidays and illness (staffing reserves)

STANDARD procedure

June 2010 24

An example at the Bundesbank:

• Median processing time (eg 6 min/banknote bundle)

• Working hours per employee per working day (at the moment: 480 minutes/day)

• Working days per year: 250

STANDARD procedure

June 2010 25

Valuation ratio as %

1000*100*median processing timenumber of working hours per day*250

=

Our example

Number of working hours per day = 480 minutes (based on a 40hour working week)

Valuation ratio = 1000*100*6

480*250 = 5.0 %

STANDARD procedure

June 2010 26

Variable component for determining staffing requirements from the operational statistics

• Workloads (eg 250.000 notes per year)

Formula for establishing personnel requirements for each individual activity on a sustainable basis:

Workload x valuation ratio= numerical value

250.000 * 5 % = 12.500 numerical values

STANDARD procedure

June 2010 27

Modification of the valuation ratios• Degression tables, if work can be rationalised as the volume increases

(weighing gold bullion, post, office services)

• If more efficient machines or procedures are used, the valuation ratios must be recalculated because less staff may be needed

• Specifying minimum staffing levels for some work areas (eg IT support, computer centres,cashier´s desk, security)

STANDARD procedure

June 2010 28

Measuring output which is not directly quantifiable• Selection of suitable general reference variables (number of branches, staff

target/actual figures) as far as possible

• Specifying fixed numerical values for basic duties (after analysing the scope of the work based on precise job descriptions, if applicable, conducting capacity utilisation studies etc)

Supplement for output which is not directly quantifiable

• Supplement for management and supervision (only for purely supervisory work, not for technical supervision of operations)

• Supplement for office service work (depending on the specific situation in a work area)

STANDARD procedure

June 2010 29

Supplement for staffing reserves

Considering the fact that the employees are not present during the entire working year, additional staff must be kept in reserve for the following reasons:

• holidays

• special leave of absence and exemption from duty

• participation in general training and further training events

• illness

• absenteeism rate

STANDARD procedure

June 2010 30

Calculation scheme:Numerical values (as calculated with valuation ratio and

statistics)

+ supplement for office services

+ supplement for management and supervision

+ supplement for staffing reserves (absenteeism/training)

= total staffing requirements

STANDARD procedure

June 2010 31

BRANCH XYZ: 1.000 * 100 * median processing time 480 minutes * 250 days

numerical values = workload * valuation ratio

coins bundlesmedian processing time: 4,8 min 2,4 min

workload per year: 1.000.000 3.000.000

valuation ratio: ? ?numerical values (X1): ? ?

Supplement for office services ? ? ( X1 * 5 %)and for management and supervision ? ? ( X1 * 5 %)

net staffing requirement (X2): ? ?Supplement for staffing reserves: ? ? ( X2 * 20 %)

total staffing requirements ? ?

valuation ratio =

STANDARD procedure

June 2010 32

Regular updating of the standard calculation

• Amendments to individual components following an analysis/survey to determine which changes have occurred

• Organisational analyses (each work area at least every five years)

• Ongoing adjustment to the current cost centre structures

STANDARD procedure

June 2010 33

Target-performance comparison in personnel controlling • Comparison of the operating output (based on annual statistics,

median processing times) and the staff actually deployed to achieve it

• Quarterly analysis (comparison of the planned and extrapolated business performance)

• Analysis as per 31st December based on the year as a whole

• Identification of overstaffing and understaffing

• Monthly analysis

June 2010 34

Tabelle 1.2:Comparison of budgeted and actual operating performance and staff deployment

Regional Offices including service centres, 200x (sum of the performance groups)

Regional Offices (incl. SCs) (1) (2) (3) Manpower (2)-(1) % Manpower (3)-(2) %

Hamburg 300,0 250,0 320,0 -50 -20,0 70 21,9

Hanover 250,0 200,0 270,0 -50 -25,0 70 25,9

Leipzig 200,0 150,0 220,0 -50 -33,3 70 31,8

Mainz 300,0 290,0 310,0 -10 -3,4 20 6,5

Munich 350,0 340,0 360,0 -10 -2,9 20 5,6

Stuttgart 250,0 250,0 270,0 0 0,0 20 7,4

Total

200x Budgeted operating

performance in manpower

200x Actual operating

performance in manpower (target)

31.12.200x Staff deployment in

manpower (actual)

Difference between budgeted and actual operating performance

Difference between actual staff deployment and actual operating

performance overstaffing (+)/understaffing (-)

STANDARD procedure

June 2010 35

Monthly Anlaysis

June 2010 36

• To measure the degree of capacity utilisation at a branch throughout the year – indicator function –

• To identify the reasons behind high/low-level utilisation

• To draw up proposals for management measures throughout the year TARGET FIGURE: -uniform level of capacity utilisation across all branches as far as possible -degree of utilisation=100%

With a monthly analysis it is possible ….

June 2010 37

Monthly calculation of • the level of capacity at the individual branches → Comparison of

• operating performance (manpower)

• and the staff actually assigned to the branch (SAP)

June 2010 38

1. Calculation of target staffing level (=operating performance) for the reporting period

⇒ Statistics [reported period figures are annualised]

x valuation ratio [quantification of the staffing requirements]= target staffing level

⇒ Including supplement for management and

supervision

⇒ Including supplement for staffing reserves

June 2010 39

2. Calculation of actual staffing levels for the reporting

period Collecting anonymised data

⇒ Actual number of staff working in the reporting month (including

staff who are sick, on secondment, on holiday, in training) (Data provided by SAP)

June 2010 40

Branch in Heidelberg, August 2007Entire operating performance of the branch: 46 employee

Staff actually working at the branch: 64 employeeslevel of capacity: 46/64=72 % redundant staff

Operating performance of the cash payments division: 38 employees

Staff actually working in the cash payments division: 36 employeeslevel of capacity: 38/36=106 % staff demand?

EXAMPLE

June 2010 41

Use for the branches

• Up-to-date, monthly information about the branche`scapacity utilisation and business structure

• Indication of potentially inefficient structural/processing organisation

• Information that could be surrendered to another branch

Use for controlling

• Target figure: almost balanced utilisation of the branches

• Indicators for short-term deployment of staffFlexible management of overstaffing /understaffing

• Fine-tuning of money stocks

June 2010 42

Thank you for listening ☺ !