Operations Management to Manage Labor and Design Jobs So People Are Effectively and Efficiently Utilized Human Resources and Job Design Chapter 11

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Objective of Human Resource Strategy

Operations Management To manage labor and design jobs so people are effectively and efficiently utilized Human Resources and Job Design Chapter 11

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Constraints on Human Resource People and Work System Goals Strategy

Product strategy Process strategy Use people efficiently Provide reasonable - Skills needed - Technology - Talents needed - Machinery and - Materials used equipment used within constraints quality of work life - Safety - Safety

Schedule Human Individual differences - Time of day - Strength and fatigue - Time of year Resource Who - Information processing (seasonal) and response - Stability of schedules Strategy

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Labor Planning/Stability Policies Determining Policies of Labor Stability

• Follow demand exactly • Hold employment Employer policies are partly determined by – keeps direct labor costs constant management’s view of labor costs – as a fixed cost, tied closely to production – maintains a trained or as a variable cost. – incurs costs of workforce • hiring/firing – incurs costs of • unemployment insurance • idle time when demand • labor wage premium is low • meeting increased demand when demand is high

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Productivity in Relation to Annual Turnover Rate Work Schedules • Standard work schedule >20% $120,000 – five eight-hour days 16-20% $125,000 •Flex-time – allows employees, within prescribed limits, to 11- 15% $130, 000 determine their ow n schedu les • Flexible work week 6-10% $150,000 – four 10-hour days 3-5% $153,000 • Part-time – less than eight hours per day, or an irregular <3% $200,000 schedule

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Job Classifications and Work Rules Job Design • Specify • Specifying the tasks that make up – who can do what a job for an individual or group – when they can do it • Involves determining – under what conditions they can do it – What is to be done (i. e., responses) • Often result of union pressure – How it is to be done (i.e., tools etc.) – Why it is to be done (i.e., purpose) • Restricts flexibility in assignments; consequently restricts efficiency of production • Results in job description – Shows nature of job in task-related behaviors

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Components of Job Design Job Specialization

• Job specialization • Involves • Job expansion – Breaking jobs into small component parts • Psychological components – Assigning specialists to do each part •Self-directed teams • First noted by Adam Smith (1776) – Observed how workers in pin factory • Motivation and incentive systems divided tasks into smaller components

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Job Specialization Often Reduces Cost Job Expansion

• Process of adding more variety to jobs • Greater dexterity & faster learning • Intended to reduce boredom associated with • Less lost time changing jobs or tools labor specialization • Use of more specialized tools • Methods • Pay only for needed skills – Job enlargement – Job enrichment – Job rotation – Employee empowerment

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Job Enlargement/Job Enrichment Job Enlargement/Job Enrichment Planning Enriched Job Participate in a cross- Enriched job function quality- Planning improvement team

Task #3 Present job Task #2 Enlarged Job Present Lock printed circuit into Manually insert and Adhere labels to Task #2 Task #3 fixture for next solder six resistors printed circuit board Job operation

Control Enlarged job Control Test circuits after assembly

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Job Rotation Employee Empowerment

Pediatrics Employee Empowerment Maternity

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Self-Directed Teams Job Design Continuum Self-directed • Group of empowered individuals working Teams Increasing together for a common goal Empowerment reliance on • May be organized for short-term or employees’ contribution and long-term objtibjectives Enrichment increasing • Reasons for effectiveness acceptance of – Provide employee empowerment Enlargement responsibility by employee – Provide core job characteristics Specialization – Meet psychological needs (e.g., belonging) Job Expansion

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Limitations to Core Job Characteristics Job Enlargement/Job Enrichment

• Skill variety • Higher capital cost • Job identify • Many individuals prefer simple jobs • Job significance • Higher wages are required since the worker must • Autonomy utilize a higher level of skill • Feedback • A smaller labor pool exists of persons able and willing to perform enriched or enlarged jobs • Increased accident rates may occur • Current technology in some industries does not lend itself to job enlargement and enrichment

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Motivation Motivation and Money

• Worker performance depends on • Taylor’s scientific management (1911) – Motivation – Workers are motivated mainly by money – Ability – Suggested piece-rate system – Work environment • Maslow’s theory (1943) • Motivation is the set of forces that compel – People are motivated by hierarchy of needs, behavior which includes money • Money may serve as a psychological & financial • Herzberg (1959) motivator – Money either dissatisfies or is neutral in its effect

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Psychological Components of Job Monetary Incentives Design • Bonuses: Cash & stock options • Individuals have values, attitudes, • Profit sharing: Distribution of profits and emotions that affect job results • Gain sharing: Reward for company – Example: Work is a social experience perf orm an ce (e. g. , cost r educti on ) that affects belonggging needs – Scanlon plan is most popular (cost • Effective worker behavior comes mostly from within reduction.) the individual • Incentive systems – Scientific management argued for external financial – Measured daywork: Pay based on standard rewards time • First examined in ‘Hawthorne studies’ – Piece rate: Pay based on pieces done ٢٦ ٢٥

Hawthorne Studies: Workplace Hawthorne Studies Lighting

• Conducted in late 1920’s • Originally intended to examine effects of lighting • Western Electric Hawthorne plant on productivity • Showed importance of the individual – Scientific management proposed that physical conditions affect productivity in the workplace • Result: Productivity increased regardless of • Showed the presence of a social lighting level system in the workplace • Conclusion: Increased productivity was due to workers’ receiving attention

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Hawthorne Studies: Piecework Pay Maslow’s Hierarchy of Needs Self-Actualization Use of abilities • Examined effects of group piecework pay system on Self-fulfillment

productivity Ego • Workers under piecework system should produce as Self Respect much as possible Social Group Interaction – Scientific management assumes that people are motivated Job Status only by money Safety Physical Safety • Result: Production less than maximum Job Security • Conclusion: Social pressure caused workers to Physiology Food produce at group-norm level Shelter

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Herzberg’s Motivation/Hygiene Factors Ergonomics and Work Methods

Job Dissatisfiers Job Satisfiers • Worker performance depends on (Hygiene) (Motivators) – Motivation Company policies and administration Achievement – Ability Supervision - technical Recognition – Work environment Working conditions Advancement • Foundation laid by Frederick Taylor Interpersonal relations - supervision Work itself – Match employees to task Status Responsibility – Develop work methods Job security Personal growth – Establish work standards Salary

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Recommended Levels of Illumination Ergonomics Task Condition Type of Task Illumination Level Type of or Area (Ft-C) Illumination • Study of work Small detail; Sewing, 100 Overhead ceiling • Also called ‘human factors’ Extreme inspecting lights and desk • Involves human-machine interface accuracy dark materials lamp Normal detail, Reading, parts 20-50 Overhead ceiling prolonged assembly, general •Examples lights periods office work – Mouse Good contrast, Recreational 5-10 Overhead ceiling – Keyboard fairly large facilities objects lights

Large objects Restaurants, 2-5 stairways, Overhead ceiling warehouses lights

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Decibel levels for Various Sounds The Visual Workplace Environmental Noises Common Noise Sources Decibels Jet takeoff (200 ft) 120 Ear • Uses low-cost visual devices to share protection Casting shakeout area Riveting machine 110 required information quickly and accurately. Electric furnace area Pneumatic peen hammer, 100 Very textile weaving plant annoying • Displays and graphs replace paper Printing press plant Subway train 90 Pneumatic drill 80 Ear • Provides real-time information Inside sports car (50 mph) Freight train protection Vacuum cleaner (10 ft) 70 required if Near freeway (auto traffic) Speech (1 ft) exposed 8 • System should focus on improvement, not hours or merely monitoring more Large store 60 Intrusive • Can provide both production and financial data Private business office Light traffic (100ft) Large transformer (200ft) 50 Quiet Minimum levels, residential 40 areas in Chicago at night Soft whisper 30 Very quiet ٣٦ ٣٥

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The Visual Workplace What is Work Measurement?

• Determining the amount of worker time required to generate one unit of output • Provides labor standards – Target amount of time required to perform a job under normal working conditions

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Uses of Labor Standards Sources of Labor Standards

• Costing labor content of products • Historical experience • Planning staffing needs • Time studies • Cost & time estimates for bids • Predetermined time standards (MTM) • Planning production • Work sampling • Wage-incentive plans • Employee efficiency

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Labor Standards - Historical Experience • Labor standards are based on how many labor- hours were needed in past • Least preferred method • Advant ages – Easy and inexpensive to obtain standard • Disadvantages – Unknown accuracy due to unusual occurrences, unknown pace etc.

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