1. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-1 Employee Empowerment Control Decision-Making Planning

2. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-2 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’

3. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-3 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

4. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-4  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: Workplace Lighting

5. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-5  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 Hawthorne Studies: Piecework Pay

6. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-6 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

7. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-7 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

8. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-8 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

9. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-9 Maslow’s Hierarchy of Needs Self-Actualization Use of abilities Self-fulfillment Social Group Interaction Job Status Safety Physical Safety Job Security Physiology Food Shelter Ego Self Respect

10. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-10 Herzberg’s Motivation/Hygiene Factors ©Achievement ©Recognition ©Advancement ©Work itself ©Responsibility ©Personal growth ©Company policies and administration ©Supervision - technical ©Working conditions ©Interpersonal relations - supervision ©Status ©Job security ©Salary Job Dissatisfiers (Hygiene) Job Satisfiers (Motivators)

11. Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc., Upper Saddle River, N.J. 07458 10-11 Job Characteristics  Motivation  Satisfaction  Job performance  Absenteeism & turnover Core Job Characteristics Psychological States Personal & Work Outcomes Hackman & Oldham