The explanation of the allocation system will be easier if we assume, for simplicity’s sake, that the University consists of only three departments. We’ll call these English, Science, and Medicine. The allocation system works the same whether there are 3 departments or 300 departments to be allocated permits.

These departments have the following characteristics:

Department Number of Employees Percent of Employees Years of Service Percent of Service
English 10 7.41% 100 14.29%
Science 40 29.63% 250 35.71%
Medicine 85 62.36% 350 50.00%
Total 135 100% 700 100%

Let’s further simplify things by assuming that we have only 100 permits to allocate.

We have decided that the best way to proceed is to allocate 80 percent of the permits according to each department;s percentage of the total employees (Step 1). The remaining 20 percent will be allocated according to each department;s percentage of the total state service (Step 2). The results of these two steps will then be added to find the total number of permits that should be allocated to each department.

STEP 1: We will allocate 80 percent of the total supply, or 80 permits, in this step. The English Department has 7.41 percent of the permits to be allocated in this step, or (.0741 X 80) = 5.928 permits. The Science Department will get (.2963 X 80) = 23.704 permits, and the Department of Medicine will get (.6296 X 80) = 50.368 permits in this step.

STEP 2: We will allocate the remaining 20 percent of the total supply, or 20 permits, in this step. The English Department has 14.29%% of the total years of service, so it will get (.1429 X 20) = 2.858 permit in this step. The Science Department will get (.3571 X 20) = 7.142 permits, and the Department of Medicine will get (.5000 X 20) = 10 permits in this step.

STEP 3: We will add the results of Step 1 and Step 2 to get a total number of permits to assign to each department.

Department Step 1 Allocation Step 2 Allocation Total Permits
English 5.928 2.858 8.786 or 9
Science 23.704 7.142 30.846 or 31
Medicine 50.368 10.000 60.368 or 60

In this example then, the English Department would get 9 permits to distribute to its 10 employees (.9 permits per employee). The Science Department would get 31 permits for its 40 employees (.78 permits per employee), and the Department of Medicine would get 60 permits for its 85 employees (.71 permits per employee).

The variation in the ratios of permits per employee occurs entirely as a result of the “seniority factor” in the allocation process. In the initial step, each department is given .563 permits per employee: the second step of the allocation process increases the ratio of permits per employee by a greater or lesser amount, depending on the years of seniority within the department.