Chapter 11 Work System Design Operations Management by

Chapter 11 – Work System Design Operations Management by R. Dan Reid & Nada R. Sanders 2 nd Edition © Wiley 2005

Work System Design n n Designing a work system is part of developing an operations strategy The work system includes: n Job design n Work measurements n Worker compensation

Job Design n n Definition: specification of the work activities for an individual or group within an organizational setting. Behavioral factors: n n n Degree of labor specialization (advantages, disadvantages). Job enlargement (vertical/horizontal) and job enrichment. Physical considerations: n Work-task continuum.

Job Design Feasibility Issues n Technical feasibility: n n Economic feasibility: n n Whether the job is within physical & mental capabilities of the workforce Whether the cost of performing the job is less than its added value Behavioral feasibility: n Whether the job is intrinsically satisfying

Job Design (Trends) n n n n Quality at the source. Cross-training—multi-functional workers. Employee involvement/creation of teams. Feedback systems. Outsourcing tasks. Automation Meaningful/rewarding jobs.

Workplace Changes n Labor/organizational changes. n n More technology, fewer workers and organizational layers. Increased employee involvement. Composition (gender/ethnic diversity). Thus, managers have different roles. n Mentors or coaches rather than “bosses. ”

Employee Empowerment n n n Assume roles once owned by managers. Increases employee motivation and hence productivity. Managers must share: n n Organizational performance information. Rewards (based on organizational performance). Knowledge/expertise needed to enhance organizational performance. Decision-making power.

Involvement n n Increases trust and commitment Improves employee communications and attitudes Involved employees are more likely to generate new ideas Involved employees achieve a higher quality of work life which generates higher levels of commitment leading to higher productivity

Approaches to Involving Employees n n Must be long-term, ongoing attempts Communications efforts n n n feedback “bottom-up” communications attitude survey feedback suggestion systems team building and quality circles

Teamwork n n Teams often outperform individuals. Self-managed teams have been found to increase organizational performance. n Responsible for many managerial actions: n n n Work assignments. Work pace. Quality assessment. Hiring/firing. Cross-functional work teams (projects, committees).

Use of Teams n Problem-solving teams: n n Special-purpose task forces: n n Small groups, trained in problem-solving techniques. Used to identify, analyze, & propose solutions to workplace problems Highly-focused, short-term teams with a focused agenda (often cross-functional) Self-directed or self-managed teams: n Team members work through consensus to plan, mange, & control their assigned work flow

QWL: Definition II n n “Quality of work life emphasizes improving the human dimension of work. ” HR should try to improve QWL “by: n n n introducing participative problem solving, restructuring work, introducing innovative reward systems, improving the work environment. ” [Source: Wheelen and Hunger, 2000, p. 99]

Work/Life Issues: State of Utah Dept. of Workforce Services n “Successful work/life programs can have a tremendous bottom-line business impact by: n n n n Reducing turnover. Enhancing recruitment. Reducing absenteeism. Improving retention. Improving productivity. improving morale. Strengthening employee commitment.

Work/Life Elements n n n n n Child care. Elder care. Employer efforts. Health & wellness. Parenting/fathering. Recruiting/retention Telecommuting. The workplace. Work/life balance. [Source: http: //occ. dws. state. ut. us/Work. Life/dwsdefault. asp]

Work-task Continuum

Job Characteristics Theory (Hackman and Oldham, 1976) n Critical Psychological States: n n experience meaningfulness of the work experience responsibility for work outcomes knowledge of results Core task dimensions n n n skill variety task identity task significance autonomy feedback

Automation: Factors to Consider n n n Safety & risk of injury to workers Repetitive nature of the task (monotonous? ) Degree of precision required Complexity of the task Need for empathy, compassion, or other emotional elements Customer acceptance of automation

Management’s View of Labor Specialization n n Advantages: Minimal training required Reasonable wages costs High productivity Readily available labor n n Disadvantages: High absenteeism High turnover rates High scrap rates High number of employee grievances filed

Employee’s View of Labor Specialization n n Advantages: n Minimal credentials n required Minimal responsibilities n Minimal mental effort n n needed Reasonable wages Disadvantages: Boredom Little growth opportunity Little control over work Little room for initiative Little intrinsic satisfaction

Eliminating Employee Boredom n Job enlargement n n n Job enrichment n n n Horizontal expansion of the job by increasing the scope of the work assigned Enhances pride of work and sense of accomplishment, but reduces productivity Vertical expansion of the job by increased worker responsibility—planning and inspecting Adds sense of control and enhances sense of pride Job rotation n n Shifting of cross trained workers to other tasks Broadens understanding and can reduce fatigue

Alternative Workplaces n Alternative workplaces are made possible by technologies like email, e-networks, cell phones, & video conferencing. Current situation: n n More than 30 million employees work in alternative workspaces A survey at IBM reveals that 87% of alternative workplace employees believe their effectiveness has increased significantly Sun Microsystems gives many of its designers the option to work at home GE sales people work from home and hotel offices

Financial Incentive Plans n n Basic compensation systems: hourly pay, straight salary, piece rate, commissions. Individual/group plans: n n n Performance is rewarded based on measures of output (similar to piece rates) and/or measures of quality. “pay for knowledge. ” Organizational plans: n n Profit sharing. Gain sharing (based on costs/outputs, participative management). n Scanlon Plan: rewards employees for organizational improvements.

Work Methods Studies n n Individual/group operations: use charting (operations charts, worker-machine charts, simultaneous motion charts, activity charts) with time studies or standard time data to analyze/evaluate work efficiency. Overall operations: identify non-valueadding (waste) and inefficient activities for process/productivity improvement

Study the Job 1. 2. 3. 4. Picks up wire in left hand moves it to the terminal Simultaneously picks up solder iron in right hand moves to the terminal Solders wire to terminal and replaces solder iron in holder Solders terminal #1, then #2 - #6, going right to left

Flowchart the Process

Importance of the Work Environment n n Working conditions can effect worker productivity, product quality, and worker safety Temperature, ventilation, noise, and lighting are all factors in work system design Congress passed OSHA in 1970 to mandate specific safety conditions that must be met The Americans with Disabilities Act also outlines reasonable workplace accommodations that industry must make in hiring people with some limitations

Work Measurement n Standard time: n n The length of time a qualified worker, using appropriate tools & procedures, will take to complete a job Standard time is used in: n n n Costing the labor component of products Tracking employee performance Scheduling & planning required resources

Setting Standard Times n Step 1: Choose the specific job to be studied n Step 2: Inform the worker of the study n n Step 3: Break the job into distinguishable elements Step 4: Calculate the number of cycles to observe Step 5: Time each element, record data & rate the worker’s performance Step 6: Compute the standard time

Doing a Time Study n When making a time study several decisions are made to assure desired results: n n n # of observations to make Desired level of accuracy Desired level of confidence for the estimated standard time Desired accuracy level is typically expressed as a % of the mean observed times In next column is a formula for determining the number of observations needed n n n: number of observations z: provides desired statistical confidence (e. g. : 1. 96 for 95%) s: observed standard deviation in time required to complete the task element a: desired accuracy or precision x-bar: the mean observed time to complete the task

Pat’s Pizza Place: Pat hires an analyst to determine a standard time to prepare a large pepperoni and cheese pizza. He takes 10 observations of the 7 elements and calculates the mean time and the standard deviation per element. He must then calculate the # of observations to be within 5% of the true mean 95% of the time. n The analyst must calculate the observations for each element to determine how many additional observations must be taken. The maximum number of 25 (in this case) for element #7 means that an additional 15 observations must be made and then the observed times are revised.

Other Time Factors Used in Calculating Standard Time n n n The normal time (NT) is the mean observed time multiplied by the performance rating factor (PRF) The PRF is a subjective estimate of a worker’s pace relative to a normal work pace The frequency of occurrence (F) is how often the element must be done each cycle. NT=(OT)(PRF)(F) The allowance factor (AF) is the amount of time allowed for personal, fatigue, and unavoidable delays Standard Time=normal time x allowance factor, where:

Calculating Normal Time and Standard Time at Pat’s Pizza n The standard time for preparing a large, hand-tossed pepperoni pizza is 2. 312 minutes. This means that a worker can prepare 207 pizzas in an 8 -hour shift (480 minutes divided by 2. 312 minutes)

Other Time Study Methods n n Elemental time data for typical work elements from previously completed time studies can be stored in a data base for use on future similar studies. Predetermined time data (e. g. MTM and MTS) is a larger database of valid work element times used to set standards for common job elements n n Reach, grasp, move, engage, insert, turn, etc. Work Sampling is a technique for estimating the proportion of time a worker spends on an activity

Work Sampling Procedure n n n Identify the worker or machine to be sampled Define the activities to be observed Estimate the sample size based on level of accuracy and confidence level Develop the random observation schedule. Make observations over a time period that is representative of normal work conditions Observe, record data, and check to see if the estimated sample size remains valid Estimate the proportion of the time spent on the given activity

n Work Sampling Example: We are interested in estimating the proportion of time spent by secretaries arranging and scheduling travel. We are considering the possibility of bringing an on site travel agency to free up secretaries from this time consuming task. We Step 1 – We need to estimate the number of observations needed to provide estimate proportion be asand high. 50. estimate will be an estimatethat withthe 97% confidencemight (z=2. 17), theas resulting within 5% of its true value. We use n n Step 2 – Based on the first 30 observations the secretary was making travel reservations 6 times (6 out of 30 observations = 0. 2). With this new estimate, recalculate the sample size needed. Final Step – After making the 302 observations, the secretary was making reservations 60 times or 19. 9%. This estimate can now be used to make the decision on savings that might result by consolidating this task with an in house travel agency

Worker Compensation Systems n n n Compensation is the third part of work system design Time-based plans (day pay) versus output-based systems (incentive pay) Group incentive plans: profit sharing & gain sharing n n Plans put part of a worker’s salary at risk Does the compensation system undermine teamwork? Does plan prevent free-riders not doing their fair share? Does the incentive plan encourage workers to support the longterm health of the organization?

Learning Curves n When the number of times the task is repeated doubles, the time per task reduces as shown in the graph n With an 85% learning curve rate, the 2 nd time a task is done will take 85% of the 1 st time. n The 4 th time will take 85% of the 2 nd n If an employee took 12 hours to complete an initial task, how long will the 16 th time take (4 th doubling) T x Ln = time required to perform a task the nth time T = the time required to perform the task the first time L = the rate of learning n = the number of times the task has doubled

Chapter 11 Highlights n n Work system design involves job design, work measurements, and worker compensation. Relevant job design issues include design feasibility, the choice of human or machine, the use of teams, and the location where the work is to be done. Methods or process analysis is concerned with how the employee does the job and is used to make improvements. Work measurement is used to determine standard times and are usually based on time studies. Standard times are used for product costing, process evaluations, and for planning workloads and staffing.

Chapter 11 Highlights n n n (Continued) Doing a time study requires breaking the job into work elements and determining the number of observations. Work sampling involves random observations of a worker to determine the proportion of time spent on each activity. Standard times are developed with time studies, elemental time data, and predetermined time data. Worker compensation systems are time-based or out-put based and can be based on individual or group performance. Learning curves show the rate of learning that occurs when an employee repeats the same task over time.

Chapter 11 Homework Hints n n n n 11. 5: calculate normal time (NT) 11. 6: use NT from 11. 5 and allowance factor—job time [AFJOB] to calculate standard time (ST) 11. 7: use the total ST from 11. 6 to calculate the number of units. 11. 8: use NT from 11. 5 and allowance factor—time worked [AFTIME WORKED] to calculate ST 11. 9: use the total ST from 11. 8 to calculate the number of units. 11. 10: check the book for help in finding “other factors” to choose between the two models calculated above. 11. 19: refer to example 11. 6 and use table 11 -9 for data to calculate the time based on the learning curve. Note that each problem is worth 5 points for a total of 35 points for the assignment.