CHAPTER FIVE

HUMAN RESOURCES AND JOB DESIGN

HUMAN RESOURCE STRATEGY FOR COMPETITIVE ADVANTAGE

Objective is to manage labor and design jobs so people are effectively and efficiently utilized. We want
to ensure that people:

1. Are sufficiently utilized within the constraints of other operations management decisions.

2. Have a reasonable quality of work life in an atmosphere of mutual commitment and trust. By
reasonable quality of work we mean a job that is not only reasonably safe and for which the pay is
equitable but 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 equitably
implemented to the satisfaction of both management and employee.

Constraints on Human Resources Strategy

1. The product mix may determine seasonality and stability of employments.

2. Technology, equipment, and processes may have implications for safety and content.

3. The location decision may have an impact on the ambient environment

in which the employees work.

4. Layout decisions, such as assembly line versus work cell, influence job content.

The three distinct decision areas of human resource strategy are:

2. Job design.

3. Labor standards.

LABOR PLANNING

This is a means of determining staffing policies dealing with employment work stability and work
schedule.

A. Employment-stability policies

1. Follow demand exactly. Following demand exactly keeps direct labor costs tied to production but
incurs other costs.

a. hiring and termination costs

b. unemployment insurance

c. premium wages to entice personnel to accept unstable employment

2. Hold employment constant. Holding employment levels constant maintains a trained work-force and
keeps hiring, termination, and unemployment costs to a minimum. The above policies are only two of
the many that can be efficient provide a reasonable quality of work life. Firms must determine policies
employment stability. Employment policies are partly determined by management's view of labor costs-
as a variable cost or a fixed cost.
B. Work schedules

A currently popular variation from a standard work schedule (five 8-hour days) is flextime. This allows
employees within limits, to determine their own schedules. This policy might allow more autonomy and
independence on the part of the employee. Some firms have found flextime a low-cost fringe benefit
that enhances job satisfaction. The problem from the OM is that much production work requires full
staffing for efficient operations.

Another option is the flexible workweek. This plan often calls for fewer but longer days, such as four 10-
hr days or as in the case of light assembly plants, 12-hour shifts.

Another option is shorter days rather than longer days. This plan often moves employees to part-time
status. Such an option is particularly attractive in service industries, where staffing for peak loads in
necessary. Banks and restaurants often hire part-time workers. Also, many firms reduce labor costs by
reducing fringe benefits for part time employees.

C. Job classifications and work rules

Many organizations have strict job classifications and work rules that specify who can do what, when
they can do it, and under what conditions they can do it, often as a result of union pressure. These job
classifications and work rules restrict employee flexibility on the job, which in turn reduces the flexibility
of the operations function. Yet part of an operations manager's task is to manage the unexpected.
Therefore, the more flexibility a firm has when staffing and establishing work schedules, the more
efficient and responsive it can be. This is particularly true in service organizations, where extra capacity
often resides in extra or flexible staff. Building morale or meeting staffing requirements that result in an
efficient, responsive operation are easier if managers have fewer job classifications and work rule
constraints. If the strategy is to achieve a competitive advantage by responding rapidly to the customer,
a flexible workforce may be a prerequisite.

JOB DESIGN
This specifies the tasks that constitute a job for an individual or a group. We examine seven (7)
components.

1. Labor specialization or job specialization. This is the division of labor into unique tasks. This is
accomplished by:

a. Development of dexterity and faster learning by the employee because of repetition.

b. Less loss of time because the employee would not be changing jobs or tools.

c. Development of specialized tools and the reduction of investment because each employee has only a
few tools needed for a particular job.

d. Paying exactly the wage needed for the particular skill.

2. Job expansion.

Driving this effort is the theory that variety makes the job "better". and that the employee therefore
enjoys a higher quality of work life.

a. Job enlargement. This is the grouping of a variety of tasks about the same skill level; horizontal
expansion.

b. Job rotation. It is a system in which an employee is moved from one specialized job to another.

c. Job enrichment. It's a method of giving an employee more responsibility that includes some of the
planning and control necessary for job accomplishment. This can be thought of as vertical expansion as
opposed to job enlargement, which is horizontal.

1. Popular extension of job enrichment, employee empowerment. The practice of enriching jobs so
employees accept responsibility for a variety of decisions normally associated with staff. Empowering
employees helps them take "ownership" of their jobs so they have a personal interest in improving
performance.

2. Limitations of job expansion

• Higher capital costs.

• Individual differences.

Higher wage rates.

Smaller labor pool.

• Increased accident rates.

Current technology may not lead itself to job expansion.

3. Psychological components of job design

a. Hawthorn studies. Introduced psychology to the workplace. They were conducted in the late 1920 at
Western Electric's Hawthorne plant near Chicago. Publication of the findings in 1939 showed
conclusively that there is dynamic social system in the workplace. Ironically, these studies were initiated
to determine the impact of lighting on productivity. Instead, they found the social system and distinct
roles played by employees to be more important than the lighting intensity of the lighting. They also
found that individual differences may be dominant in what an employee expects from the job and what
the employee thinks her or his contribution to the job should be.
b. Core job characteristics. In the eight decades since the Hawthorne studies, substantial research
regarding the psychological components of job design has taken place. Hackman and Oldham have
incorporated much of that work into five (5) desirable characteristics of job design.

Skill variety, requiring the worker to use a variety of skill and talents.

Job identity, allowing the worker to perceive the job as a whole and recognize a start and a finish.

Job significance, providing a sense that the job has an impact on the organization and society.

Autonomy, offering freedom, independence, and discretion.

Feedback, providing a clear, timely information about performance. Including these five ingredients in
job design is consistent with job enlargement, job enrichment, and job empowerment.

3. Self-directed teams.

This is a group of empowered individuals working together to reach a common goal. Teams are effective
primarily because they can easily provide employee empowerment, ensure core job characteristics, and
easily satisfy many of the psychological needs of individual team members. To maximize team
effectiveness, managers do more than just form "teams". They;

ensure that those who have a legitimate contribution are on the team.

provide management support

ensure the necessary training.

4. Motivation and incentive systems.

a. Bonus. A monetary award usually in cash or stock options given to management.

b. Profit sharing. A system providing some portion of any profit for distribution to the employees.

c. Gain sharing. A variation of profit sharing is gain sharing, which rewards employees for improvement
made in an organization's performance.

d. Incentive system. An employee award system based on individual or group productivity. Production
incentives often require employees or crews to produce at or above a predetermined standard.

e. Knowledge-based pay systems. A portion of the employee's pay depends on demonstrated knowledge
or skills of the employee. Knowledge- based pay systems are designed to reward employees for the
enlarged scope of their jobs. Some of these pay systems have three dimensions.

Horizontal skills that reflect the variety of tasks the employee can perform.

Vertical skills that reflect the planning and control aspects of he job.

Depth of skills that reflect quality and productivity.

5. Ergonomics and work methods

a. Ergonomics means the study of work. (Ergon is the Greek word for work). Male and female adults
come in different configurations. Therefore, the design of tools and the workplace depends on the study
of people to determine what they can and cannot do. The design of the workplace can make the job
easier or impossible. Additionally, we now have the ability, through the use of computer modeling, to
analyze human motions and efforts.

b. Operator input to machine. Operator response to machine, hand tools, pedals, levers, or buttons,
needs to be evaluated.

c. Feedback to operators is provided by sight, sound, or feel; it should not be left to chance.

d. The work environment. The physical environment in which employees work affects their
performance, safety, and quality of

Illumination is necessary, but the proper level depends on the work being performed.

Noise/vibration in some form is usually present in the work area but most employees seem to adjust
well. However, high levels of sound will damage hearing.

Temperature and humidity. Managers with activities operating outside the established comfort zone
should expect adverse effect on performance.

e. Method Analysis focuses on how a task is accomplished. Using knowledge from ergonomics and
methods analysis, methods engineers are charged with ensuring that quality and quantity standards are
achieved efficiently and safely. Methods analysis and related techniques are useful in office
environments as well as in its factory. Methods techniques are used to analyze:

Movement of individuals or materials using flow diagrams and process charts. Flow diagrams analyze
movement of people or material. Process charts depict a sequence of steps for a process.

Activity of human and machine and crew activity using activity charts (also known as man-machine
charts and crew charts). Activity charts improve utilization of an operator and a machine or some
combination of operators (a crew) and machines.
Body movement (primarily arms and hands motions) using micromotion charts. This is analyzed by an
operations chart (also known as a right-hand/left-hand chart) depicting right-and left-hand motions. It is
designed to show economy of motion by pointing out wasted motion and idle time (delay).

6. The Visual workplace.

This uses low-cost visual devices to share information quickly and accurately. It uses a variety of visual
communication techniques to rapidly communicate information to stakeholders. Visual signals are:

a. Present the big picture helping employees understand the link between their day-to-day activities and
the organization's overall performance.

b. Performance. Details of quality, accidents, service levels, delivery performance, costs and such
traditional variables as attendance and tardiness can all be presented, often in the form of statistical
process control (SPC) charts. Kanban.

c. Housekeeping. Use of shadow boards and footprinting, labeling and color-coded signs and lights.
Example is the use of andon, call light that signals problems.

7. Ethics and the work environment.

Management's role is to educate the employees, even when employees think it is "macho" not to wear
safety equipment. Management's role is to define the necessary equipment, work rules and work
environment and to enforce those requirements.

LABOR STANDARDS

These are the amount of time required to perform a job or part of a job. Only when accurate labor
standards exist can management know what its labor requirements are, what its costs should be, and
what constitutes a fair day's work.
SUMMARY

Outstanding firms know the importance of an effective and efficient human resource strategy. Often a
large percentage of employees and a large part of labor costs are under the direction of OM.
Consequently, the operations manager usually has a large role to play in achieving human resource
objectives. A prerequisite is to build an environment with mutual respect and commitment and a
reasonable quality of work life. Outstanding organizations have designed jobs that use both the mental
and physical capabilities of their employees. Regardless of the strategy chosen, the skill with which a
firm manages its human resources ultimately determines its success.