workforce development in a small manufacturing organization

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WORKFORCE DEVELOPMENTIN A SMALL MANUFACTURING ORGANIZATION

By

AGUSTIN V. ARBULU C.

Submitted in partial fulfillment of the requirementsfor the degree of Executive Doctor of Management

Project Advisors: Paul F. Salipante, Jr. and John D. Aram

CASE WESTERN RESERVE UNIVERSITYJuly 2001


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WORKFORCE D EVELOPMENTIN A SMALL MANUFACTURING ORGANIZATION

AbstractBy

AGUSTIN V. ARBULU C.

This applied research project focused on workforce development in asmall manufacturing organization. Specifically, this study offers a CEO perspec-tive regarding the work environment or setting in contributing to worker attitudestoward acquiring skills and knowledge, commitment to the organization, and per-fonnance of hard-to-place workers. The conceptual framework that underpins thisinquiry draws on the concept of communities of practice as developed by EtienneWenger and the theory of situated learning by Jean Lave as applied to learningand communication in the workplace. The study offers insight into limitations onworkforce development and the role of relationships and race in the work setting.

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TABLE OF CONTENTS

ABSTRACT ." ,:..................... ,' . . . . . . . . . . . . . . . . . . . . . ............... 11LIST OF TABLES ........................................................................................................ viiCIIAP1'ER 1. INTRODUCTION ........................................................................... 1CHAPTER 2. BACKGROUND RESEARCH .......................................................5

The Existing Condition ofHard-to-Place Workers ........................................... 5The Role of Race .............................................. : ............................................. 10The Role of Informal Training ............................................ , .......................... 12Workforce Programs and Models .................................................................... 15Combining Hard and Soft Skill Development. ................................................ 17Workplace Practices ......................................................................................... 19Summary .............................................................................. ........................ 24

CHAPTER 3. RESEARCH PROPOSITIONS .....................................................26Summary .......................................................................................................28

CHAPTER 4. METHODS: FIELDWORK METHODS, TOOLS UfILIZED,AND ORGANIZING THE DATA COLLECTED ................................................29

Background of he Study .................................................................................29 .The Organizational Setting and Related Factors .............................................30Bias in the Research ........................................................................................36Validity Issues .................................................................................................38

CHAPTER 5. BACKGROUND OF THE ORGANIZATION ............................. 39Introduction ....................................................... , ............................................39


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Background ......................................................................................................39C o r ~ Competency of the Organization ............................................... : ...........42The Workforce ........... : ................................................... ................................ ~ 4 3 The Plant Floor .... , ..........................................................................................47Other Factors in the Organization....................................................................51Data Collection ................................................................................................52Use ofSurveys ....... .........................................................................................55Information-Sharing Tools .............................................. : ..............................57Summary ....................................................................................................... 58

CHAPTER 6. RESULTS OF THE FOCUS GROUP MEETINGS .....................62. Revue of Survey ..............................................................................................63

Comments on Questions Raised in Focus Group Meetings ............................69Summary .......................................................................................................77

CHAPTER 7. CEO REACTION TO THE FOCUS GROUP FINDINGS ........... 78CHAPTER 8. LEARNING AND KEEPING THE JOB ......................................84

Sponsorship and Learning in the Organization ...............................................87Tech Support Group ........................................................................................88Day-Shift Operator and Night-Shift Operator Groups ....................................89Jill and Louise versus Hombre and Sue:..........................................................97Day-Shift Operators versus Hispanic Operators..............................................99Learning as Being Racially Biased................................................................ 103Conclusions .................................................................................................... 108

CHAPTER 9. COMMUNICATION, POWER, AND COMMUNITY .............. 114

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-.The Communities ofPractice of Machine Operators .................................... 117Role ofCommunication ...................................................................... : ........ 120Senior Managementa's One ................. ........ ................................................124Management Inability to Change ................................................................... 127The Day-Shift Operator Group and Night-Shift Operator Group ................. 128Divergent Communities of Practice in the Day Shift .................................... 130Role ofRace .................................................................................................. 139Conclusions ................................................................................................... 142

CHAPTER 10. A REVISIT TO THE WORKPLACE OF A SMALLMANUFACTURING ORGANIZATION ............................................................ 146

Introduction .................................................................................................... 146. Role ofCommunication ................................ ; .............................................. 148Role ofLearning on the Job ........................................................................... 151Role ofRelationships and Race .............................. : ..................................... 155Implications for High-Performing Systems ...................................................160Public Policy Implications ............................................................................. 164Final Comments from a CEO ........................................................................167

REFERENCES ....................................................................................................... 173APPEl'IDICES ..................................................................................................... 178

Appendix A. Description ofCharacters ....................................................... 179Appendix B. Organizational Chart ............................................................... 181Appendix C. Diagram of Administrative Offices ......................................... 182Appendix D. Tech Support Office ................................................................183

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Appendix E. Plant Floor, South Side ............................................................ 184Appendix F. Plant Floor, North Side ............................. ................... : ......... 185

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Table 1..

Table 2.

Table 3.Table 4.

LIST OF TABLES

Change in Perfonnance and Productivity from.Februaryto November 1999 ................... : ..........................................................53Comparison of Commitment Variables from Februaryto November 1999 ................. : .......................................... , ................54PretestMean Scores and Percentage ofMissing Data ........................ 56Comparison ofAttributes .................................................................. 136

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CHAPTER!INTRODUCTION

It was a presentation at the Winter 1999 session of the EDM Program by Dr.James Duderstadt from University ofMichigan on twenty-first century education that

crystallized an opportunity for me to combine my past experience, connections, andeducation to use a manufacturing facility as a laboratory for testing work practiceideas. Duderstadt's presentation caused me to reflect on my exit from the legal profession over five years ago. After retirement, 1shifted gears and slowly began acquiring new skills and experiences marketable to the business world that hopefully weremore integrative in scope. At first I found it difficult to find employment outside thelegal profession. I n i t i a l 1 y ~ I thought that {'was equipped to work in a global manufacturing environment. Instead, my prior work experiences were inadequate formanufacturing or other related business settings given the realities of to day's globaleconomy.

After 15 months of suffering substantial economic hardship and several setbacks, I became CEO of a growing nonprofit urban community and economic development corporation in the inner city of a North Coast region. This corporation,equipped with a multimillion dollar budget and more than 25 staff and volunteers,allowed me to learn more about the chronic unemployed and the varied "new begin-


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ning" job and training programs that were being structured and implemented. As asocial activist and CEO, I also became more knowledgeable about challenges of m a n ~ aging and leading workers, volunteers, and stakeholders headquartered in the heart ofa depressed community, and the existence of various competing interests whenlaunching job programs for hardwtowplace residents.

In 1997 an opportunity presented itself to invest and participate in growing asmall manufacturing operation (referred to as the "manufacturing facility") that employed workers with "typicaln profiles of individuals serviced by my nonprofit community and economic development corporation. Between 1997 and the end of 1998, Inoted ieelings of alienation within the manufacturing organization by workers, a lackof necessary and adequate skills and tools, and an overall lack of control about theirfuture.

Nonprofit urban community and economic initiatives often seek competitiveand fair earnings to allow individuals to feed a family, while "for profit" businessesfocus on offering customers low pricing and high quality service and product. To sUCwceed, employers require workers to produce a quality product, on time, every time.Workers or employees who are unable to offer "added value" may be left on the sidelines. While reforms have been made to Welfare Programs, with work first or similarprograms implemented State-wide, outcomes seem to have led only to low payingjobs such as bank tellers and jobs at fast food restaurants, with limited upward mobility. Job-training programs have been developed and implemented, but have addedlittle to building the capacity of the poor, unskilled, and at-risk members of our community. To make matters worse, this segment of the community finds it difficult or of


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limited value to complete training that provides little or no compensation during thetraining process. Based on my own observations, experience, and discussions with. ndividuals in the field, I am convinced that few long-term gains are achieved with .short-term training or readiness programs of three to six months in length. Oftenworkforce development or training programs lead to jobs paying minimal hourly ratesof $7.50 or $8.00. Unless these jobs offer overtime on a regular basis and prospectsfor quick upward mobility, the worker may not benefit from working.

Working in a manufacturing environment, I encounter "everyday" demands toproduce competitively priced addedMvalue products and services, as well as pressureto secure an adequate shareholder return on investment. Staying competitive dependson having a trained workforce equipped to produce quality products and services atthe lowest cost possible. with minimal delays in a work environment that fostersmaximum productivity. Developing a workforce that is dependable, productive. andcommitted, and providing a workplace that is conducive to increased productivity arechallenging prospects, given varied sociocultural factors of our community and otherinadequacies faced at all levels of organizations.

This Applied Research Project (ARP) is one person's interpretation of factorsinside a small manufacturing facility, observing "close up" daily worklife interactionsamong workers in the organization and the outcomes from practices implemented inthe organization. During a period of nine months in 1999, I conducted a study thatrecorded my managerial actions taken to improve workforce development and productivity. This was followed by focus group meetings of workers in 2000 to gain further insight on worker perspectives on attitudes toward learning and communication.


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Initially I began by developing a demonstration project that involved selecting anumber of workers who would receive both on-the-job and o f f ~ t h e - j o b training over atwo--year period that would require collaboration among various institutions. However, I realized that demonstration programs would involve too much time, require.me to identify -sources ofoutside funds, and -require coordinating efforts among various organizations.

In early 1999, I began implementing ideas with existing resources to- observeif "something actually happens." Actions taken included increasing hourly pay to operatorsbasedon test results, developing a transportation -system,distributingr.eadingmaterial on manufacturing, and increasing communication with the workforce. Myfocus on worker interactions, relationships, and events, as well as delving into training and sociocultural worker design issues, revealed that data and events could noteasily be reduced to simpler tennsor -even simple conclusions. A comparison of productivity and retention data at the start of he study to the data accumulated at the endof the nine-month period revealed a limited increase in productivity and performanceamong operators, with continued turnover among frontline workers. From myobservations, I realized that the flow of work and worker interaction in the manufacturingfacility was complex and often messy.

This ARP offers a CEO perspective regarding the work environment or settingin contributing to worker attitudes toward acquiring skills and knowledge, commitment to the organization. and performance by hard-to-place workers; TheARP alsooffers insight into limitations on workforce development and the role of relationshipsand race in the work setting. .


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CHAPTER 2BACKGROUND RESEARCH

The Existing Condition ofHard-to-Place WorkersThroughout the United States, we have witnessed unemployment at record

lows and median household income rising. By the end of 1999, the unemploymentrate had decreased to 4.2%, the lowest since the late 1960s; yet, people felt anxiousand unsure (Hodgkinson, 1999). To compete, regions around the world are pittedagainst one another for quality products and services that are competitively priced. Toremain competitive globally, industrial regions of the United States must address thedemands of competition and productivity (Womack, Jones, & Roos, 1991. In re-sponse, large manufacturers have been restructuring and redistributing or "'outsourcing" manufacturing of parts to suppliers. One outcome from outsourcing is employingor having access to highly skilled workers. Increasing the pool ofemployable labor tomeet demands of businesses seeking labor resources is a priority.

For the ninth straight year, the North Coast region averaged a jobless rate of3.6%, with my state's jobless rate slightly higher at 3.9%. This state faces a demandfor skilled labor that exceeds available supply, while chronic unemployment persistsin the inner city where approximately 40% of working age adults are unemployed


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(people to Work Report, 1997). According to Holzer (1996), mismatches at differentlevels include:

. Ageographkmismatch between where most of he job growth is occurring (the suburbs) and where a large pool of labor resides (the inner city).Surveys indicate that manufacturing jobs are located in the suburbs, givit.tgrise to t r ~ n s p o r t a t i o n and child care issues. An education/skills mismatch between the ski1l1evel of the labor pool andthe skill level of demand by the employers required of applicants. Mosthigher paying manufacturing jobs require a higher skill level. In the innercity, high school students drop out at twice the rate of those in the suburbs,while the less educated and less skilled residents are more likely to comefrom the inner city. An organizational capacity mismatch between the training and educationthat labor market intermediaries provide and what employers seek. Onesurvey found that "frequently, education and training offered by intermediaries does not meet employer needs" (Metropolitan Affairs Coalition,1997).In the inner city alone, it is estimated that more than 30,000 people remain out

of work. Changes in welfare laws are forcing or encouraging urban poor to workwhile reports disclose that wages were .much less equally distributed among workersin 1998 than in the 1970s (Domestic Strategy Group, Work and Future Society Semi-nar Series, 1998). Since the 1970s, earnings for low-wage and low-skilled workershave fa.l1en in inflation-adjusted terms, while earnings among higher wage workersrose rapidly. Many economists were shocked by the reduction in earnings among theless-skilled and low-paid workers in the United States (Freeman & Gottschalk, 1998).

Challenges also exist in keeping the chronic unemployed on the job. FormerVice President Gore reported that "current studies show that more than 50 percent ofwelfare recipients entering the workforce for the first time lose their jobs within thefirst year. We must make sure that former welfare recipients have the support they


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need to stay on the job" (Ladd, 1998, p. 35). Issues such as child care and transportation also serve as serious impediments to employment, which need to be overcome.Studies fi'om the Universiiy of California at Los Angeles reported that individuals .with cars work more regularly, make more money and have more job choices (Holzer,1996).

From a public policy perspective, a primary concern facing most low-incomeurban communities such as the inner city is how to reduce chronic joblessness. Withunemployment remaining high in the inner city, how will this "at risk" populationfind jobs? And what is needed to create gainful employment for these individuals?The Greater North Coast city faces the paradox of having a sizeable population ofAfrican Am.ericans unemployed, primarily in the inner city, while most job opportunities are located in the suburbs. Employers outside the boundaries of the inner city arefrustratedl in their inability to find and retain workers. More jobs are available thanthere are people with the necessary skills to do these jobs. Jobs go unfilled because oflack of hard skills in math, blueprint reading, drafting, etc. (Connecting the UrbanPoor to Work, 1998; People to Work, 1997). This population of unemployed poor residing in urban centers represents a potential labor pool for employers.

The People to Work Report (1997) disclosed that unemployed individuals inthe inner cities often cannot read and perform arithmetic at a fifth-grade level. Yet,employers seek unemployed individuals who have fifth-grade skills to be trained toperform low skill jobs. Given these constraints, skilled jobs remain unfilled becausemany employers claim that qualified applicants cannot be found. Job training andplacement frequently are handled through intermediaries Gob placement agencies,


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work r c ~ a d i n e s s programs, etc.). However, education and training offered by interme-diaries may not meet employer needs. Employers often feel that these interinediaries. ' ..' .do not listen to; or understand, needs of businesses in providing the training and ser-vices needed.

With continued downsizing and outsourcing in the manufacturing industry, future job opportunities appear to be with small and medium-size businesses. A surveyof five counties surrounding the North Coast city found that employment over thenext five years remains strong, but "old" jobs will be changing or eliminated at arapid pace (21

stCentury Skills for 21

stCentury Jobs, 1999). As computer and ad-vanced technology become commonplace on factory floors, basic and technical skill

requirements of traditional jobs also are expected to change. Smaller manufacturingbusinesses with workforces of less than 250 employees, producing a part as opposedto providing a service (e.g., accounting or information technology), face challengesa ~ d limited resources to assist in job training and worker development. Often, smallermanufacturing concerns lack the necessary management skills to develop a systematicand integrated approach to human resource development. Upper management person-nel in many smaller manufacturers may not be educated or skilled in understandingskill level requirements or sociocultural aspects. They also may hfive weak connec-tions with education providers for developing needed workforce skills.

Many employers also hesitate to train their workers to have general, portableskills, in part because they fear losing these workers after they have been trained.Firms are more likely to train workers to have company-specific, nontransferableskills (Lynch, 1997). Similarly, employers are less likely to invest in workers they


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anticipate will leave the company after receiving training. A study by Krueger andRouse (1998) disclosed that workers who participated in training were neither morenor less likely to leave their company after training. Preliminary indications from myobservations support the finding that increased on-the-job training and skill upgradingamong operators in a manufacturing facility has not resulted in increased turnover orloss of workers.

Employers also turn to intermediaries for training and placement. Unfortunately, the success rate of intermediaries in placing and maintaining jobs for hard-to-place individuals varies. This situation creates a circular effect that leads to frustrationand unfulfilled needs. And yet, training in a vacuum is not enough; organizationsmust be able to realize increased performance and productivity.

Faced with limited resources, small companies are less likely to provide in-house training, particularly for generalizable skills, such as computer-assisted designthat can be transferable. The People to Work Report (1997) found that 6 of 10 smallemployers interviewed for a study of a region similar to the Greater North Coast cityoffered in-house training geared toward building generalized skills. But employerscomplained that they often lost employees to competitors after making sizeable in-vestments in their training. The People to Work Report suggested that in-house training is related to difficulty in locating skilled workers. Another survey of 561 compa-nies located in a region similar to the Greater North Coast city reported that a major-ity of employers rarely or never provide tuition reimbursement, mentoring or appren-ticeship opportunities to their employees (Workforce Issues: Now and Future, 1999).Clear and convincing evidence of benefits of ongoing training of employees from an


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employer's perspective is lacking. Also, intermediaries reported cuts in g o v e m m e n t ~ funded programs required better collaboration with businesses in developirig trainingprograms that addressed the' needs of the employer.

The Role of RaceAn aspect often ignored or not addressed openly is the role of race in the

workplace. Inner city populations ofmajor urban centers are 75% non-White, whilethe racial distribution in their suburbs is the reverse, creating a strongly segregatedmetro community (People to Work, 1997). Current readings and studies on work d e ~ velopment and training programs for the chronically unemployed often ignore the r a ~ cial aspects in and outside organizations that interface in organizational settings.Small manufacturers in the North Coast city face a racially polarized workforce withmost frontline operators being minorities (African American and Hispanic) who reside in the inner city, while supervisors tend to be White and reside in the suburbs.

In a project entitled The Multi-City Study ofUrban Inequality (funded by theFord and Russell Sage Foundations), researchers suggested that while space and skillgaps are important obstacles to advancement of inner-city residents, they tell onlypart of the story; racial barriers also serve as a pervasive influence for workers (Freeman & Gottschalk, 1998). Holzer's (1996) study found that given the racial makeupof applicant pools, African Americans were significantly underhired. He reported thatemployers exhibit strong racial preferences in their hiring practices, often based onstereotyped ideas of who will perform better. His study also found workplaces weresegrega.ted where most African Americans worked alongside other African Ameri-


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cans but were supervised by Whites. For example, in Los Angeles, 86% of Whiteworkers were supervised by other Whites, while only 30% .of African Americanworkers reported to African.American supervisors. Finally, most jobs were located insuburbs where African Americans felt unwelcome given that most African Americanworkers lived in the inner city. Fears of anticipated discrimination combined with effects of actual residential discrimination made the distance between home and job adistinctly racial as well as a spatial divide. These findings suggest that employers face'far deeper complexities and challenges when developing a training program thansimply developing "hard skills" programs for inner-city residents.

The role of race cannot be ignored in the workplace when studying relationships among workers and between workers and supervisors. These relationships couldvery well have racial overtones, which may go unnoticed. The racial aspect of theworkplace is important, given the challenge to train and develop minority workers tomoye them into supervisory positions.

An observation regarding the role of race within organizations indicates the'emergence of different outcomes from workers and supervisors from the same Of

.ganization. Differences in race and the environment from which workers and supervisors come could explain the development of subcultures within the organization.Changes in the organization structure, such as employing workers from diverse- racialmakeups, might create the basis for the emergence of subcultures in the organization.Such subcultures could either contribute or impede meeting the objectives of an organization (Schein, 1985).


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: Further expanding -on -the -concept --of-subcultures, -organizations -can also beviewed as consisting of small groups of people or communities of practice that haveworked together over a period of time (Wenger, 1998). Often they are not even ateam or a task force, but perform or collaborate on a shared task. Wenger argues thatcommunities ofpractice differ from a team in that it is knowledge acquisition throughparticipation that adds value to its members.. T h u s ~ interconnecting the communitiesof practice through sharing, organizing and passing on knowledge within an organization can serve to make the organization effective and add competencies to its members while keeping the organization at the cutting edge.

The Role of Informal TrainingAn important aspect of infonnal training is designing the workplace so that

new or existing workers acquire the necessary knowledge or skills to perform the jobwell. While formalized on-the-job training is critical in developing a foundation forthe individual, actual observing and doing is another important component in developing a higher skilled workforce (Lave, 1988). Differences between perspectives onlearning and teaching come into play, with Lave contrasting two communities ofpractice. One is a supermarket meat department. Apprentice meatcutters are put towork where they can be the most efficient at the wrapping machine. But the wrappingmachine is in a different room from the cold room in which journeymen preparemeat. As a result, the apprentices have few opportunities to become what Lave caUs"legitimate peripheral participants" in the community of practice. They have to learn


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to cut meat by depending on their fonnal training rather than by observing meatcutters and graduaUydoing more ofwhat they do.

rn contrast, a p p r e r t t i c ~ midwives in Yucatan are usually daughters of seniormidwives. In this scenario, their broad exposure to ongoing practice provides a dem-onstration of goals that newcomers are expected to master. Knowledge and skill de"velop during this process, with an integral part of this process allowing the apprenticemidwives to become master practitioners within their community of practice. Usingthis example, the goal is to have all employees in the organization learn using a for-malized setting as well as having them become legitimate participants that allowtrainees to integrate their practice and formal training.

The National Center for Research in Vocational Education (NeRVE) published a report in 1996 on four large work settings and study of skills in service andmanufacturing jobs. The study involved work sites of publicly held companies andp u ~ l i c agencies and learning technical skills on-the-job, as well as an examination ofthe workplace as a social system. Three skill areas were reviewed: problem-solving,communication, and teamwork. This study found that workplaces were complex; dy-namic social systems defied simplistic categorization of skills and straightforwardmatching of skill requirements to jobs. A rich picture of essential skills and dispositions in the workplace included:

1. generic skills such as communications, problem-solving, working as partofa team, and positive dispositions toward work.

2. the finding that generic skills and dispositions varied with work contextand, as such, proper job candidate selection involving specific skill and. aptitude requirements are important.


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In addition; the NeRVE Report found that employers lacked specific knowledge ofworkforce skills and effective s t r a t ~ g i e s for developing essential skills. the studysuggested that employers do not uniformly possess accurate or useful knowledge of the skills required in their technical workforce. Supervisors and managers removed. rom the frontline workforce sometimes underestimate the capabilities of workers or

.. have varying opinions about work requirements. In addition, employers and employees who were interviewed believed that on-the-job training was essential to learn thejob in the first place or keep up with the pace of change that was occurring in theworkplace. Even if formal on-the-job training was absent, workers continued to learnon the job. The study found that on-the-job training was carried out within communities of practice when formal training was not provided or failed. A shortcoming wasthe failure by higher management to recognize the role of communities ofpractice assupporting training. In some cases, management policies appeared to underminerather than support an environment in which experts guided newcomers in the workplace.

The NCRVE study offered an important contribution for smaller working environments as it suggested that particular attention should be paid to the role andfunction. of communities of practice in organizations and how these organizationscontJ;ibute to learning, standard setting, efficiency, etc. These communities ofpracticeare an extension of Lave's (1988) writings and offer an alternative perspective for. ollow-up and observation. In addition, better tools for measuring and assessing skillsthat address and affect performance need to be developed and employed.


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Lave (1988) and the NeRVE (1996) study offered an opportunity to betterunderstand and structure change in small manufacturing environments. K D . o w l ~ d g e acquisition through closer observation teok on a much broader perspective within theframework of all levels of the o.rganizatio.n,. That is, kno.wledge acquisition may oc-

. cur regardless o.f whether it is the frontline operator who is exposed to. more experienced operators or the new superviser who observes more experienced supervisors inhandling management-related issues. Often this on-the-job informal training is ignered and not valued until it is lost because of turnover or absenteeism. Lave's concepts of situated learning offer an opportunity "through observation" to. view workerinteraction from a different perspective in workforce development. Thus, Lave's approach to learning and knowledge acquisition is that it occurs around cemmunities ofpractice where learning is shared among its members.

Another challenge is to. develop skills or training of workers who are older.Heckman (1999), a neted researcher and prolific writer, questioned the value of training the elder individual. Basically, the conclusion reached was that training provedless valuable to the older worker. Heckman, in discussing hard-core older unemployed individuals living in urban centers, suggested older individuals cannot contribute to increasing organizational performance through training and that it would bea waste of time to spend scarce resources on this segment of he population.

Workforce Programs and ModelsPublicly provided job training programs for low skill workers appear to have

positive, but modest, effects. The Job Training Partnership Act reported that primary


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training for the least skilled employees raised annual wages among both men andwomen by between $200 and $600 per year. As Heckman (1999) noted, public jobtraining programs could not possibly reverse the impact of widening wage inequalityamong less skilled workers. The effects are simply too small.

A review of workforce programs across the United States found that mostworkforce models employ one of four approaches:

1. self-employment,2. job training and placement,3. job creation and retention, and4. community-based initiatives.These models seek to address barriers to employment (i.e., transportation

andlor child care), help individuals acquire necessary skills to obtain employment,and provide support to program members that can help them retain employment andmove beyond entry-level p o s i ~ i o n s . Often, nonprofit or quasi-public workforce development programs, which serve as intermediaries, develop these models. Employerswho are expected to be the end users of these programs are not involved in either de-signing or championing these workforce development programs.

An Aspen Institute (1993) report identified model programs with a full spec-trum of intervention strategies serving aU levels of individuals, ranging from thehomeless to the temporarily unemployed. Further, the "leaner and meaner" modelscollectively represent a new paradigm in development thinking since they:

serve as empowerment vehicles by devolving responsibility for performance to individuals while creating an atmosphere of dignity, discipline andhigh expectation;


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link. poverty alleviation directly to broader economic development goalsrather than viewing it as an end in itself; pursue market-based strategies, often sector specific, that exploit market

niches for individuals; and seek to become sustainable elements of he local economy itself.Such programs are designed to assist individuals and their families who are

primarily long-term unemployed. A typical format provides for an initial assessmentphase and assignment of "family coaches" to assist program participants' attempts toidentify barriers, which could present substantial obstacles to achieving economic in-dependence. A subsequent phase allows individuals to develop plans and engage inactivities that could reduce or eliminate barriers and provide stability in their lifesituations.

The following lessons can be derived from these programs: Job ladder issues are key; access is not enough. Individuals need to haveways of moving into better, more highly skilled jobs. Typical programsprovide placement in jobs paying minimal hourly rates. Programs require time to develop and to work out problems. Training needs to be focused and realistic expectations need to be set. There is a need to create an organizational culture that demands high quality standards, hard work, open communication, and mutual support. Sup-port from top management is crucial.

Combillling Hard and Soft Skill DevelopmentFrom one perspective there is a need for employees to develop "hard" skills

(e.g., blueprint reading, drafting, tool and die making, layouts, inspection, etc.) tocomplete specific tasks required of the position. Yet, the Connecting the Urban Poor


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to Work Report (1998) found that another important factor considered by employerswas seltecting workers who had the right attitude. Employers. found that employeeswho are reliable, able to take supervision, and work with fellow employees and c u s ~ tomers are dedicated to doing a good job. These employers are confident that they canteach entry-level workers the technical skills necessary to do their jobs. The Reportconcluded that in addition to "hard skill" training, "soft skill or nonhard skill" development is also needed when working with the chronically unemployed. For the purpose of this study, soft skills or nonhard skills include having a work ethic, possessinga willingness to work and learn, and being dependable and/or punctual. It could alsorefer to skills related to reading, writing, communication, and interpersonal relations.

The urban poor face other barriers, such as economic segregation in housingand schooling, which isolate them from the larger labor market (Case & Katz, 1991;Haveman & Wolfe, 1994; Rosenbaum, 1995). Case and Katz's (1991) "The CompanyYou Keep: The Effects of Family and Neighborhood on Disadvantaged Youth" foundthat poor people who were raised in middle-class suburbs tended to be more successful than poor people who lived in areas of concentrated poverty in an urban location,if all else was equal. These obstacles represent another dimension to a complex webwhen seeking to develop an effective, coordinated approach to workforce development tor the urban poor. Simple, mindless application of standardized practices doesnot necessarily result in the development of an effective action plan. Instead, we mustenter and participate in the process face-to-face and observe the dynamics of theworkplace. Where necessary, employers must become socially active by taking contextually relevant action.


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Workplace PracticesThe issues of communication and lack of skills.in the workplace also raise the

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question about the type of setting that exists within organizations that can fostergreater productivity. Arguments suggest that alternative systems for managing e m ~ ployees and organizing their work could lead to better employee performance and, intum, superior organizational performance. Studies indicate that adoption ofa coherentsystem of new human resource (HR) management practices, (e.g., flexible job d e f i n i ~ tions, cross-training, employee involvement, contingent compensation, increased in-formation sharing, and employment security) can result in substantially higher levelsof productivity than more traditional human resource management practices (e.g., lessflexible, close supervision, hourly pay) (Arthur, 1994). These new types of humanresource management emerged as a result of the growing interest in Japanese man-agement practices, and are driven by concern about the inadequacie"s ofUnited Statesmanufacturing in general (Dertouzo, Lester, & Solow, 1988).

In traditional manufacturing plants (commonly referred to as traditional orcontrol-based HR systems), conceptualizing and planning future projects is separatedfrom carrying out work tasks and executing plans (Ichniowski, Kochan, et ai., 1996).Blue-collar positions are typically routine and require constant repetition with littleknowledge regarding the connection between the tasks they perform and the overalloperation of the organization. Nonsupervisory employees have little. autonomy orcontrol in performing their tasks. Instead, supervisors coordinate collecting and proc-essing information by blue collar and nonsupervisory workers and then use this in-formation to make decisions. In tum, front-line workers are expected to carry them


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tion (i.e., profit sharing and gain sharing) on value added per employee from a sampleofmanufacturing finns in Michigan. This report indicates that employee participation.plans had larger significant positive effects in union than in nonunion finns. Anotherstudy found that employee voice had a larger positive effect on productivity when itwas done in the context ofunionized establishments (Black & Lynch, 2000).

A 1994 article by Arthur compared two types of human resource systems, thecontrolbased HR system and the commitment-based HR system. The study foundthat commitment-based systems contributed to higher productivity, lower scrap rates,and lower employee turnover than those with control-based systems. In a controlbased rlR system, the goal is to reduce labor costs or improve efficiency by enforcingemployee compliance with specific rules and procedures, and basing employee re-wards on some measurable output criteria. In contrast, commitment-based HR sys-tems shape desired employee behaviors and attitudes by constructing psychologicallinks between organizational and employee goals. The focus is on developing com-mitted and skilled employees who can be trusted to use their discretion to carry outjob tasks in ways that are consistent with organizational goals. This purpose can beaccomplished by decentralizing managerial decision-making, establishing formal participation mechanisms, and providing the proper training and rewards. A commitment-based system can lead to a highly motivated and 'empowered work force whosegoals are closely aligned with those ofmanagement.

Arthur (1994) found statistically significant evidence to show that higherturnover in a manufacturing facility was associated with a control-based system.Turnover was found to be twice as high in control-based systems when compared to


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turnover in commitment-based systems. Another important finding was the negativerelationship between turnover and manufacturing performance in commitment-basedsystems, where a lower turnover was associated ~ t h the higher performance of a .company. Arthur provided empirical evidence that supports advantages of a commit-ment-based system over a control-based system. However, he did not provide evi-dence regarding the performance implications of mixed systems (e.g., ones that existsomewhere between control-based and commitment-based systems).

The commitment-based system is similar in approach to the creation of inno-vative workplaces. The innovative workplace, as with a commitment-based system,departs from traditional work systems and labor-management relationships developedand practiced in many industrial settings. Traditional workplaces are characterized bytightly defined jobs with associated rates of pay, clear lines ofdemarcation separatingthe duties and rights of workers and supervisors, decision-making powers retained bymanagement, and communication and conflicts channeled through formal chains ofcommand and grievance procedures. In contrast, innovative workplaces seek greaterdegrees of flexibility in work organization, cooperation between workers and man-agement, and worker participation in decision-making and financial well-being of thecompany (Ichniowski, Kochal\ et al., 1996).

High-involvement workplaces may result in workers working harder. Workersmay enjoy work more when characteristics of the job make their work interesting andensure that work provides positive feedback and rewards. Workers are less likely toresent a job if they have h ~ l p e d in its design (Levine, 1995). In addition, cross-training and flexible job assignments can lead to reduced absenteeism, improved


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communication, and improved worker-management relations. Ultimately, a systeminvolving the adoption of innovative work practices can translate to higher productiv-

. . ' .ity and quality (IchniowSki" Kochan, et at., 1996). Further, a study on human re-source management practices and worker productivity found that adoption of a fullsystem of innovative human resource management practices achieves higher levels ofproductivity and quality as opposed to those organizations that adopt only one or twofeatures of this type of system (Ichniowski & Shaw, 1997). An organization thatshifts its system by adopting one or two practices without changing others may evenperform worse than traditional systems (Ichniowski, Kochan, et aI., 1996). This sug-gests that manufacturing organizations, in making changes to their work practices,need to consider adopting comprehensive measures in the workplace rather than justone or two practices.

Implementing new human resource systems, such as commitment-based sys-terns, can be a challenging venture. The Brookings Institution reported in 1995 thatorganizational theories do not provide unambiguous prediction (Reinventing theWorkplace, 1995). Instead, sustaining a successful, high-involvement, high-performance work organization is difficult. Adopting a commitment-based system requireschanges in human resource policies (i.e., pay and training, changes in managementstyle, and changes in supplier relations). Research has produced evidence that the results can be worth it: o r g a n i z 1 j i ~ n s that have invested in their people have, on aver-

.. .J ' )

age, enjoyed impressive rewards. Thus, providing frontline workers with skills, moti-vation, and freedom to improve how they do their jobs can greatly increase both pro-ductivity and worker satisfaction.


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Another challenge is the practicality and extent of implementing different orinnovative work practices in a manufacturing organization. The outcomes depend onthe particular identification and application of certain tectm:iques or methods in theworkplace. These techniques include development in the organization of problemsolving groups, suggestion schemes and appraisal schemes that systematically measure and reward individual input to quality improvements and the blurring of lines between planning and execution of tasks (Kenney & Florida, 1993). An important com-ponent is related to enhancing workforce skills through either formal or informaltraining. Depending on the manufacturing environment, cross-training related to mastering certain machines and tasks could serve to provide greater flexibility when tiedto improved quality performance or increased efficiency (Applebaum, Bailey, Berg,& Kalleberg, 2000).

SummaryDevelopment of hard skills is important and needs to be introduced systemati

cally and simultaneously with development and implementation of soft or non-hardskills. Studies found that training of employees does not necessarily instill commitment to the employer, but training has been shown to reduce turnover. Concurrently,implementation of newer human resource work practices reveals positive relationships with organizational performance. Therefore, "bundling" of human resourcemanagement practices leads to greater synergistic effects than just implementing partsin an organization. The studies presented in this review have suggested that linkingwork practices together in the organization can lead to increased productivity.


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These concepts support the conjecture that developing a single right approachor model on workforce. development can be extremely difficult because' of variedcomplexities and variables, internally and externally, that can impact the organizationand workers. One component that is important is the social interaction that needs tobe present among workers. In this regard, recording one's own daily interactions andcarrying out focus group interviews are methods to capture complexities of social in-teraction. Through active participation in enhancing knowledge and skills, and com-mitment to adopting innovative human resource principles, workplaces can produce

gradual changes in workforce skills, productivity, and retention .


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CHAPTER 3RESEARCH PROPOSITIONS

I have intervened in and studied supervisor-subordinate relationships.co-worker relationships, communication skills. and knowledge levels of hard-to-placeworkers in order to understand the personal and organizational changes associatedwith workforce development. and how these changes result from the socioculturalenvironment and context of work that occurs at all levels of an organization.

Proposition 1:Increased informal and formal worker development at all levels of asmall manufacturing setting that employs a low-skill or hard-to-placeworkforce will.increase productivity and performance of an organization.This proposition was investigated from an employer's perspective, to deter-

mine whether certain practices used in the organization led to overall increased pro-ductivity and performance. In evaluating Proposition 1, many factors that comprise anew human resource management practice system (also referred to as a commitment-based HR system) were implemented to increase and improve workforce skills, butwithout a specific design to create a commitment-based HR system in the organiza-tion. Practices developed during the period of study included cross-training of opera-tors to perform a number of different jobs on different machines, more specific jobscreening. increased hours of on-site classroom training, and increased information

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sharing through memos and newsletters. These practices were put into action or"bundled" throughout the period to assess impact on performance and productivity. Insome cases, certain practices were used on a more regular basis, such as informationsharing while on-site training was more irregular and inconsistent.

Proposition 2:Organizational workforce development, such as conducting on-the-jobtraining sessions and worker meetings, disseminating monthly employee newsletters, production and productivity reports, and encouraging worker involvement at all levels of an organization fosters betterlines of communication among all workers and leads to a greater senseof commitment from employees and the furtherance of higher job attainment or promotion, income, and job security.In investigating Proposition 2, I informally adopted many factors that were

consistent with a commitment-based HR system, such as cross-training of operatorsofdifferent jobs on different machines, increased hours in on-site classroom training,and increased information sharing through memos and newsletters. Outcomes weremeasured using turnover, absenteeism, and length of service data.

In further testing both propositions, I retained an independent facilitator inearly 2000 to conduct focus group meetings of all workers other than senior manag-ers. Names of all participating workers were kept confidential from me, as CEO, andanyone else to ensure maximum protection of the workers, and were not disclosed tome or any other supervisor of the organization . These focus group sessions offered adeeper understanding of the social dynamics regarding change, leaming, and oppor-tunities for advancement from the perspective of the worker.


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SummaryFrom my perspective, practices deployed to measure two propositions were

closely integrated and linked. It was difficult to develop practices that were designedspecifically to assess performance, productivity, and commitments. By reviewing thecompiled materials, I was able to make suggestions regarding implementation andoutcome of certain practices that were more similar to a commitment-based HR system than to a control-based HR system. However, the use of focus group meetingswas a valuable tool in gaining evidence about the work environment that would nothave been available from my personal experience and observations, given my seniorposition in the organization.


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CHAPTER 4METHODS: FIELDWORK METHODS, TOOLS UTaIZED,

AND ORGANIZING THE DATA COLLECTED

Background of the StudyThis ARP outlines and explains choices that I considered important and that

were acted upon during my research of the workplace of a small manufacturing facil-ity between March 1999 and March 2001. My position in the workplace was both asobserver and active participant in the role of chiefexecutive officer (CEO). As such, Iwas able to collect information and implement strategies to assess worker responseson commitment along with worker and organizational performance and productivity.My approach from a position ofpower and authority in the workplace was to observe,act, experience, react and ask people about what was going on in the company At thesame time, my position as CEO of the organization limited me from accessing deeperinsight into the worker perspective on opportunities for learning, advancement andinformation sharing.

The primary focus of the research was the activity of all workers (operatorsand direct laborers) employed by the organization, but specifically those activitiestaking place on the plant floor. Particular attention was given to the frontline workers,aged between 25 and 45 years of age and their relationship with the tech support

?9


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--group. As researcher, I was exposed to a variety of a c t i v i t i e s ~ behaviors, and attitudes.This exposure allowed me to observe a complex web of entrenched, informal, andcomplex relationships among workers and institutions that" layered the organization.However, it was difficult to separate my role as researcher from my role as CEO. sothat initial observations and analyses tended to be viewed from the perspective of aninsider as opposed to an impartial outsider.

The Organizational Setting and Related Factors

Role ofResearcher .The study was designed to allow me to immerse myself as researcher and

CEO in the workplace and observe and analyze the processes of interactions, actions,and outcomes among workers and employees between March and November 1999, aswell as ~ h e period covering 2000 and the early part of 2001 (Greenwood & Levin,1998). The research was integrative in scope, aimed at discovering or producing abetter understanding of social relations and their role in productivity, performance,and commitment at both organizational and worker levels. I intended to gain a betterunderstanding of relationships among employees in the small manufacturing organi-zation.

To say I was neutral in my dealings with activities in the workplace and em-ployees in the organization would be misleading. While some bias exists in any deci-sion-making, I sought to control my bias by reviewing proposed actions with mypartner (Dick), the plant manager (Milton), and other supervisors in the workplace.However, the ultimate attempts to control my bias were. exemplified by the focus


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group sessions conducted in eady 2000. These sessions revealed the perspective ofthe worker, uninterrupted or compromised by senior management or tech supportgroup member input.

Data were collected from business records of the organization regarding hoursdevoted to training employees as well as data on performance, productivity, andcommitment.

Time PeriodsThe data collected on production, performance, and retention took place over

a nine-month period, beginning in March and ending in November 1999. I also reviewed personnel records on employee absences and tardies for the period prior to1999 and subsequent to 1999, that is, for 2000.

To gain further insight into worker attitude on opportunities for learning, skillenhancement and commitment toward the organization, as well as obtain a better understanding of responses set forth in the surveys completed, focus group sessionswere conducted in March 2000 of all machine operators and tech support employees.The facilitator submitted her overall. findings to me in May 2000. Subsequently, inMay 2001 I received a complete set of the written transcripts of the focus group sessions conducted in March 2000. The transcripts allowed me to revisit my notes andobservations for the periods of 1999 and 2000 and consider alternative perspectiveson worker attitudes on learning and communication in the workplace.


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Sample Size, Setting, and Participation LevelThis study involved all employees of the organization, with special focus on

the machine operators and tech support workers. The manufacturing, facility was located in the North Coast region and performed precision machining of forgings andcastings by offering quick changeovers and set ups, moving from one machining jobto another within a 15- to 30-minute time period using technicians (who were generally White) as opposed to operators (who were generally non-White). New operatorswere assigned to a particular machine and trained on the job by another operator withmore experience. One operator was assigned to each machine except during the train- 'ing period. Developing teams or self-directed teams was virtually impossible in theorganization because the machining of a forging or casting part was done at eachCNC (computer numerical control) machining center, which was operated by an individual machine operator. To minimize uncertainty and to ensure control, the operatorwas instructed by hislher supervisor to produce a minimum quantity ofparts per shift.Maintenance, repair, changeover, etc., were the responsibility of a member of the techsupport group.

The organization employed approximately 40 workers (including administration) and operated two lO-hour shifts daily, Monday through Friday, with an eighthour work day on Saturday. Hourly workers numbered between 28 and 34 workers,which included machine operators and almost all tech support workers. The workforce consisted of three levels, the senior management group, the tech support group,and the machine operator group. All workers except administration, which consistedof he two owners, the plant manager and the quality manager, were paid on an hourly


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-.basis and earned time-and-a-half when more than 40 hours was worked in any givenworkweek.

Further discussion on the workforce and the background of he organization isset forth in Chapter 5.

Use of Other Primary MaterialThe manufacturing facility and staff maintained records on productivity and

machine output for jobs, commonly referred to as production and operational records.These production and operational records were initially reviewed in February and foreach month through November 1999. This process allowed for comparing and con-trasting different areas and keeping track of any changes.

Data reviewed consisted of he following:1. Scrap rate2. Average production machine hours3. Average machine down time4. Absenteeism and tardiness5. Turnover6. Weekly productivity reports per machine7. Mishap logs8. P (production) charts completed by operators .Some of the data were difficult to compile efficiently, and therefore certain

changes were made that permitted greater ease and compilation of he data. Data were


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collected and monthly averages were determined based on the number of operators,production dollars, and simIlar considerations. Data included:

1. Average scrap rate per month2. Average mishaps per operator per month3. Average monthly dollar produced per hour4. Average length of service per month5. Average absences by direct labor per month6. Average tardiness by certain units of workers7. Average hourly rate of direct labor per month8. Average turnover per month9. Average production output per month10. Average production output per operator per monthData collection also included a review ofbackground personnel files including

the application-for-work forms, employee attendance records, and performance review. Further, through informal discussions on the plant floor with workers I learnedabout the lives of people in the organization and their relationships with other work-ers.

Personal ObservationsI took a proactive approach in the organizational setting and was willing to

test and retest ideas, practices, and concepts (Whyte, 1994). I explored the managerialprocesses employed, worker development, and the socio-cultural struggles in the or-ganization in a real life setting (Remedy, Williams, Money, & Swartz (1998).


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--Serving as a CEO of the organization did limit how open and revealing work-ers were with me. Interpretations tended to differ between workers and me as to howworkers viewed demotions, pay raises, opportunities to learning, and worker in- . .volvement. On reflection, I initially sought to unconsciously validate that my actionsas CEO did lead to "positive" results, showing the transition of the organization froma controlled based system to a commitment-based system. That perception was shat-tered as a result of the focus group sessions, which forced me to take a fresh look atwhat was taking place on the plant floor.

Focus Group MeetingsTo obtain a deeper, richer understanding of the impact of activities under-

taken, to determine employees' reactions to the two surveys conducted of employeesin 1999, and to gain additional insight on data collected on productivity and perform"ance, three focus group meetings were organized in late March 2000. These sessionswere held at the workplace without the involvement of senior m a n a g e m e n t ~ that is, nomember of the senior management staff was present at these meetings. To ensure con-fldentiality and anonymity, and to minimize conflict of interest, I retained an inde-pendent and professional facilitator to conduct the f o c ~ s group meetings. While I didnot participate in these meetings, I did provide the facilitator with background information, including questions the facilitator should ask in the meetings. Appropriateinformed consent forms were completed and signed by each participating employee,with assurances ofanonymity provided by the facilitator to aU participants.


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These sessions served to provide feedback on questions relating to worker at-titudes toward commitment and performance. The three focus groups were organizedby shift to allow participation of all employees. In addition, machine. operators andtech support personnel were included in the focus groups. Each focus group sessionlasted approximately 2 hours, with a total of 14 employees attending these meetings,with each group consisting of four or five employees: The groups were audio-tapedand transcribed by the independent facilitator. The independent facilitator assuredparticipating employees of confidentiality, and I was never given access to the audio-tapes of the focus group sessions.

Subsequent to the focus group meetings, the independent facilitator prepared awritten report, which was submitted at the end of May 2000. Receipt of the actualwritten transcripts of the focus group sessions, without individual identification, werenot presented to me until May 2001, almost 12 months after receipt of the facilitatorwritten report.

Bias in the ResearchThe action-oriented approach to the ARP has built in bias because of my sen-

ior management position in the company and my ability to alter and manipulate se-lected variables within the organization. To control for bias in the design and imple-mentation, I took a multiple approach through the use of surveys, review of corporaterecords and documents, focus group meetings, and review of he written transcripts ofthe focus group meetings.


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-.My observations were reviewed along with the transcripts of the focus groupmeetings to provide a deeper understanding of he dynamics of the workplace, as f u r ~ ther discussed in Chapters 8 and 9. To ensure confidentialitY and anonymity, t h e l o c a ~ tion of the facility, name of the operation, type ofbusiness, and ~ a m e s ofall e m p l o y ~ ees have been disguised. Fictitious names were assigned to assure confidentiality ofindividuals.

I recognized that a Hawthorne effect could serve to mitigate or explain increased productivity or performance in the manufacturing facility. No doubt as a

member of senior management I possessed a vested interest in the welfare of theworkers and employed power within the organization, which can serve to explain orinfluence the overall outcome in productivity, performance, and commitment At thesame time, the presence of the Hawthorne effect may have served to illustrate thenegative and positive attributes of leadership in small organizations on productivity,perfomlance, and commitment as revealed through the focus group meetings.

Another concern was differentiating recorded observations from my own biasand opinions. Eliminating my bias and subjectivity was difficult This aspect of myresearch could have impacted on the integrity of the research and was difficult to re-move due to the nature and scope of this study. Also, the inherent existence ofpowerand authority in the CEO who is also the researcher served to mitigate or confoundresults or outcomes. It is virtually impossible to control for these inherent risks or f a c ~ tors associated with performing research of one's own workforce and organization.However, review of the transcripts of the focus group meetings presented o b s e r v a ~ tions from inside the minds ofworkers. This served as a countervailing factor, which


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offered me an opportunity to develop a fresh and alternative perspective as researcheroutside my position as CEO of he organization.

Validity IssuesAs the CEO of the organization being studied, I was able to control a number

of activities within the organization. But the use ofaction research made it difficult toassume that conventional rules of research could apply due to the. nature of humaninteraction and inquiry (Stringer, 1996). Triangulation ofdata through observations ofactivities, combined with review of production and operational records compiled byvarious individuals within the organization and access to the transcripts of the focusgroup meetings, helped to produce a more realistic analysis (Brewer & Hunter. 1989).Access and review of separate independent records when tied to the focus group tran-scripts served to minimize challenges to validity.

In regard to external validity, the outcomes of his. study may not be generaliz-able to other organizations as the research involves only one organization. However,recent studies on workplace innovations connect this study to others in the manufac-turing sector and can help extend its relevance to other small manufacturing organiza-tions.


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Introduction

CHAPTERSBACKGROUND OF THE ORGANIZATION

In writing this ARP, I found myself questioning how to provide a richer un-derstanding of what was happening in the organizational setting from the data col-lected and the findings from the focus group sessions. In this chapter, I provide aframework for reviewing the subsequent chapters presented on the organization bydescribing how I first attempted to study the organization and then how the studychanged through the focus group sessions.

An organization is comprised of complex forms of social activity defined byindividuals within the organization interacting with each other. The focus group find-ings, when reviewed in the context of this background chapter, provide a more com-plete perspective on the social dynamics taking placed in the small manufacturing organization researched.

BackgroundThe organization was formed in the early 1990s to provide precision machin-

ing for two larger manufacturing organizations. The business focus was the machining oflow- to mid-volume castings and forgings, ranging from 5,000 to 250,000 units


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per year. Since the two larger organizations' niche was machining higher volumeunits, in excess of 300,000 units per year, having a facility dedicated to machininglower volumes was ideal for providing a fuller scope of machining support to customers. These two customers would provide the castings to the organization to machine, which were then returned to them for shipment to their customers.

I arrived in the picture in the early part of 1997 as a result of shareholders inthe organiiation seeking to convert the entity to a minority business enterprise to takeadvantage of other procurement opportunities afforded to minority-owned automotiveparts suppliers, and to create a more diversified customer base. As a result of previouscontact with some of the shareholders of the organization, they approached me toconsider becoming involved in the organization as a working partner. Through theseinitial meetings, I met Dick, a shareholder who was the only working partner in theorganization and who had been instrumental in establishing the business operation.Dick was very clear in wanting a working partner inthe organization who could oversee the administrative, sales, and marketing responsibilities on a day-to-day basis. Bylate 1997 Dick, the other shareholders, and I reached a general understanding ongrowing the business, and I acquired controlling equity interest in the organization.

. To learn about the business, I interacted not only with Dick but also with theplant manager, Milton. Milton had over 15 years of supervision experience in anothermachining operation and had been with the organization approximately three years.Milton was responsible for handling the production scheduling, logistics, and qualityconcerns on the plant floor. In addition, Milton was responsible for hiring and firingall machine operators. It became evident that Milton and Dick often clashed over o p ~


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erational and process issues. Later, I learned that they also had different opinions onhow to operate the plant floor and on working with the workforce, especially when itimpacted on Dick's relatives.

During the first 12 months of joining the organization, I discovered that Dickemployed two relatives, a son, Bill, and a nephew, David, who made up the initialnucleus of the tech support group. Bill worked on the plant floor in maintenance andrepair of the machines, while David was in charge of job s e t ~ u p , changeover, andmaintenance of cutting tools. Bill and David had worked with Dick since the initialformation of the organization. Although technically Bill and David reported to Mil-ton, the plant manager, in practice both of them worked under the direct supervisionof Dick. Issues of discipline, promotion, and division of tasks pertaining to Bill andDavid often required input from Dick.

In addition, Bill dated another worker, Jane, the quality coordinator, who r e ~ ported to Milton on productivity and quality issues. Jane had started with the organi-zation at approximately the same time as Bill and David and had eventually joined thetech support group. The close personal relationship between Jane and Bill allowedBill to keep a pulse on what was going on on the plant floor and report back to hisfather, Dick. Later, the organization hired Dick's br9ther-in-Iaw, Steve, who eventu-ally became the plant supervisor.

My initial step was to formally convert the organization to a minority businessenterprise (MBE) to begin soliciting business with other potential customers. Also,after about 12 months in the organization, I saw an opportunity in early 1999 to d e ~ velop and implement an action plan that I saw as not existing in the organization prior


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to my arrival, and which I believed would enhaJ1,ce worker perfonnance and commitment. This plan included:

. Developing and distributing periodic employee newsletters in im effort toimprove communication Holding periodic on-the-job training sessions ofoperators Instituting worker tests on training development and skill enhancement Holding fonnal meetings with operators to air complaints and concerns Promoting development of non-White workers to semi-tech support personnel

Core Competency of the OrganizationThe organization owned a number of machining centers to provide machining

services to customers. These machining centers are viewed as flexible or CNC ma-chining centers since a number of jobs could be programmed to run on a single ma-chining center. This meant quick changeovers and quick set-up times in switchingfrom one job to another. For example, tech support personnel could replace holdingfixtures used in machining one job and start another job with other holding fixtures ina span of 15 to 30 minutes. This was a tremendous advantage when quoting on low-volume jobs, since such flexibility was unusual with smaller or minority-owned sup-pliers. It became clear that the organization's competitive advantage lay in offeringcustomers shorter lead times, as well as being able to accept jobs that other suppliersavoided due to being low volume and shorter-term contracts (typically three years).The machining centers on the plant floor served as a distinctive characteristic that setthe organization apart from the competition by offering more cost-competitive prices.


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TheWorkforceDuring the period of this research the organization employed approximately

40 employees (including administration). Overall, the entity was open approximatelytwenty hours per day, with a day shift and a night shift.

The organization was made up of three levels of employee: (1) senior manag-ers, (2) tech support group, and (3) machine operators.

SeniorManagersSenior managers were the upper level of the organization. Senior managers

were responsible for quoting on jobs, marketing, sales, hiring senior managers andperforming administrative tasks. This group consisted of Dick (my partner whoquoted jobs and programmed the machining centers to perform certain cutting opera-tions on the castings and forgings); the chief engineer, Fred; Milton, the plant man-ager (who was responsible for production scheduling, work assignment of laborers,and i n t ~ r a c t i n g with customers on quality issues); and me (in charge of administrativetasks such as invoicing, collections, payments to creditors, and marketing efforts).Annual salaries ranged between $70,000 and $120,000.

Personnel functions, such as hiring, firing, promotion, etc., were dividedamong Dick, Milton, and me. Personnel issues pertaining to the tech support group,especially when it impacted on a relative of Dick, were the responsibility of Dick,with my input. Personnel issues pertaining to the frontline workers, the machine op-erators, and other tech support members, were the responsibility of Milton, with myinput. Finally, control over profits and losses of the organization, marketing and sales,


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-.administration, and hiring senior managers (such as the quality manager) were myresponsibility, with input from Dick. All senior managers were. White except for me,a Hispanic.

Tech Support GroupThe second level consisted of mid-level supervisors and tech support, referred

to in subsequent chapters as the tech support group. This group consisted of the floorsupervisors, technicians, quality inspectors, tool and die makers, etc. In small organi-zations, individuals often perform multiple tasks. Tasks included making sure cuttingtools were properly maintained and machining centers were properly repaired andmaintained. In addition, this level worked closely with Dick in launching new jobsand in building the fixtures used in holding the castings, as well as performing certainprogramming function on the machining centers to ensure quality.

This group was responsible for ~ a i n t a i n i n g records on production and qualityon all jobs being machined, as well as for training and directly overseeing machineo p e r a ~ o r s . Approximately nine members made up the tech support group, with sevenemployees working the day shift and two members overseeing the night shift. Thisgroup was divided into two subgroups: the non-quality personnel who reported directly to Dick, such as BilI and David, and the quality personnel who reported directlyto Milton, such as Jane and Sue. Hourly rate for this level of worker ranged between$14.00 and $20.00. Except for Sue, who was African American, everyone was White.Also, this level of worker possessed a longer length of service with the organization,averaging between four and five years.


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Attributes of he tech support group were:1. Eighty percent were White and were related) directly or indirectly, toDiCk, my partner in the organization. .. .2. They resided primarily outside the inner city.3. Backgrounds varied but did include ex-felons and ex-drug abusers. Some -tech support workers fell within this category and were considered to bepart ofdirect labor, while others were classified as indirect labor.4. Most of this group had completed high school or at least the GED equivalent.5. Many tech support employees started working for the organization withlittle or no machining experience, and had moved up the ladder and attained seniority.6. The average length of service for this worker group was approximatelyfour years.7. Members of this group owned their means of transportation to and fromwork.

Machine Operator GroupThe third level, viewed by senior management and tech support group as the

lowest level, was the machine operators, som etimes referred to as the frontline work-ers or direct laborers. This group was specifically hired to run the machining center,which included properly loading and unloading parts onto the fixtures used in cuttingthe castings inside the machining centers, and inspecting the machined parts. The op-erators required no formal prior machine operator experience. Hiring, firing, andother disciplinary action was typically the responsibility of Milton. As I encouragedgreater verbal expressions from the frontline workers regarding plant floor activitiesduring the first four months of 1999, I began to review disciplinary actions proposed


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by Milton. Training was on-the-job and consisted of assigning an inexperiencederator to work with an experienced operator at.a specific machining center for five to

. seven days. Once deemed qualified to rim the machining center by a member of thetech SUPPo.rt gro.UP, the operato.r was assigned to that particular job and there was nofurther need to have the more experienced operator working with the newer operator.Tech support members sought to eliminate uncertainty and decision-making from op-erators in perfonning their tasks. Learning tasks beyond pushing the stop or go buttonof he machines were rare and not encouraged by tech support members.

An important aspect of working in the organization was that operators haveaccess to transportation to and from work every wo.rkday. There were about 23 directlabo.rers divided between day and night shifts. The racial profile of this wo.rk forcewas 95% African American during the time the focus gro.UP sessio.ns were held. Shiftin the wo.rkfo.rce co.mpo.sition to. 65% to 70% Hispanic operators began to. occur sub-sequent to June 2000. Length of. service for the operator group typically averaged lessthan 15 months, although this group did include more senior Mrican American opera-tors. Members of the day shift operators included Mo.ore, Jill, Hombre, Louise. andothers referenced in later chapters. Hourly rates for this level ranged between $7.50and $11.00, depending on length of service. The tech support group provided supervi-sion for this level.

The common characteristics of he machine operators were:1. Ninety-five percent of the machine operators during 1999 and the first sixmonths of 2000 were African Americans. Thereafter, the racial profile ofmachine operators changed to approximately 70% Hispanic operators,with 20% African Americans and the remaining 10% White.


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2. Operators resided in the inner city and included e x ~ f e l o n s and ex-drugabusers.3. Most a p p e ~ e d to have completed high school or at least the GED e q u i v a ~ lent.4. Approximately 90% of the operators were between the ages of25 and 45years and were seeking a "new beginning" or transition to a better life.S. Operators possessed little or no machining experience at the time of initial'hire.6. Approximately one half of the operators used public transportation or r e ~ quired some fonn of transportation assistance to get to work during 1999and the first six months of 2000. Hispanic operators never used publictransportation; instead, they shared automobile rides to and from workwith other Hispanic workers.7. Average length of service for machine operators at the start of he researchperiod was approximately six months. By the end of the research period,length of service averaged over 12 months.An organizational chart is included as Exhibit A in the Appendix to provide a

fuller Ulnderstanding of the organizational structure of the entity and the three levelsofworkers who were employed.

The Plant FloorThe organization was located in the suburb of a North Coast city, about 12 to

15 miles from the inner city. The facility consisted of approximately 24,000 squarefeet, with 19,000 square feet qevoted to plant floor and the remaining 5,000 squarefeet containing administrative offices. The plant floor was separated from the a d m i n ~ istrative offices by two offices for the plant floor supervisors and Bill and David. Toaccess the administrative offices or plant floor required going through the offices oftech support personnel.


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The plant floor, consisting of three rows of machining centers, was not airconditioned. The oldest machining centers were located on the south side of the plantfloor, while newer machining centers, often referred to as HMCs or horizontal machining centers, were located in the center and on the north side. There were approximately 11 machining centers on the floor. Each machining center was assignedan alphabetical letter, from A hrough L.

Of the 19,000 square feet reserved for the plant floor, 5,000 square feet wasreserved for shipping, receiving and storage of material, where more senior machineoperators, such as Moore, Hombre, and Jill were permitted to move material from onelocation to another by using a hi-Io. Another 1,000 square feet was reserved for thequality laboratory where two of the tech support

workforce development in a small manufacturing organization

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