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 Operations Management Human Resources and Job Design Chapter 10

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 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

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 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

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 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

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 Learning Objectives - Continued When you complete this chapter, you should be able to : Describe or explain:  Requirements of good job design  The visual workplace

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 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

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 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!

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 Objective of Human Resource Strategy To manage labor and design jobs so people are effectively and efficiently utilized

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

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 Constraints on Human Resource Strategy Product strategy - Skills needed - Talents needed - Materials used - Safety Location strategy - Climate - Temperature - Noise - Light - Air quality Schedule - Time of day - Time of year (seasonal) - Stability of schedules Individual differences - Strength and fatigue - Information processing and response Layout strategy - Fixed position - Process - Assembly line - Work cell - Product Process strategy - Technology - Machinery and equipment used - Safety Human Resource Strategy What Where How Who Procedure When

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 People and Work System Aspects Job Design Labor Standards

12. 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 10-12 Labor Planning/Stability Policies  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

13. 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 10-13 Productivity in Relation to Annual Turnover Rate

14. 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 10-14 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.

15. 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 10-15 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

16. 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 10-16 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

17. 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 10-17 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

18. 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 10-18 Components of Job Design  Job specialization  Job expansion  Psychological components  Self-directed teams  Motivation and incentive systems  Ergonomics and work methods

19. 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 10-19 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.

20. 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 10-20  Greater dexterity & faster learning  Less lost time changing jobs or tools  Use of more specialized tools  Pay only for needed skills Job Specialization Often Reduces Cost

21. 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 10-21 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

22. 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 10-22 Job Enlargement/Job Enrichment Present Job Control Planning Enriched Job Task #3 Task #2 Enlarged Job

23. 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 10-23 Job Enlargement/Job Enrichment Present job Manually insert and solder six resistors Task #3 Lock printed circuit into fixture for next operation Task #2 Adhere labels to printed circuit board Control Test circuits after assembly Planning Participate in a cross- function quality- improvement team Enriched job Enlarged job

24. 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 10-24 Job Rotation Geriatrics © 1995 Corel Corp. Pediatrics © 1995 Corel Corp. Maternity © 1995 Corel Corp.

25. 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 10-25 Employee Empowerment Control Decision-Making Planning

26. 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 10-26 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’

27. 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 10-27 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

28. 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 10-28  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

29. 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 10-29  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

30. 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 10-30 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)

31. 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 10-31 Job Design Continuum Increasing reliance on employees’ contribution and increasing acceptance of responsibility by employee Specialization Enlargement Enrichment Empowerment Self-directed Teams Job Expansion

32. 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 10-32 Core Job Characteristics  Skill variety  Job identify  Job significance  Autonomy  Feedback

33. 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 10-33  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 Limitations to Job Enlargement/Job Enrichment

34. 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 10-34 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

35. 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 10-35 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

36. 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 10-36 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

37. 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 10-37 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

38. 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 10-38 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)

39. 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 10-39 Job Characteristics  Motivation  Satisfaction  Job performance  Absenteeism & turnover Core Job Characteristics Psychological States Personal & Work Outcomes Hackman & Oldham

40. 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 10-40 Ergonomics and 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

41. 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 10-41 Ergonomics  Study of work  Also called ‘human factors’  Involves human-machine interface  Examples  Mouse  Keyboard

42. 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 10-42 Recommended Levels of Illumination

43. 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 10-43 Decibel levels for Various Sounds

44. 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 10-44 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)

45. 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 10-45 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)

46. 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 10-46 Process Chart

47. 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 10-47 Flow Diagram Buyer You 75 ft.

48. 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 10-48 Flow Diagram and Process Chart of Axle-Stand Production Line

49. 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 10-49 Activity Chart for Two-Person Oil-Change Crew

50. 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 10-50 Operations Chart (Left Hand/Right Hand)

51. 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 10-51 Activity Chart Subject: Semi-Auto Machine OperatorMachineTime 1 2 3 4 5 6 Load machineBeing loaded Idle Run Unload Being Unloaded Present

52. 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 10-52 The Visual Workplace  Uses low-cost visual devices to share information quickly and accurately.  Displays and graphs replace paper  Provides real-time information  System should focus on improvement, not merely monitoring  Can provide both production and financial data

53. 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 10-53 The Visual Workplace

54. 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 10-54 What is Work Measurement?  Determining the amount of worker time required to generate one unit of output  Provides labor standards  Target amount of time required to perform a job under normal working conditions

55. 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 10-55 Uses of Labor Standards  Costing labor content of products  Planning staffing needs  Cost & time estimates for bids  Planning production  Wage-incentive plans  Employee efficiency

56. 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 10-56 Sources of Labor Standards  Historical experience  Time studies  Predetermined time standards (MTM)  Work sampling

57. 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 10-57 Labor Standards - 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.

58. 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 10-58 A Final Thought © 1995 Corel Corp. Church of the Holy Family (Barcelona) Two stonecutters were asked what they were doing. The first said, ‘I’m cutting this stone into blocks.’ The second one replied, ‘I’m on a team that’s building a cathedral.’ — Old Story