Introduction to Grade Reporting Distance analysis – Orgvue Knowledge Base

Grade Reporting Distance is a measure of structural efficiency and effectiveness. This analysis categorizes every employee (or position) according to the difference between their grade and their manager's grade. There are four categories:

Stretched The manager’s grade is more than X levels higher than the direct report’s grade.

With excessive grade differences between managers and direct reports, the ability for meaningful day-to-day direction is limited.
Contact is typically infrequent, with excessive time being spent ‘getting up to speed’ with any issues to be addressed.

Compressed The direct report and their manager have the same grade.

When there is "grade-on-grade" reporting, there is limited opportunity for managers to add value, particularly in the area of professional development. A high degree of overlap is observed in the work being done.
Above-average turnover rates are often observed amongst employees experiencing grade-on-grade reporting.

On-target The manager’s grade is within X levels of the direct report’s grade.

When all team members have on-target Grade Reporting Distances, the foundation for effective team performance is established.
Effective two-way communications are supported, with opportunity for managers to balance of day-to-day operational direction with longer-term, developmental input.

Reversed: The direct report’s grade is higher than their manager’s grade.

Where reversed reporting relationships are observed, alarm bells should ring!
Unless these are limited to a very small number of exceptional, known and unavoidable cases, it is likely there are underlying issues which will materially impact operational efficiency and the cost-base of the organization.
The grading structure is likely to be unfit for purpose or is not being applied across the organization.

These categories are illustrated below. In this example, ‘on-target’ reporting has been defined as two levels between the manager and a direct report. Note that every direct report is categorized; this contrasts with span of control, where only people managers have a span value.

A separate article provides a step-by-step guide to add Grade Reporting Distance to your dataset.

Categorize every employee (or position) according to Grade Reporting Distance

Visualize the organization landscape to identify where there are structural inefficiencies