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Principles of Operations Management

Principles of Operations Management

People & Work SystemsPeople & Work SystemsChapter 7Chapter 7

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Learning ObjectivesLearning Objectives

Define job designDefine job design Describe job design componentsDescribe job design components Explain motivation theories & Explain motivation theories &

studiesstudies

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People & Work Systems Goals People & Work Systems Goals

Use people efficiently Use people efficiently within constraints within constraints

Provide reasonable Provide reasonable quality of work lifequality of work life

© 1995 Corel Corp.

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People & Work Systems Constraints

People & Work Systems Constraints

Product Product strategystrategy

Process Process strategystrategy

Location Location strategystrategy

Layout Layout strategystrategy

SchedulesSchedules

People & Work DesignPeople & Work DesignPeople & Work DesignPeople & Work Design

Individual Individual differencesdifferences© 1995 Corel Corp.

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People & Work Systems Aspects

People & Work Systems Aspects

Job Design

Job Design

Labor Standards

Labor Standards

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Job DesignJob Design

Specifying the tasks that make up Specifying the tasks that make up a job for an individual or groupa job for an individual or group

Involves determiningInvolves determining What is to be done (i.e., responses)What is to be done (i.e., responses) How it is to be done (i.e., tools etc.)How it is to be done (i.e., tools etc.) Why it is to be done (i.e., purpose)Why it is to be done (i.e., purpose)

Results in job descriptionResults in job description Shows nature of job in task-related Shows nature of job in task-related

behaviorsbehaviors

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Job Design ComponentsJob Design Components

Labor specializationLabor specialization Job expansionJob expansion Psychological componentsPsychological components Self-directed teamsSelf-directed teams Motivation & incentive systemsMotivation & incentive systems Ergonomics & work methodsErgonomics & work methods

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Labor SpecializationLabor Specialization

InvolvesInvolves Breaking jobs into small component parts Breaking jobs into small component parts Assigning specialists to do each partAssigning specialists to do each part

First noted by Adam Smith (1876)First noted by Adam Smith (1876) Observed how workers in pin factory Observed how workers in pin factory

divided tasks into smaller componentsdivided tasks into smaller components

Found in manufacturing & Found in manufacturing & service industriesservice industries

© 1995 Corel Corp.

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Labor Specialization Often Reduces CostsLabor Specialization Often Reduces Costs

Greater dexterity & faster learningGreater dexterity & faster learning Less lost time changing jobs or toolsLess lost time changing jobs or tools Using more specialized toolsUsing more specialized tools Paying only for Paying only for

needed skillsneeded skills

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Job ExpansionJob Expansion

Process of adding more variety to jobsProcess of adding more variety to jobs Intended to reduce boredom Intended to reduce boredom

associated with labor specializationassociated with labor specialization MethodsMethods

Job enlargementJob enlargement Job enrichmentJob enrichment Job rotationJob rotation Employee empowermentEmployee empowerment

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Job Expansion Constraints

Job Expansion Constraints

Higher capital costHigher capital cost Workers’ preferencesWorkers’ preferences

Example: Some people prefer simple jobsExample: Some people prefer simple jobs

Higher wages requiredHigher wages required Smaller labor poolSmaller labor pool Increased accident ratesIncreased accident rates Lack of technologyLack of technology

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Psychological ComponentsPsychological Components

Individuals have values, attitudes, Individuals have values, attitudes, & emotions that affect job results& emotions that affect job results Example: Work is a social experience Example: Work is a social experience

that affects belonging needsthat affects belonging needs

Effective worker behavior comes Effective worker behavior comes mostly from within the individualmostly from within the individual Scientific management argued for external Scientific management argued for external

financial rewardsfinancial rewards

First examined in ‘Hawthorne studies’First examined in ‘Hawthorne studies’

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Hawthorne StudiesHawthorne Studies

Conducted in late 1920’sConducted in late 1920’s General Electric General Electric

Hawthorne plantHawthorne plant Showed the importance Showed the importance

of the individual in the of the individual in the workplaceworkplace

Showed the presence of Showed the presence of a social system in the a social system in the workplaceworkplace

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Hawthorne Studies: Workplace LightingHawthorne Studies: Workplace Lighting

Originally intended to examine effects of Originally intended to examine effects of lighting on productivitylighting on productivity Scientific management proposed that Scientific management proposed that

physical conditions affect productivityphysical conditions affect productivity Result: Productivity increased Result: Productivity increased

regardless of lighting levelregardless of lighting level Conclusion: Increased productivity was Conclusion: Increased productivity was

due to workers’ receiving attentiondue to workers’ receiving attention

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Hawthorne Studies: Piecework Pay

Hawthorne Studies: Piecework Pay

Examined effects of group piecework pay Examined effects of group piecework pay system on productivitysystem on productivity

Workers under piecework system should Workers under piecework system should produce as much as possibleproduce as much as possible Scientific management assumes that people Scientific management assumes that people

are motivated only by moneyare motivated only by money Result: Production less than maximumResult: Production less than maximum Conclusion: Social pressure caused Conclusion: Social pressure caused

workers to produce at group-norm levelworkers to produce at group-norm level

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Self-Directed TeamsSelf-Directed Teams

Group of empowered individuals Group of empowered individuals working together for a common goalworking together for a common goal

May be organized for short-term or May be organized for short-term or long-term objectiveslong-term objectives

Reasons for effectivenessReasons for effectiveness Provide employee empowermentProvide employee empowerment Provide core job characteristicsProvide core job characteristics Meet psychological needs (e.g., belonging)Meet psychological needs (e.g., belonging)

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MotivationMotivation

Worker performance depends onWorker performance depends on MotivationMotivation AbilityAbility Work environmentWork environment

Motivation is the set of forces that Motivation is the set of forces that compel behaviorcompel behavior

Money may serve as a psychological Money may serve as a psychological & financial motivator& financial motivator

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Motivation & MoneyMotivation & Money

Taylor’s scientific management (1911)Taylor’s scientific management (1911) Workers are motivated mainly by moneyWorkers are motivated mainly by money Suggested piece-rate systemSuggested piece-rate system

Maslow’s theory (1943)Maslow’s theory (1943) People are motivated by sequence of needs, People are motivated by sequence of needs,

which includes moneywhich includes money

Herzberg (1959)Herzberg (1959) Money either dissatisfies or is neutral in its Money either dissatisfies or is neutral in its

effecteffect

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Monetary IncentivesMonetary Incentives

Bonuses: Cash & stock optionsBonuses: Cash & stock options Profit sharing: Distribution of profitsProfit sharing: Distribution of profits Gain sharing: Reward for company Gain sharing: Reward for company

performance (e.g., cost reduction)performance (e.g., cost reduction) Scanlon plan is most popular (cost reduct.)Scanlon plan is most popular (cost reduct.)

Incentive systemsIncentive systems Measured daywork: Pay based on std. timeMeasured daywork: Pay based on std. time Piece rate: Pay based on pieces donePiece rate: Pay based on pieces done

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Ergonomics & Work Methods

Ergonomics & Work Methods

Worker performance depends onWorker performance depends on MotivationMotivation AbilityAbility Work environmentWork environment

Foundation laid by Frederick Taylor Foundation laid by Frederick Taylor Match employees to taskMatch employees to task DevelopDevelop work methodswork methods Establish work standardsEstablish work standards

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ErgonomicsErgonomics

Study of work Study of work Also called ‘human factors’Also called ‘human factors’ Involves human-machine interfaceInvolves human-machine interface ExamplesExamples

MouseMouse KeyboardKeyboard

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Methods AnalysisMethods Analysis

Focuses on how task is performedFocuses on how task is performed Used to analyzeUsed to analyze

Movement of body, people, or materialMovement of body, people, or material Activities of people & machinesActivities of people & machines

ToolsTools Process chartProcess chart Flow diagramFlow diagram Activity chartActivity chart Operations chart (right-hand, left-hand)Operations chart (right-hand, left-hand)

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ConclusionConclusion

Defined job designDefined job design Described job design componentsDescribed job design components Explained motivation theories & studiesExplained motivation theories & studies