Operations Management Human Resources and Job Design Chapter 10

1. Operations ManagementHuman Resources and Job DesignChapter 10 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

2. Outline • GLOBAL COMPANY PROFILE: SOUTHWEST AIRLINES • HUMAN RESOURCE STRATEGY FOR COMPETITIVE ADVANTAGE • Constraints on Human Resource Strategy • LABOR PLANNING • Employment-Stability Policies • Work Schedules • Job Classifications and Work Rules © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

3. Outline - Continued • JOB DESIGN • Labor Specialization • Job Expansion • Psychological Components of Job Design • Self-Directed Teams • Motivation and Incentive Systems • Ergonomics and Work Methods • THE VISUAL WORKPLACE • LABOR STANDARDS © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

4. Learning Objectives When you complete this chapter, you should be able to : Identify or Define: • Job design • Job specialization • Job expansion • Tools of methods analysis • Ergonomics • Labor standards • Andon © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

5. Learning Objectives - Continued When you complete this chapter, you should be able to : Describe or explain: • Requirements of good job design • The visual workplace © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

6. Southwest Airlines • Profitable for 26 years while United, Northwest, and USAir lost billions. • Strategy: Human resources • Culture of caring for people in the totality of their lives, not just at work. • Spends more to recruit and train than any other airline © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

7. Southwest Airlines • Empowered employees • Wages higher than industry average • Stock options for some employees • Employees treated like customers • Everybody understands what everybody else’s problems are • No gimmicks! © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

8. Objective of Human Resource Strategy To manage labor and design jobs so people are effectively and efficiently utilized © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

9. Use people efficiently within constraints Provide reasonable quality of work life © 1995 Corel Corp. People and Work System Goals © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

10. Product strategy - Skills needed - Talents needed - Materials used - Safety Process strategy - Technology - Machinery and equipment used - Safety Procedure What Human Resource Strategy Schedule - Time of day - Time of year (seasonal) - Stability of schedules Individual differences - Strength and fatigue - Information processing and response Who When Location strategy - Climate - Temperature - Noise - Light - Air quality Layout strategy - Fixed position - Process - Assembly line - Work cell - Product Where How Constraints on Human Resource Strategy © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

11. Job Design Labor Standards People and Work System Aspects © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

12. Follow demand exactly keeps direct labor costs tied closely to production incurs costs of hiring/firing unemployment insurance labor wage premium Hold employment constant maintains a trained workforce incurs costs of idle time when demand is low meeting increased demand when demand is high Labor Planning/Stability Policies © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

13. Productivity in Relation to Annual Turnover Rate © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

14. Determining Policies of Labor Stability Employer policies are partly determined by management’s view of labor costs – as a fixed cost, or as a variable cost. © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

15. Work Schedules • Standard work schedule • five eight-hour days • Flex-time • allows employees, within prescribed limits, to determine their own schedules • Flexible work week • four 10-hour days • Part-time • less than eight hours per day, or an irregular schedule © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

16. Job Classifications and Work Rules • Specify • who can do what • when they can do it • under what conditions they can do it • Often result of union pressure • Restricts flexibility in assignments; consequently restricts efficiency of production © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

17. Job Design • Specifying the tasks that make up a job for an individual or group • Involves determining • What is to be done (i.e., responses) • How it is to be done (i.e., tools etc.) • Why it is to be done (i.e., purpose) • Results in job description • Shows nature of job in task-related behaviors © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

18. Components of Job Design • Job specialization • Job expansion • Psychological components • Self-directed teams • Motivation and incentive systems • Ergonomics and work methods © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

19. Job Specialization • Involves • Breaking jobs into small component parts • Assigning specialists to do each part • First noted by Adam Smith (1776) • Observed how workers in pin factory divided tasks into smaller components • Found in manufacturing & service industries © 1995 Corel Corp. © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

20. Job Specialization Often Reduces Cost • Greater dexterity & faster learning • Less lost time changing jobs or tools • Use of more specialized tools • Pay only for needed skills © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

21. Job Expansion • Process of adding more variety to jobs • Intended to reduce boredom associated with labor specialization • Methods • Job enlargement • Job enrichment • Job rotation • Employee empowerment © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

22. Enriched Job Planning Enlarged Job Present Job Task #2 Task #3 Control Job Enlargement/Job Enrichment © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

23. Planning Participate in a cross-function quality-improvement team Enriched job Task #3 Lock printed circuit into fixture for next operation Present job Manually insert and solder six resistors Task #2 Adhere labels to printed circuit board Control Test circuits after assembly Enlarged job Job Enlargement/Job Enrichment © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

24. Pediatrics Maternity © 1995 Corel Corp. © 1995 Corel Corp. Geriatrics © 1995 Corel Corp. Job Rotation © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

25. Decision-Making Control Planning Employee Empowerment Employee Empowerment © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

26. Psychological Components of Job Design • Individuals have values, attitudes, and emotions that affect job results • Example: Work is a social experience that affects belonging needs • Effective worker behavior comes mostly from within the individual • Scientific management argued for external financial rewards • First examined in ‘Hawthorne studies’ © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

27. Hawthorne Studies • Conducted in late 1920’s • Western Electric Hawthorne plant • Showed importance of the individual in the workplace • Showed the presence of a social system in the workplace © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

28. Hawthorne Studies: Workplace Lighting • Originally intended to examine effects of lighting on productivity • Scientific management proposed that physical conditions affect productivity • Result: Productivity increased regardless of lighting level • Conclusion: Increased productivity was due to workers’ receiving attention © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

29. Hawthorne Studies: Piecework Pay • Examined effects of group piecework pay system on productivity • Workers under piecework system should produce as much as possible • Scientific management assumes that people are motivated only by money • Result: Production less than maximum • Conclusion: Social pressure caused workers to produce at group-norm level © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

30. Self-Directed Teams • Group of empowered individuals working together for a common goal • May be organized for short-term or long-term objectives • Reasons for effectiveness • Provide employee empowerment • Provide core job characteristics • Meet psychological needs (e.g., belonging) © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

31. Self-directed Teams Increasing reliance on employees’ contribution and increasing acceptance of responsibility by employee Empowerment Enrichment Enlargement Specialization Job Expansion Job Design Continuum © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

32. Core Job Characteristics • Skill variety • Job identify • Job significance • Autonomy • Feedback © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

33. Limitations to Job Enlargement/Job Enrichment • Higher capital cost • Many individuals prefer simple jobs • Higher wages are required since the worker must utilize a higher level of skill • 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 © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

34. Motivation • Worker performance depends on • Motivation • Ability • Work environment • Motivation is the set of forces that compel behavior • Money may serve as a psychological & financial motivator © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

35. Motivation and Money • Taylor’s scientific management (1911) • Workers are motivated mainly by money • Suggested piece-rate system • Maslow’s theory (1943) • People are motivated by hierarchy of needs, which includes money • Herzberg (1959) • Money either dissatisfies or is neutral in its effect © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

36. Monetary Incentives • Bonuses: Cash & stock options • Profit sharing: Distribution of profits • Gain sharing: Reward for company performance (e.g., cost reduction) • Scanlon plan is most popular (cost reduction.) • Incentive systems • Measured daywork: Pay based on standard time • Piece rate: Pay based on pieces done © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

37. Self-Actualization Use of abilities Self-fulfillment Ego Self Respect Social Group Interaction Job Status Safety Physical Safety Job Security Physiology Food Shelter Maslow’s Hierarchy of Needs © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

38. Job Dissatisfiers (Hygiene) Job Satisfiers (Motivators) • Achievement • Recognition • Advancement • Work itself • Responsibility • Personal growth • Company policies and administration • Supervision - technical • Working conditions • Interpersonal relations - supervision • Status • Job security • Salary Herzberg’s Motivation/Hygiene Factors © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

39. Core Job Characteristics Psychological States Personal & Work Outcomes Job Characteristics • Motivation • Satisfaction • Job performance • Absenteeism & turnover Hackman & Oldham © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

40. Ergonomics and Work Methods • Worker performance depends on • Motivation • Ability • Work environment • Foundation laid by Frederick Taylor • Match employees to task • Developwork methods • Establish work standards © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

41. Ergonomics • Study of work • Also called ‘human factors’ • Involves human-machine interface • Examples • Mouse • Keyboard © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

42. Task Condition Type of Task or Area Illumination Level Type of Illumination (Ft-C) Overhead ceiling Small detail; Extreme accuracy 100 Sewing, inspecting dark materials lights and desk lamp Normal detail, prolonged periods Reading, parts assembly, general office work 20-50 Overhead ceiling lights Good contrast, fairly large objects Recreational facilities 5-10 Overhead ceiling lights Large objects 2-5 Restaurants, stairways, warehouses Overhead ceiling lights Recommended Levels of Illumination © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

43. Environmental Noises Common Noise Sources Decibels Ear protection required Jet takeoff (200 ft) 120 Casting shakeout area Riveting machine 110 Electric furnace area Pneumatic peen hammer, 100 Very textile weaving plant annoying Printing press plant Subway train 90 Pneumatic drill 80 Ear Inside sports car (50 mph) Freight train protection Vacuum cleaner (10 ft) 70 required if Near freeway (auto traffic) Speech (1 ft) exposed 8 hours or more Large store 60 Intrusive 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 Decibel levels for Various Sounds © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

44. Methods Analysis • Focuses on how task is performed • Used to analyze • Movement of body, people, or material • Activities of people & machines • Tools • Process chart • Flow diagram • Activity chart • Operations chart (right-hand, left-hand) © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

45. Methods Analysis Used to Study • Movement of individuals or materials (Flow diagrams or process charts) • Activity of human and machine and crew activity (Activity charts) • Body movement (primarily hands) (Micro-motion charts) © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

46. SUBJECT: Request tool purchase Dist (ft) Time (min) Symbol Description     Write order             D D D D On desk 75 To buyer Examine  = operation;  = transport;  = inspect; D = delay;  = storage Process Chart © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

47. Buyer 75 ft. You Flow Diagram © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

48. Flow Diagram and Process Chart of Axle-Stand Production Line © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

49. Activity Chart for Two-Person Oil-Change Crew © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458

50. Operations Chart (Left Hand/Right Hand) © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458