Human Resource and Job Design

Human Resource Strategy for Competitive Advantage
The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized. As we focus on human resource strategy, we want to ensure that people: 1. Are efficiently utilized within the constraints of other operation management decisions. 2. Have a reasonable quality of work life in an atmosphere of mutual commitment and trust.
By reasonable quality work of life we mean a job that is not only reasonably safe and for which the pay is equitable but that also achieves an appropriate level of both physical and psychological requirements. Mutual commitment means that both management and employee strive to meet common objectives. Mutual trust is reflected in reasonable, documented employment policies that are honestly and equitably implemented to the satisfaction of both management and employee. When management has genuine respect for its employees and their contributions to the firm, establishing a reasonable quality of work life and mutual trust is not particularly difficult.

Constraints on Human Resource Strategy

HUMAN RESOURCE STRATEGY

Product strategy
Skills needed
Talents needed
Materials used
Safety

What

Schedules
Time of day
Time of year
(seasonal)
Stability of schedules

When

Location strategy
Climate
Temperature
Noise
Light
Air quality

Where

Process strategy
Technology
Machinery and equipment used
Safety

Procedure

Individual differences
Strength and fatigue
Information processing and response

Who

Layout strategy
Fixed position
Process
Assembly line
Work cell
Product

How

Labor Planning
Employment Stability Policies 1. Follow demand exactly * Matches direct labor costs to production * Incurs costs in hiring and termination, unemployment insurance, and premium wages * Labor is treated as a variable cost 2. Hold employment constant * Maintains trained workforce * Minimizes hiring, termination, and unemployment costs * Employees may be underutilized during slack periods * Labor is treated as a fixed cost

Work Schedules
Standard work schedule * Five eight-hour days
Flex-time
* Allows employees, within limits, to determine their own schedules
Flexible work week * Fewer but longer days
Part-time
* Fewer, possibly irregular, hours

Job Classification and Work Rules * Specify who can do what * Specify when they can do it * Specify under what conditions they can do it * Often result of union contracts * Restricts flexibility in assignments and consequently efficiency of production

Job Design * Specifying the tasks that constitute a job for an individual or a group 1. Job specialization 2. Job expansion 3. Psychological components 4. Self-directed teams 5. Motivation and incentive systems

Labor Specialization * The division of labor into unique tasks * First suggested by Adam Smith in 1776 1. Development of dexterity 2. Less loss of time 3. Development of specialized tools * Later Charles Babbage (1832) added another consideration 4. Wages exactly fit the required skill required

Job Expansion * Adding more variety to jobs * Intended to reduce boredom associated with labor specialization * Job enlargement * Job rotation * Job enrichment * Employee empowerment

Job Enlargement

Task #3
(Lock printed circuit board into fixture for next operation)
Present job
(Manually insert and solder six resistors)
Task #2
(Adhere labels to printed circuit board)
Enlarged job

Enriched job
Planning
(Participate in a cross-function quality improvement team)
Control
(Test circuits after assembly)

Psychological Components of Job Design
Human resource strategy requires consideration of the psychological components of job design

Hawthorne Studies * They studied light levels, but discovered productivity improvement was independent from lighting levels * Introduced psychology into the workplace * The workplace social system and distinct roles played by individuals may be more important than physical factors * Individual differences may be dominant in job expectation and contribution

Core Job Characteristic
Jobs should include the following characteristics 1. Skill variety 2. Job identity 3. Job significance 4. Autonomy 5. Feedback

Specialization
Enlargement
Self-directed teams
Empowerment
Enrichment

Job Design Continuum
Job expansion
Se
l f -
D
i r e c t i o n Self – Directed Teams * Group of empowered individuals working together to reach a common goal * May be organized for long-term or short-term objectives * Effective because * Provide employee empowerment * Ensure core job characteristics * Meet individual psychological needs
To maximize effectiveness, managers should * Ensure those who have legitimate contributions are on the team * Provide management support * Ensure the necessary training * Endorse clear objectives and goals * Financial and non-financial rewards * Supervisors must release control

Benefits of Teams and Expanded Job Designs * Improved quality of work life * Improved job satisfaction * Increased motivation * Allows employees to accept more responsibility * Improved productivity and quality * Reduced turnover and absenteeism
Limitations of Job Expansion 1. Higher capital cost 2. Individuals may prefer simple jobs 3. Higher wages rates for greater skills 4. Smaller labor pool 5. Higher training costs
Motivation and Incentive Systems * Bonuses - cash or stock options * Profit-sharing - profits for distribution to employees * Gain sharing - rewards for improvements * Incentive plans - typically based on production rates * Knowledge-based systems - reward for knowledge or skills
Ergonomics and the Work Environment * Ergonomics is the study of the interface between man and machine * Often called human factors * Operator input to machines

Ergonomics and Work Methods * Feedback to operators * The work environment * Illumination * Noise * Temperature * Humidity

Methods of Analysis * Focuses on how task is performed * Used to analyze 1. Movement of individuals or material * Flow diagrams and process charts 2. Activities of human and machine and crew activity * Activity charts 3. Body movement * Operations charts
The Visual Workplace * Use low-cost visual devices to share information quickly and accurately * Displays and graphs replace printouts and paperwork * Able to provide timely information in a dynamic environment * System should focus on improvement

Visual signals can take many forms and serve many functions * Present the big picture * Performance * Housekeeping
Labor Standards * Effective manpower planning is dependent on a knowledge of the labor required * Labor standards are the amount of time required to perform a job or part of a job * Accurate labor standards help determine labor requirements, costs, and fair work * Started early in the 20th century * Important to both manufacturing and service organizations * Necessary for determining staffing requirements * Important to labor incentive systems

Meaningful Standards Help Determine 1. Labor content of items produced 2. Staffing needs 3. Cost and time estimates 4. Crew size and work balance 5. Expected production 6. Basis of wage incentive plans 7. Efficiency of employees

Labor Standards
May be set in four ways: 1. Historical experience 2. Time studies 3. Predetermined time standards 4. Work sampling

Historical Experience * How the task was performed last time * Easy and inexpensive * Data available from production records or time cards * Data is not objective and may be inaccurate * Not recommended
Time Studies * Involves timing a sample of a worker’s performance and using it to set a standard * Requires trained and experienced observers * Cannot be set before the work is performed
Rest Allowances * Personal time allowance * 4% - 7% of total time for use of restroom, water fountain, etc. * Delay allowance * Based upon actual delays that occur * Fatigue allowance * Based on our knowledge of human energy expenditure
New Tools * With PDA software, you can study elements, time, performance rate, and statistical confidence intervals can be created, edited, managed, and logged * Reduces or eliminates the need for data entry

Predetermined Time Standards * Divide manual work into small basic elements that have established times * Can be done in a laboratory away from the actual production operation * Can be set before the work is actually performed * No performance ratings are necessary

Work Sampling * Estimates percent of time a worker spends on various tasks * Requires random observations to record worker activity * Determines how employees allocate their time * Can be used to set staffing levels, reassign duties, estimate costs, and set delay allowances

Advantages of Work Sampling * Less expensive than time study * Observers need little training * Studies can be delayed or interrupted with little impact on results * Worker has little chance to affect results * Less intrusive
Disadvantages of Work Sampling * Does not divide work elements as completely as time study * Can yield biased results if observer does not follow random pattern * Less accurate, especially when job element times are short

Ethics and the Work Environment * Fairness, equity, and ethics are important constraints of job design * Important issues may relate to equal opportunity, equal pay for equal work, and safe working conditions * Helpful to work with government agencies, trade unions, insurers, and employees