1. CHAPTER 6: DESIGN & REDESIGN OF WORK SYSTEMS Copyright © 2005 South-Western. All rights reserved.

2. 1–21–2 Exhibit 6-1 Model for Design of Work Systems

3. Copyright © 2005 South-Western. All rights reserved.1–31–3 Design of Work Systems Job SpecializationJob Specialization –Creates jobs with very narrow task (activity) assignments –Resulted in high efficiency, quickly achieved job competency, low training costs, but created monotonous jobs Job EnlargementJob Enlargement –An increase in task variety to relieve boredom Job RotationJob Rotation –Employees moved across different specialized positions –Enlargement & rotation add variety but not necessarily responsibility Job SpecializationJob Specialization –Creates jobs with very narrow task (activity) assignments –Resulted in high efficiency, quickly achieved job competency, low training costs, but created monotonous jobs Job EnlargementJob Enlargement –An increase in task variety to relieve boredom Job RotationJob Rotation –Employees moved across different specialized positions –Enlargement & rotation add variety but not necessarily responsibility

4. Copyright © 2005 South-Western. All rights reserved.1–41–4 Design of Work Systems Job EnrichmentJob Enrichment –Increasing amount of responsibility for quality & productivity that employees have for their own work Vertical LoadingVertical Loading –Reassignment of job responsibility formerly delegated to supervisor to employee Job EnrichmentJob Enrichment –Increasing amount of responsibility for quality & productivity that employees have for their own work Vertical LoadingVertical Loading –Reassignment of job responsibility formerly delegated to supervisor to employee

5. Copyright © 2005 South-Western. All rights reserved.1–51–5 Five Core Job Characteristics Skill varietySkill variety –Extent to which work allows employee to use variety of skills Task identityTask identity –Extent to which work allows employee to complete whole or identifiable piece of work Task significanceTask significance –Extent to which employee perceives that work is important & meaningful to those inside or outside organization Skill varietySkill variety –Extent to which work allows employee to use variety of skills Task identityTask identity –Extent to which work allows employee to complete whole or identifiable piece of work Task significanceTask significance –Extent to which employee perceives that work is important & meaningful to those inside or outside organization AutonomyAutonomy –Extent to which employee is able to work & determine work procedure at own discretion FeedbackFeedback –Extent to which work allows employee to gain sense of how well job responsibilities are met

6. Copyright © 2005 South-Western. All rights reserved.1–61–6 Exhibit 6-2 Job Characteristics Model

7. Copyright © 2005 South-Western. All rights reserved.1–71–7 What Workers Need Changing demographics & life stylesChanging demographics & life styles –Worker needs vary by age, gender, race, religion, physical abilities, sexual orientation, & marital & family status Employee needs for work/life balanceEmployee needs for work/life balance –Workers less committed to organizations today –Also suffer from burnout & lower performance Changing demographics & life stylesChanging demographics & life styles –Worker needs vary by age, gender, race, religion, physical abilities, sexual orientation, & marital & family status Employee needs for work/life balanceEmployee needs for work/life balance –Workers less committed to organizations today –Also suffer from burnout & lower performance Employee needs representation (“voice”)Employee needs representation (“voice”) –Workers want to be involved in work-related issues & expect organization to listen to concerns Employee concerns about safety in workplaceEmployee concerns about safety in workplace –Workers want safe, hazard- free working environment

8. Copyright © 2005 South-Western. All rights reserved.1–81–8 Types of Task Interdependence Pooled interdependencePooled interdependence –Individual employees work independently of each other in performing tasks but utilize coordination of activities Sequential interdependenceSequential interdependence –Work in process flow is linear, from one individual to another –One individual depends on timely completion of quality work from another coworker Pooled interdependencePooled interdependence –Individual employees work independently of each other in performing tasks but utilize coordination of activities Sequential interdependenceSequential interdependence –Work in process flow is linear, from one individual to another –One individual depends on timely completion of quality work from another coworker Reciprocal interdependenceReciprocal interdependence –Workflow is random –Responds to immediate situation –Employees have joint & shared responsibilities for work Higher levels of interdependence require higher levels of coordination & attentionHigher levels of interdependence require higher levels of coordination & attention

9. Copyright © 2005 South-Western. All rights reserved.1–91–9 Redesign of Work Systems Current & future work systems more broadly defined & more closely related to strategic choicesCurrent & future work systems more broadly defined & more closely related to strategic choices Workers becoming more involved in design & reengineering of jobsWorkers becoming more involved in design & reengineering of jobs Cross-function teams strategically beneficialCross-function teams strategically beneficial –Also create challenges in effectively managing themselves Employees raised in individualistic cultures need training to be effective team membersEmployees raised in individualistic cultures need training to be effective team members Current & future work systems more broadly defined & more closely related to strategic choicesCurrent & future work systems more broadly defined & more closely related to strategic choices Workers becoming more involved in design & reengineering of jobsWorkers becoming more involved in design & reengineering of jobs Cross-function teams strategically beneficialCross-function teams strategically beneficial –Also create challenges in effectively managing themselves Employees raised in individualistic cultures need training to be effective team membersEmployees raised in individualistic cultures need training to be effective team members

10. Copyright © 2005 South-Western. All rights reserved.1–10 OutsourcingOutsourcing Involves contracting out some of organization’s noncore work activities to outside specialistsInvolves contracting out some of organization’s noncore work activities to outside specialists –Can do work more effectively –Often for less than cost of doing work in-house Areas frequently outsourced:Areas frequently outsourced: –Payroll –Benefits –Technological support More than 75% of organizations outsource at least one HR functionMore than 75% of organizations outsource at least one HR function Involves contracting out some of organization’s noncore work activities to outside specialistsInvolves contracting out some of organization’s noncore work activities to outside specialists –Can do work more effectively –Often for less than cost of doing work in-house Areas frequently outsourced:Areas frequently outsourced: –Payroll –Benefits –Technological support More than 75% of organizations outsource at least one HR functionMore than 75% of organizations outsource at least one HR function

11. Copyright © 2005 South-Western. All rights reserved.1–11 OutsourcingOutsourcing Can free up HR staff to focus on more strategic issuesCan free up HR staff to focus on more strategic issues Considerations:Considerations: –Cost savings –Whether contractor can deliver –Compliance with laws –Impacts on employees whose jobs might be lost –Impacts on morale of remaining employees Can free up HR staff to focus on more strategic issuesCan free up HR staff to focus on more strategic issues Considerations:Considerations: –Cost savings –Whether contractor can deliver –Compliance with laws –Impacts on employees whose jobs might be lost –Impacts on morale of remaining employees

12. Copyright © 2005 South-Western. All rights reserved.1–12 OffshoringOffshoring Involves exporting tasks & jobs to countries where labor costs significantly less than in U.S.Involves exporting tasks & jobs to countries where labor costs significantly less than in U.S. India remains largest marketIndia remains largest market Wages approximately 10% of those paid in U.S.Wages approximately 10% of those paid in U.S. –Often considered good by local standards Challenge of managing virtual global teamsChallenge of managing virtual global teams Need for tight organizational & operational control to ensure coordination & communicationNeed for tight organizational & operational control to ensure coordination & communication Involves exporting tasks & jobs to countries where labor costs significantly less than in U.S.Involves exporting tasks & jobs to countries where labor costs significantly less than in U.S. India remains largest marketIndia remains largest market Wages approximately 10% of those paid in U.S.Wages approximately 10% of those paid in U.S. –Often considered good by local standards Challenge of managing virtual global teamsChallenge of managing virtual global teams Need for tight organizational & operational control to ensure coordination & communicationNeed for tight organizational & operational control to ensure coordination & communication

13. Copyright © 2005 South-Western. All rights reserved.1–13 OffshoringOffshoring AdvantagesAdvantages –Cost savings –Extend work day to 24 hours AdvantagesAdvantages –Cost savings –Extend work day to 24 hours DisadvantagesDisadvantages –Loss of domestic jobs –Transfer of technical knowledge –Public image/loyalty concerns

14. Copyright © 2005 South-Western. All rights reserved.1–14 Mergers & Acquisitions Mergers pursued for a variety of reasons:Mergers pursued for a variety of reasons: –Economies of scale in operations –Consolidation in saturated markets –Improving competitive position through larger asset base Two thirds of mergers failTwo thirds of mergers fail –Largely because of inability to merge cultural & other human factors Mergers pursued for a variety of reasons:Mergers pursued for a variety of reasons: –Economies of scale in operations –Consolidation in saturated markets –Improving competitive position through larger asset base Two thirds of mergers failTwo thirds of mergers fail –Largely because of inability to merge cultural & other human factors

15. Copyright © 2005 South-Western. All rights reserved.1–15 Barriers to Change Disrupting status quo may be met with resistance by both employees and managersDisrupting status quo may be met with resistance by both employees and managers Costs & reallocation of resourcesCosts & reallocation of resources Employees will resist change unless theyEmployees will resist change unless they –Perceive need to change –See benefits from change Risk & uncertainty; no guarantee of improvementsRisk & uncertainty; no guarantee of improvements Poor coordination & communication can undermine change initiativesPoor coordination & communication can undermine change initiatives Disrupting status quo may be met with resistance by both employees and managersDisrupting status quo may be met with resistance by both employees and managers Costs & reallocation of resourcesCosts & reallocation of resources Employees will resist change unless theyEmployees will resist change unless they –Perceive need to change –See benefits from change Risk & uncertainty; no guarantee of improvementsRisk & uncertainty; no guarantee of improvements Poor coordination & communication can undermine change initiativesPoor coordination & communication can undermine change initiatives

16. Copyright © 2005 South-Western. All rights reserved.1–16 To Overcome Resistance to Change Promote & implement change so it provides benefits to those impactedPromote & implement change so it provides benefits to those impacted Involve employees in change process to increase their commitment to changeInvolve employees in change process to increase their commitment to change Open, two-way communicationOpen, two-way communication –Early before change decisions are made –Dispel rumors –Increase trust & acceptance of change by keeping employees informed & asking for input Promote & implement change so it provides benefits to those impactedPromote & implement change so it provides benefits to those impacted Involve employees in change process to increase their commitment to changeInvolve employees in change process to increase their commitment to change Open, two-way communicationOpen, two-way communication –Early before change decisions are made –Dispel rumors –Increase trust & acceptance of change by keeping employees informed & asking for input

17. Copyright © 2005 South-Western. All rights reserved.1–17 Reading 6.1 Restructuring Teams for Re-engineered Organizations Reasons for using teams in organizations:Reasons for using teams in organizations: –Unlikely one individual will have all of knowledge & information needed to make complex decisions –Teams provide more “buy-in” to decisions –Managers believe teams enhance motivation & productivity –Facilitate acquisition & sharing of information vital to organizational growth and flexibility –Facilitate variety of internal quality control initiatives Reasons for using teams in organizations:Reasons for using teams in organizations: –Unlikely one individual will have all of knowledge & information needed to make complex decisions –Teams provide more “buy-in” to decisions –Managers believe teams enhance motivation & productivity –Facilitate acquisition & sharing of information vital to organizational growth and flexibility –Facilitate variety of internal quality control initiatives

18. Copyright © 2005 South-Western. All rights reserved.1–18 Reading 6.1 Restructuring Teams for Re-engineered Organizations Problems with teamsProblems with teams –May fail without proper training & support –Often poorly integrated into organization’s hierarchy –Individuals often feel their team contributions dilute personal success –Few teams have found effective means to deal with “freeloaders” –Usually not represented at top levels of organizations, sending a mixed message about their importance Problems with teamsProblems with teams –May fail without proper training & support –Often poorly integrated into organization’s hierarchy –Individuals often feel their team contributions dilute personal success –Few teams have found effective means to deal with “freeloaders” –Usually not represented at top levels of organizations, sending a mixed message about their importance

19. Copyright © 2005 South-Western. All rights reserved.1–19 Reading 6.1 Restructuring Teams for Re-engineered Organizations U.S. & Japanese culture differencesU.S. & Japanese culture differences –Individualism versus collectivism –Conflict & conformity –Power & authority –Time orientation –Cultural & demographic homogeneity U.S. & Japanese culture differencesU.S. & Japanese culture differences –Individualism versus collectivism –Conflict & conformity –Power & authority –Time orientation –Cultural & demographic homogeneity

20. Copyright © 2005 South-Western. All rights reserved.1–20 Reading 6.1 Restructuring Teams for Re-engineered Organizations Three keys to successful teamsThree keys to successful teams –Value & endorse dissent –Encourage fluidity of membership –Enable teams to make decisions Three keys to successful teamsThree keys to successful teams –Value & endorse dissent –Encourage fluidity of membership –Enable teams to make decisions

21. Copyright © 2005 South-Western. All rights reserved.1–21 Figure 1 Three Key Elements for Success of US Teams

22. Copyright © 2005 South-Western. All rights reserved.1–22 Figure 2 Team Development Model

23. Copyright © 2005 South-Western. All rights reserved.1–23 Reading 6.2 HRM Outsourcing: Make or Buy Decision Five competitive forces driving organizations to outsource HR activities:Five competitive forces driving organizations to outsource HR activities: –Downsizing –Rapid growth or decline –Globalization –Increased competition –Restructuring Five competitive forces driving organizations to outsource HR activities:Five competitive forces driving organizations to outsource HR activities: –Downsizing –Rapid growth or decline –Globalization –Increased competition –Restructuring

24. Copyright © 2005 South-Western. All rights reserved.1–24 Reading 6.2 HRM Outsourcing: Make or Buy Decision Operational rationales for outsourcingOperational rationales for outsourcing –Small firms lack resources; large firms gain economies of scale –Specialized HR expertise & objectivity Reduced liability & risk in legally sensitive HR areasReduced liability & risk in legally sensitive HR areas –Innovations & economies of scale in HRIS technology used by outside vendors Simplify transactionsSimplify transactions Reduce HR costsReduce HR costs Operational rationales for outsourcingOperational rationales for outsourcing –Small firms lack resources; large firms gain economies of scale –Specialized HR expertise & objectivity Reduced liability & risk in legally sensitive HR areasReduced liability & risk in legally sensitive HR areas –Innovations & economies of scale in HRIS technology used by outside vendors Simplify transactionsSimplify transactions Reduce HR costsReduce HR costs

25. Copyright © 2005 South-Western. All rights reserved.1–25 Reading 6.2 HRM Outsourcing: Make or Buy Decision Operational rationales for outsourcing (continued):Operational rationales for outsourcing (continued): –Time-sensitive issues better handled by outsourcing –Temporary or cyclical increases in HR needs –Efficient vendor management practices drive costs down more than economies of scale –Specialized vendors offer activities as their core business & strategic focus Operational rationales for outsourcing (continued):Operational rationales for outsourcing (continued): –Time-sensitive issues better handled by outsourcing –Temporary or cyclical increases in HR needs –Efficient vendor management practices drive costs down more than economies of scale –Specialized vendors offer activities as their core business & strategic focus

26. Copyright © 2005 South-Western. All rights reserved.1–26 Reading 6.2 HRM Outsourcing: Make or Buy Decision Strategic rationales for outsourcing:Strategic rationales for outsourcing: –Outsourcing nonstrategic activities permits HR to move away from administration toward strategic role –Decentralization of HR function through redeployment of some of assets to operating units –Develop less bureaucratic HR departments –Downsizing may require HR to reduce staff, eliminating specialized in-house expertise –Outsourcing provides “big picture” perspective Strategic rationales for outsourcing:Strategic rationales for outsourcing: –Outsourcing nonstrategic activities permits HR to move away from administration toward strategic role –Decentralization of HR function through redeployment of some of assets to operating units –Develop less bureaucratic HR departments –Downsizing may require HR to reduce staff, eliminating specialized in-house expertise –Outsourcing provides “big picture” perspective

27. Copyright © 2005 South-Western. All rights reserved.1–27 Reading 6.2 HRM Outsourcing: Make or Buy Decision Positive outcomesPositive outcomes –Lower HR costs –Higher service quality –Realignment or redeployment of internal HR expertise –Development of negotiation & broker skills –Enhanced credibility of HR function –Risk & uncertainty absorption by HR vendor Positive outcomesPositive outcomes –Lower HR costs –Higher service quality –Realignment or redeployment of internal HR expertise –Development of negotiation & broker skills –Enhanced credibility of HR function –Risk & uncertainty absorption by HR vendor

28. Copyright © 2005 South-Western. All rights reserved.1–28 Reading 6.2 HRM Outsourcing: Make or Buy Decision Negative outcomesNegative outcomes –Significant cost savings not always experienced –Vendor switching costs –Long-term vendor contracts –Disruption of firm’s culture –Removal or distancing of HR function from employees Negative outcomesNegative outcomes –Significant cost savings not always experienced –Vendor switching costs –Long-term vendor contracts –Disruption of firm’s culture –Removal or distancing of HR function from employees

29. Copyright © 2005 South-Western. All rights reserved.1–29 Reading 6.3 Productivity in Downsizing Many downsizing firms face immediate challenge of keeping operations going with minimal staffMany downsizing firms face immediate challenge of keeping operations going with minimal staff Productivity often declinesProductivity often declines SurvivorsSurvivors –Working more hours –Receive with bigger workload Morale often plummetsMorale often plummets Many downsizing firms face immediate challenge of keeping operations going with minimal staffMany downsizing firms face immediate challenge of keeping operations going with minimal staff Productivity often declinesProductivity often declines SurvivorsSurvivors –Working more hours –Receive with bigger workload Morale often plummetsMorale often plummets

30. Copyright © 2005 South-Western. All rights reserved.1–30 Reading 6.3 Work Redesign Typical problemsTypical problems –Failure or inability to identify & categorize duties & assignments –Failure to identify when employee is over- tasked –Failure to see when business unit’s demands exceed its capacity Typical problemsTypical problems –Failure or inability to identify & categorize duties & assignments –Failure to identify when employee is over- tasked –Failure to see when business unit’s demands exceed its capacity

31. Copyright © 2005 South-Western. All rights reserved.1–31 Reading 6.3 Work Redesign: Task Categories Critical tasksCritical tasks –Enable company to accomplish primary objectives Sub-critical tasksSub-critical tasks –Need to be performed, but average standard of quality will suffice Critical tasksCritical tasks –Enable company to accomplish primary objectives Sub-critical tasksSub-critical tasks –Need to be performed, but average standard of quality will suffice Minor tasksMinor tasks –Add value to firm but will not hinder operations or goals if left undone Unnecessary tasksUnnecessary tasks –Can be discarded because they drain resources

32. Copyright © 2005 South-Western. All rights reserved.1–32 Reading 6.3 Work Redesign Output from work categorization process must be shared with all employees so they have list of tasks for which they are accountableOutput from work categorization process must be shared with all employees so they have list of tasks for which they are accountable These tasks are used to drive performance management processThese tasks are used to drive performance management process Output from work categorization process must be shared with all employees so they have list of tasks for which they are accountableOutput from work categorization process must be shared with all employees so they have list of tasks for which they are accountable These tasks are used to drive performance management processThese tasks are used to drive performance management process