Human Resources, Job Design, and Work Measurement 10 PowerPoint presentation to accompany Heizer and Render Operations Management, 10e Principles of Operations Management, 8e PowerPoint slides by Jeff Heyl 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Outline Human Resource Strategy for Competitive Advantage Labor Planning Work Schedules Job Classifications and Work Rules Job Design Labor Specialization Job Expansion Motivation and Incentive Systems Ergonomics and the Work Environment The Visual Workplace Labor Standards Historical Experience Time Studies Ethics 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Learning Objectives Describe labor planning issues Identify the major issues in job design Identify major ergonomic and work environment issues Establish labor standards Compute the normal and standard times in a time study 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Rusty Wallace’s NASCAR Racing Team High performance pit crews are a key element of a successful race team and pit crew members can earn $100,000 per year – for changing tires! Each position has very specific work standards Pit crews are highly organized and go though rigorous physical training Pit stops are videotaped to look for improvements 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Rusty Wallace’s NASCAR Racing Team 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

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 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Labor Planning Employment Stability Policies Follow demand exactly Matches direct labor costs to production Labor is treated as a variable cost Hold employment constant Maintains trained workforce Labor is treated as a fixed cost 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 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 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

The Workplace Work Schedules Job Classification and Work Rules Standard work schedule Flex-time Flexible work week Part-time Job Classification and Work Rules Specify who can do what Specify when they can do it Often result of union contracts Restricts flexibility and consequently efficiency of production 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 Job Classification and Work Rules Specify who can do what Specify when they can do it Specify under what conditions they can do it Often result of union contracts Restricts flexibility in assignments 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Job Design: Labor Specialization The division of labor into unique tasks First suggested by Adam Smith in 1776 Development of dexterity Less loss of time Development of specialized tools Later Charles Babbage (1832) added another consideration Wages exactly fit the required skill required 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Job Design: Job Expansion Adding more variety to jobs Intended to reduce boredom associated with labor specialization Job enlargement Job rotation Job enrichment Employee empowerment 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Job Enlargement Enriched job Enlarged job Limitations: Task #3 (Lock printed circuit board into fixture for next operation) Present job (Manually insert and solder six resistors) Task #2 (Adhere labels to printed circuit board) Enlarged job Enriched job Planning (Participate in a cross-function quality improvement team) Control (Test circuits after assembly) Limitations: Higher capital cost Individuals may prefer simple jobs Higher wages rates for greater skills Smaller labor pool Higher training costs Figure 10.2 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Core Job Characteristics Jobs should include the following characteristics Skill variety Job identity Job significance Autonomy Feedback 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Job Design Continuum Self-directed teams Empowerment Self-direction Specialization Enlargement Self-directed teams Empowerment Enrichment Job expansion Self-direction Figure 10.3 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Motivation and Incentive Systems Bonuses Profit-sharing Gain sharing Incentive plans Knowledge-based 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 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Ergonomics and the Work Environment Ergonomics is the study of the interface between man and machine Often called human factors Operator input to machines 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Ergonomics and Work Methods Feedback to operators The work environment Illumination Noise Temperature Humidity 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

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 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

The Visual Workplace Visual utensil holder encourages housekeeping A “3-minute service” clock reminds employees of the goal Figure 10.8 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

The Visual Workplace Visual signals at the machine notify support personnel Visual kanbans reduce inventory and foster JIT Andon Line/machine stoppage Parts/ maintenance needed All systems go Part A Part B Part C Reorder point Figure 10.8 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

The Visual Workplace Quantities in bins indicate ongoing daily requirements and clipboards provide information on schedule changes Process specifications and operating procedures are posted in each work area Figure 10.8 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Labor Standards Manpower planning depends on a knowledge of the labor required Labor standards are the amount of time required to perform a job Labor standards determine labor requirements, costs, and fair work Necessary for determining staffing requirements Important to labor incentive systems 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Studies Involves timing a sample of a worker’s performance and using it to set a standard Requires trained and experienced observers Cannot be set before the work is performed 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Studies - Compute average observed time: Average Observed time= Sum of the time recorded to perform each element Number of Observations - Determine performance rating and normal time: Normal time= Average Observed time x Performance rating factor - Sum normal times of elements to find task normal time - Compute the standard time Standard time= Total Normal Time 1−Allowance factor 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Rest Allowances Personal time allowance Delay allowance 4% - 7% of total time for use of restroom, water fountain, etc. Delay allowance Based upon actual delays that occur Fatigue allowance Based on our knowledge of human energy expenditure 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Study Example 1 Average observed time = 4.0 minutes Worker rating = 85% Allowance factor = 13% Normal time = (Average observed time) x (Rating factor) = (4.0)(.85) = 3.4 minutes It might be useful at this point to discuss typical equipment utilization rates for different process strategies if you have not done so before. Standard time = = = Normal time 1 - Allowance factor 3.4 1 - .13 .87 = 3.9 minutes 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Study Example 2 Allowance factor = 15% Performance Job Element 1 2 3 4 5 Rating Compose and type letter 8 10 9 21* 11 120% Type envelope address 2 3 2 1 3 105% Stuff, stamp, seal, and 2 1 5* 2 1 110% sort envelopes Cycle Observed (in minutes) Delete unusual or nonrecurring observations (marked with *) Compute average times for each element It might be useful at this point to discuss typical equipment utilization rates for different process strategies if you have not done so before. Average time for A = (8 + 10 + 9 + 11)/4 = 9.5 minutes Average time for B = (2 + 3 + 2 + 1 + 3)/5 = 2.2 minutes Average time for C = (2 + 1 + 2 + 1)/4 = 1.5 minutes 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Study Example 2 Compute the normal time for each element Normal time = (Average observed time) x (Rating) Normal time for A = (9.5)(1.2) = 11.4 minutes Normal time for B = (2.2)(1.05) = 2.31 minutes Normal time for C = (1.5)(1.10) = 1.65 minutes It might be useful at this point to discuss typical equipment utilization rates for different process strategies if you have not done so before. Add the normal times to find the total normal time Total normal time = 11.40 + 2.31 + 1.65 = 15.36 minutes 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Time Study Example 2 15.36 = = 18.07 minutes 1 - .15 Compute the standard time for the job Standard time = Total normal time 1 - Allowance factor = = 18.07 minutes 15.36 1 - .15 It might be useful at this point to discuss typical equipment utilization rates for different process strategies if you have not done so before. 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

Ethics and the Work Environment Fairness, equity, and ethics are important constraints of job design Important issues may relate to equal opportunity, equal pay for equal work, and safe working conditions Helpful to work with government agencies, trade unions, insurers, and employees 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

In-Class Problems from the Lecture Guide Practice Problems Develop an Activity Chart for doing three loads of laundry. Time Operator Machine 1 Washer Machine 2 Dryer   Load clothes and detergent in to Machine 1 Being loaded Idle Run Remove clothes from Machine 1 Being unloaded Load clothes into Machine 2 Load clothes and detergent into Machine 1 Remove clothes from Machine 2 Hang clothes 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

In-Class Problems from the Lecture Guide Practice Problems Carolyn Barrett, a marketing surveyor, takes an average of 10 minutes to complete a particular questionnaire. Carolyn’s performance rating (pace) is 110% and there is an allowance of 15%.   What is the Normal time for completing this questionnaire? What is the Standard time for completing this questionnaire? Normal Time = (observed time)(Performance Rating) Normal Time = (10)(1.10) = 11 minutes Standard Time = Total Normal time/(1-Allowance Factor) = 11/(1-0.15) = 11/.85=12.9 minutes 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013

In-Class Problems from the Lecture Guide Practice Problems The two steps in preparing chocolate candy bars are molding and packaging. Personal fatigue and delay allowances are set at 15%. The molding machine operator is rated at 110% and the packer is rated at 80%. Observed times per batch are given below.   Determine the Normal and standard times for both tasks. For Molding: Average for the actual Molding cycle = 29 minutes per batch Normal Time = (Observed Time)((Performance Rating) = (29)(1.10) = 31.9 Standard Time = (Normal Time)/(1-Allowance) = 31.90/(1-0.15)=37.5 minutes per batch For Packing: Average actual Packing time = 40 minutes Normal Time (Observed Time)(.8) = 32 = 32/(1-0.15)=37.6 minutes per batch   Observed Time in Minutes Task 1 2 3 4 Molding 26 30 29 31 Packing 45 50 35 04: Ch10 HR, Job Design - MGMT 3102: Fall 2013