Principles of Operations Management People & Work Systems Chapter 7

Learning Objectives Define job design Describe job design components Explain motivation theories & studies

People & Work Systems Goals Use people efficiently within constraints Provide reasonable quality of work life © 1995 Corel Corp.

People & Work Systems Constraints People & Work Design Product strategy Process strategy Location strategy Layout strategy Schedules Individual differences © 1995 Corel Corp.

People & Work Systems Aspects Job Design Labor Standards

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

Job Design Components Labor specialization Job expansion Psychological components Self-directed teams Motivation & incentive systems Ergonomics & work methods

Labor Specialization Involves First noted by Adam Smith (1876) Breaking jobs into small component parts Assigning specialists to do each part First noted by Adam Smith (1876) Observed how workers in pin factory divided tasks into smaller components Found in manufacturing & service industries © 1995 Corel Corp.

Labor Specialization Often Reduces Costs Greater dexterity & faster learning Less lost time changing jobs or tools Using more specialized tools Paying only for needed skills

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

Job Expansion Constraints Higher capital cost Workers’ preferences Example: Some people prefer simple jobs Higher wages required Smaller labor pool Increased accident rates Lack of technology

Psychological Components Individuals have values, attitudes, & 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’

Hawthorne Studies Conducted in late 1920’s General Electric Hawthorne plant Showed the importance of the individual in the workplace Showed the presence of a social system in the workplace

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

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

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)

Motivation Worker performance depends on Ability Work environment Motivation is the set of forces that compel behavior Money may serve as a psychological & financial motivator

Motivation & Money Taylor’s scientific management (1911) Workers are motivated mainly by money Suggested piece-rate system Maslow’s theory (1943) People are motivated by sequence of needs, which includes money Herzberg (1959) Money either dissatisfies or is neutral in its effect

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 reduct.) Incentive systems Measured daywork: Pay based on std. time Piece rate: Pay based on pieces done

Ergonomics & Work Methods Worker performance depends on Motivation Ability Work environment Foundation laid by Frederick Taylor Match employees to task Develop work methods Establish work standards

Ergonomics Study of work Also called ‘human factors’ Involves human-machine interface Examples Mouse Keyboard

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)

Conclusion Defined job design Described job design components Explained motivation theories & studies