Operations Management

1. Operations Management Chapter 10 Human Resources and Job Design David Simarmata Erdita Nimas B Simon Novan

2. Human Resource Strategy The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized People should be effectively utilized within the constraints of other operations management decisions People should have a reasonable quality of work life in an atmosphere of mutual commitment and trust

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

4. Labor Planning Employment Stability Policies • 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 • 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

5. 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

6. 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

7. Job Design • Specifying the tasks that constitute a job for an individual or a group • Job specialization • Job expansion • Psychological components • Self-directed teams • Motivation and incentive systems

8. Labor Specialization • The division of labor into unique tasks • First suggested by Adam Smith in 1776 • Development of dexterity and faster learning • Less loss of time • Development of specialized tools • Later Charles Babbage (1832) added another consideration • Wages exactly fit the required skill

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

10. Enriched job Planning (Participate in a cross-function quality improvement team) Enlarged job 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) Control (Test circuits after assembly) Job Enlargement Figure 10.2

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

12. 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

13. Core Job Characteristics Jobs should include the following characteristics • Skill variety • Job identity • Job significance • Autonomy • Feedback

14. Self-directed teams Increasing reliance on employee’s contribution and increasing responsibility accepted by employee Empowerment Enrichment Enlargement Specialization Job expansion Job Design Continuum

15. 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

16. Self-Directed Teams 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

17. 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

18. Limitations of Job Expansion Higher capital cost Individuals may prefer simple jobs Higher wages rates for greater skills Smaller labor pool Higher training costs

19. 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

20. Ergonomics and the Work Environment • Ergonomics is the study of the interface between man and machine • Often called human factors • Operator input to machines

21. Ergonomics and Work Methods • Feedback to operators • The work environment • Illumination • Noise • Temperature • Humidity

22. Job Design and Keyboards Figure 10.4

23. Levels of Illumination Table 10.2

24. Environment Common Noise Noises Sources Decibels Jet takeoff (200 ft) 120 | Electric furnace area Pneumatic hammer 100 Very annoying | Printing press plant Subway train (20 ft) 90 | Pneumatic drill (50 ft) 80 Ear protection Inside sports car (50 mph) | required if Vacuum cleaner (10 ft) 70 exposed for 8 Near freeway (auto traffic) Speech (1 ft) | or more hours 60 Intrusive Private business office | Light traffic (100 ft) Large transformer (200 ft) 50 Quiet | Minimum levels, Chicago 40 residential areas at night Soft whisper (5 ft) | Studio (speech) 30 Very quiet Decibel Levels Table 10.3

25. Methods Analysis • Focuses on how task is performed • Methods techniques are used to analyze • Movement of individuals or material • Flow diagrams and process charts • Activities of human and machine and crew activity • Activity charts • Body movement • Micro-motion charts

26. Welding From press mach. Storage bins Paint shop Mach. 3 Mach. 4 Machine 1 Mach. 2 Flow Diagram Figure 10.5 (a)

27. Welding Machine 4 Machine 3 Paint shop Machine 2 Machine 1 From press mach. Storage bins Flow Diagram Figure 10.5 (b)

28. Process Chart Figure 10.5 (c)

29. Activity Chart Figure 10.6

30. Operation Chart Figure 10.7

31. 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

32. The Visual Workplace Visual signals can take many forms and serve many functions • Present the big picture • Performance • Housekeeping

33. The Visual Workplace Visual utensil holder encourages housekeeping A “3-minute service” clock reminds employees of the goal Figure 10.8

34. Reorder point Line/machine stoppage Parts/ maintenance needed All systems go Part A Part B Part C Andon The Visual Workplace Visual signals at the machine notify support personnel Visual kanbans reduce inventory and foster JIT Figure 10.8

35. The Visual Workplace Quantities in bins indicate ongoing daily requirements and clipboards provide information on schedule changes Process specifications and operating procedures are posted in each work area Figure 10.8

36. 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

37. 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

38. Meaningful Standards Help Determine Labor content of items produced Staffing needs Cost and time estimates Crew size and work balance Expected production Basis of wage incentive plans Efficiency of employees

39. Labor Standards May be set in four ways: Historical experience Time studies Predetermined time standards Work sampling

40. 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

41. 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

42. Time Studies Define the task to be studied Divide the task into precise elements Decide how many times to measure the task Time and record element times and rating of performance

43. Sum of the times recorded to perform each element Number of observations Average observed time = Average observed time Performance rating factor Normal time = x Time Studies Compute average observed time Determine performance rating and normal time

44. Total normal time 1 - Allowance factor Standard time = Time Studies Add the normal times for each element to develop the total normal time for the task Compute the standard time

45. 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

46. 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

47. Work Sampling • 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

48. Work Sampling • 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

49. CASE – HARD ROCK’S HUMAN RESOURSE STRATEGY • Bring company value into company culture – experience strategy • The employees are not just the best available for the position, they are the best qualified as well – long term objectives • People development • Build job satisfaction and motivations from psychological and monetary factors.