Operations Management Human Resources and Job Design Chapter 10

1. Operations ManagementHuman Resources and Job DesignChapter 10

2. Outline • Human Resource Strategy for Competitive Advantage • Constraints on the Human Resource Strategy • Labor Planning • Job design • Labor standard (Work measurement)

3. Human Resource Strategy The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized People should be effectively utilized within the constraints of other operations management decisions People should have a reasonable quality of work life in an atmosphere of mutual commitment and trust

4. 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

5. Job Design Labor Standards 3 Decision areas of HR Strategy Labor Planning

6. 1. Labor Planning Employment Stability Policies • Follow demand exactly • Matches direct labor costs to production • Incurs costs in hiring and termination, unemployment insurance, and premium wages • Labor is treated as a variable cost

7. Labor Planning Employment Stability Policies • Hold employment constant • Maintains trained workforce • Minimizes hiring, termination, and unemployment costs • Employees may be underutilized during slack periods • Labor is treated as a fixed cost

8. Work Schedules • Standard work schedule • Five eight-hour days • Flex-time • Allows employees, within limits, to determine their own schedules • Flexible work week • Fewer but longer days • Part-time • Fewer, possibly irregular, hours

9. Job Classification and Work Rules • Specify who can do what • Specify when they can do it • Specify under what conditions they can do it

10. 2. Job Design • Specifying the tasks that constitute a job for an individual or a 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)

11. Benefits of Job Designs • Improved quality of work life • Improved job satisfaction • Increased motivation • Allows employees to accept more responsibility • Improved productivity and quality • Reduced turnover and absenteeism

12. Job Design • Job specialization • Job expansion • Psychological components • Self-directed teams • Motivation and incentive systems • Ergonomics • Visual workplace

13. Labor Specialization • The division of labor into unique tasks • First suggested by Adam Smith in 1776 • Development of dexterity and faster learning • Less loss of time • Development of specialized tools

14. Job Expansion • Adding more variety to jobs • Intended to reduce boredom associated with labor specialization • Job enlargement • Job rotation • Job enrichment • Employee empowerment

15. Job Expansion • Job enlargement: the grouping of a variety of tasks about the same skill level;horizontal enlargement • Job enrichment: giving more responsibility that includes some planning and control;vertical enlargement • Job rotation: to move from one specialized job to another • Employee empowerment: allow employee to assume both managerial and staff responsibilities

16. Enriched Job Planning Enlarged Job PresentJob Task #2 Task #3 Control Job Expansion/Enrichment

17. 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 Expansion/Enrichment

18. Pediatrics Maternity Geriatrics Job Rotation

19. Decision-Making Control Planning Employee Empowerment Employee Empowerment

20. Limitations of Job Expansion Higher capital cost Individuals may prefer simple jobs Higher wages rates for greater skills Smaller labor pool Increased accident rates Current technology may not lend itself to job expansion

21. Psychological Components of Job Design • Individuals have values, attitudes, and emotions that affect job results • Effective worker behavior comes mostly from within the individual • How to design jobs to meet minimum psychological requirement

22. Self-Directed Teams • Group of empowered individuals working together to reach a common goal • May be organized for long-term or short-term objectives • Effective because • Provide employee empowerment • Ensure core job characteristics • Meet individual psychological needs

23. Self-directed Teams Increasing reliance on employees’ contribution and increasing acceptance of responsibility by employee Empowerment Enrichment Enlargement Specialization Job Design Continuum

24. Motivation and incentive system • Worker performance depends on • Motivation • Ability • Work environment • Motivation is the set of forces that compel behavior(psychological and monetary factors) • Money may serve as a psychological & financial motivator

25. Motivation and Incentive Systems • Bonuses - cash or stock options • Profit-sharing - profits for distribution to employees • Gain sharing - rewards for improvements • Incentive plans - typically based on production rates • Knowledge-based systems - reward for knowledge or skills

26. Ergonomics • Ergonomics is the study of the interface between man and machine • Often called human factors • Operator input to machines • Feedback to operators

27. Ergonomics • Study of work • Also called ‘human factors’ • Involves human-machine interface • To design the job can be done and relate to people’s capabilities and limitation • Examples • Mouse • Keyboard

28. The Visual Workplace • Use low-cost visual devices to share information quickly and accurately • Displays and graphs replace printouts and paperwork • Able to provide timely information in a dynamic environment • System should focus on improvement

30. Purpose of visual workplace • To eliminate non-value-added activities of waste by making problems,abnormalities,and standard visual • To enhance communication and feedback • Need less supervision because employee understand standard,see results and know what to do

31. 3.Labor Standards • Effective manpower planning is dependent on a knowledge of the labor required • Labor standards are the amount of time required to perform a job or part of a job • Accurate labor standards help determine labor requirements, costs, and fair work

32. Labor Standards: the amount of time require to perform job • Costing labor content of products • Planning staffing needs • Cost & time estimates for bids • Planning production • Wage-incentive plans • Employee efficiency

33. Sources of Labor Standards • Historical experience • Time studies • Predetermined time standards (MTM) • Work sampling

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

35. Time Studiestiming a sample of worker’s performance and using it as a basis for setting a standard time

36. Steps to Conducting a Time Study • Define the task to be studied • Break down the task into precise elements • Decide how many times each element of the task must be measured • Record the times and ratings of performance for the task elements • Compute the average observed cycle time (element timesadjusted for unusual influences)

37. Time Study Equations Nonwork time = Allowance factor Total time  Element times Average element time = Number of cycles = Normal time Average element time * Perf. Rating Total normal time = Standard time 1 - Allowance factor

38. Allowances • Personal time allowance - 4% - 7% of total time - use of restroom, water fountain, etc. • Delay allowance - based upon actual delays that occur • Fatigue allowance - to compensate for physical or mental strain, noise level, tediousness, heat and humidity, assumption of an abnormal position, etc

39. The time study of a work operation yield an average observed cycle time of 4 minutes.The analyst rated the observed worker at 85%.(workers perform at 85% of normal).The firm uses a 13% allowance factor.Compute the standard time. • Average observed time = 4 minutes • Normal time = Avg obs cycle time X rating factor = 4 x 0.85 = 3.4 minutes • Standard time = 3.4 / (1-0.13) = 3.9 minutes

40. Considerations in Determining Sample Size • How accurate do you want to be? • What level of confidence do you want your measurements to have? • How much variation exists within the job elements?

41. h = accuracy level desired as percent of job element, expressed as a decimal (5% = 0.05) z = number of standard deviations required for the desired level of confidence(90% confidence=1.65) s = standard deviation of the initial sample x = mean of the initial sample Time Studies - Sample Size

42. Accuracy required is to be within 5% and confidence level of 95%.SD =1 ,mean = 3.Determine the sample size. Let h = .05 mean = 3 s = 1 z = 1.96 n = ( ZS / h X ) = { ( 1.96 X 1 ) / (.05 X 3) } = 170.74 or 171 sample _ 2 2

43. Predetermined Time Standards • Labor standards are set from times in published tables {e.g., MTM(method time measurement) Table} • Basic motions (select,grasp,position,assemble,reach,hold,rest and inspect called therbligs) • Procedure • Divide manual work into basic elements • Look up basic element times in table; sum • Advantages • Times established in laboratory setting • Useful for planning tasks

44. MTM Table for Reach Motion Hand in Time TMU Motion Distance A B C A B Moved (in) 3/4 or less 2.0 2.0 2.0 1.6 1.6 1 2.5 2.5 3.6 2.3 2.3 2 4.0 4.0 5.9 3.5 2.7 A Reach to object in fixed location. B Reach to object in variable locations.C Reach to object jumbled with others. 1 TMU = .0006 minutes

45. Sample MTM Table for GET and PLACE Motions

46. Work Sampling • To estimate % of time worker spends on various tasks • Involves observing worker at random times over a long period • Advantages • Less expensive than time studies • Observer requires little training • Disadvantages • Ineffective with short cycles

47. Work Sampling • Used for • Ratio delay studies • Setting labor standards • Measuring worker performance

48. Work Sampling Procedure • Take a preliminary sample to obtain an estimate of the parameter value • Compute the sample size required • Prepare a schedule for observing the worker at appropriate times • Observe and record worker activities; rate worker performance

49. Work Sampling Procedure - continued • Record the number of units produced during the applicable portion of the study • Determine how workers spend their time (usually as a percent)

50. Work Sampling - Sample Size n= required sample size p = estimated value of sample proportion (of time worker is observed busy or idle) h = accuracy level desired in percent, expressed as a decimal