Chapter 11 – Work System Design

Operations Managementby

R. Dan Reid & Nada R. Sanders2nd Edition © Wiley 2005

Work System Design Designing a work system is part of

developing an operations strategy The work system includes:

Job design Work measurements Worker compensation

Job Design Definition: specification of the work

activities for an individual or group within an organizational setting.

Behavioral factors: Degree of labor specialization (advantages,

disadvantages). Job enlargement (vertical/horizontal) and job

enrichment. Physical considerations:

Work-task continuum.

Job Design Feasibility Issues

Technical feasibility: Whether the job is within physical &

mental capabilities of the workforce Economic feasibility:

Whether the cost of performing the job is less than its added value

Behavioral feasibility: Whether the job is intrinsically satisfying

Job Design (Trends) Quality at the source. Cross-training—multi-functional

workers. Employee involvement/creation of

teams. Feedback systems. Outsourcing tasks. Automation Meaningful/rewarding jobs.

Workplace Changes Labor/organizational changes.

More technology, fewer workers and organizational layers.

Increased employee involvement. Composition (gender/ethnic diversity). Thus, managers have different roles.

Mentors or coaches rather than “bosses.”

Employee Empowerment Assume roles once owned by managers. Increases employee motivation and hence

productivity. Managers must share:

Organizational performance information. Rewards (based on organizational

performance). Knowledge/expertise needed to enhance

organizational performance. Decision-making power.

Involvement 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

Must be long-term, ongoing attempts Communications efforts

feedback “bottom-up” communications

attitude survey feedback suggestion systems team building and quality circles

Teamwork Teams often outperform individuals. Self-managed teams have been found

to increase organizational performance. Responsible for many managerial actions:

Work assignments. Work pace. Quality assessment. Hiring/firing.

Cross-functional work teams (projects, committees).

Use of Teams Problem-solving teams:

Small groups, trained in problem-solving techniques. Used to identify, analyze, & propose solutions to workplace problems

Special-purpose task forces: Highly-focused, short-term teams with a

focused agenda (often cross-functional) Self-directed or self-managed teams:

Team members work through consensus to plan, mange, & control their assigned work flow

QWL: Definition II “Quality of work life emphasizes improving

the human dimension of work.” HR should try to improve QWL “by:

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

“Successful work/life programs can have a tremendous bottom-line business impact by: Reducing turnover. Enhancing recruitment. Reducing absenteeism. Improving retention. Improving productivity. improving morale. Strengthening employee commitment.

Work/Life Elements 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/WorkLife/dwsdefault.asp]

Work-task Continuum

Job Characteristics Theory(Hackman and Oldham, 1976)

Critical Psychological States: experience meaningfulness of the work experience responsibility for work outcomes knowledge of results

Core task dimensions skill variety task identity task significance autonomy feedback

Automation: Factors to Consider

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

Advantages: Minimal training

required Reasonable wages

costs High productivity Readily available

labor

Disadvantages: High absenteeism High turnover rates High scrap rates High number of

employee grievances filed

Employee’s View of Labor Specialization

Advantages: Minimal credentials

required Minimal

responsibilities Minimal mental

effort needed Reasonable wages

Disadvantages: Boredom Little growth

opportunity Little control over

work Little room for

initiative Little intrinsic

satisfaction

Eliminating Employee Boredom

Job enlargement Horizontal expansion of the job by increasing the

scope of the work assigned Enhances pride of work and sense of

accomplishment, but reduces productivity Job enrichment

Vertical expansion of the job by increased worker responsibility—planning and inspecting

Adds sense of control and enhances sense of pride

Job rotation Shifting of cross trained workers to other tasks Broadens understanding and can reduce fatigue

Alternative Workplaces Alternative workplaces are made possible by technologies like email, e-networks, cell

phones, & video conferencing. Current situation: 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 Basic compensation systems: hourly pay,

straight salary, piece rate, commissions. Individual/group plans:

Performance is rewarded based on measures of output (similar to piece rates) and/or measures of quality.

“pay for knowledge.” Organizational plans:

Profit sharing. Gain sharing (based on costs/outputs,

participative management). Scanlon Plan: rewards employees for organizational

improvements.

Work Methods Studies 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-value-adding (waste) and inefficient activities for process/productivity improvement

Study the Job1. Picks up wire in left

hand and moves it to the terminal

2. Simultaneously picks up solder iron in right hand and moves to the terminal

3. Solders wire to terminal and replaces solder iron in holder

4. Solders terminal #1, then

#2 - #6, going right to left

Flowchart the Process

Importance of the Work Environment

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 Standard time:

The length of time a qualified worker, using appropriate tools & procedures, will take to complete a job

Standard time is used in: Costing the labor component of products Tracking employee performance Scheduling & planning required

resources

Setting Standard Times Step 1: Choose the specific job to be studied Step 2: Inform the worker of the study 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 When making a time study

several decisions are made to assure desired results:

# 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: 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

2

x

s

a

zn

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.

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.

nsobservatio 250.24

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s

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A B C D EExample 11.3 Pat's Pizza Place

Standard Deviation Mean Observed Revised Observed Work Element (minutes) Time (minutes) Time (minutes) # Observations1. Get ball of dough 0.010 0.12 0.15 112. Flatten dough 0.030 0.25 0.25 233. Spin and toss dough 0.040 0.50 0.60 104. Place dough on counter 0.005 0.12 0.15 35. Pour sauce on formed dough 0.035 0.30 0.30 216. Place grated cheese on top 0.025 0.25 0.28 167. Place pepperoni on sauce 0.030 0.24 0.28 25

Other Time Factors Used in Calculating Standard Time

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:

(NT)(AF)ST

117.6%1.1760.151

1

PFD1

1AF WorkedTme

Calculating Normal Time and Standard Time at Pat’s Pizza

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)

12

1314

1516171819202122

A B C D E FExample 11.4 Calculating Standard Time for a Hand-Tossed Cheese and Pepperoni Pizza

Revised Observed Performance Rating Frequency Normal Time Standard TimeWork Element Time (minutes) Factor (minutes) (minutes)

1. Get ball of dough 0.15 0.90 1 0.135 0.1592. Flatten dough 0.25 1.00 1 0.250 0.2943. Spin and toss dough 0.60 0.85 1 0.510 0.6004. Place dough on counter 0.15 1.10 1 0.165 0.1945. Pour sauce on formed dough 0.30 1.20 1 0.360 0.4236. Place grated cheese on top 0.28 1.00 1 0.280 0.3297. Place pepperoni on sauce 0.28 0.95 1 0.266 0.313

Total Time 1.966 2.312

Other Time Study Methods

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 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 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

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 estimate that the proportion might be as high as .50.

Step 1 – We need to estimate the number of observations needed to provide an estimate with 97% confidence (z=2.17), and the resulting estimate will be within 5% of its true value. We use

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

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nsobservatio 3020.210.20.05

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Worker Compensation Systems

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

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

long-term health of the organization?

Learning Curves When the number of times the

task is repeated doubles, the

time per task reduces as shown

in the graph

With an 85% learning curve rate,

the 2nd time a task is done will

take 85% of the 1st time.

The 4th time will take 85% of the

2nd

If an employee took 12 hours to

complete an initial task, how long

will the 16th time take (4th

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 learningn = the number of times the

task has doubled

hours 6.26(.85)x 12task 16thfor Hours 4

Chapter 11 Highlights 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 (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

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.