CHAPTER 10: JOB DESIGN AND WORK MEASUREMENT

Objectives of the Human Resources Strategy

The objective of a human resource strategy is to manage labor and design jobs to human
resources:
a.

Are efficiently utilized within the constraints of other strategic operations m

management decisions;

b.

Have a reasonable quality of work life in an atmosphere of mutual

commitment and trust.

By reasonable quality of work of life, we mean a job that not only is reasonable safe and
for which the pay is equitable, but also that achieves an appropriate level of both physical
and psychological requirements. By mutual commitment, we mean reasonable,
documented employment policies that are honestly and equitably implemented to the
satisfaction of both management and employees. When management has genuine respect
for its employees and their contribution to the firm, establishing a reasonable quality of
work life and mutual trust is not particularly difficult.
Human Resources Strategy Constraints
Many decisions that are made about human resources are constrained by other strategic
decisions. First, the product mix may determine seasonality and stability of employment.
Second, technology, equipment and processes, may have implications for safety and job
content. Third, the location decision may have an impact on the ambient environment in
which the employees work. Finally, decisions requiring layout may dictate, in large part,
job content.
The trade-offs between the technology available combined with location and layout
decisions and the proper capital investment decisions and quality of work life are pretty
difficult.
Of all the strategy decisions, the human resources strategy is as a result of the other
operative design decisions.

Labor Planning
Labor planning in determining staffing policies that deal with (i) employment
stability, (ii) work schedules and (iii) work rules.
Employment Stability Policies
The labor planning strategies consist of the following:
1. Follow Demand Exactly. Following demands exactly has the advantage of keeping
direct labor costs tied closely to production but incurs other costs. These other costs
include:
a. hiring and layoff costs
b. Unemployment insurance costs and
c. A labor wage premium to entice personnel to accept unstable employment. Such a
policy tends to treat labor as a variable cost.

2. Hold Employment Constant. Holding employment constant has the advantage of

maintaining a trained work force and keeping the hiring termination and
unemployment costs to the barest minimum. The demerit is that employees may not
be utilized fully when the demand is low, and the firm finds meeting demand difficult
when demand is high. Such a policy tends to treat labor as a fixed cost.

Work Schedules
Although the standard work schedule in the US is still five-eight hour days, many
variations exist. A currently popular variation to a work schedule is called flextime.
Flextime allows employees, within limits, to determine their own schedules. A flextime
policy might allow an employee (with proper notification) to be at work at 8.00a. m. plus
or minus two hours. This allows more autonomy and independence on the part of the
employees. Some firms have found flextime low-cost fringe benefit that enhances job
satisfaction. The problem from production work requires full staffing for efficient
operations. Having a waiter show up to serve lunch at 1:30 p.m. rather than 11:30 a. m. is
not much help either.
Some industries find that their process strategy has severely constrained their human
resources scheduling, option. For instance, proper manufacturing, petroleum refining, and
power stations must be staffed around the clock except for maintenance and repair
shutdown. Firms in these industries are severely constrained when implementing
variable-time policies.
Another work schedule is a flextime workweek. This often manifests itself in, four 10hour days. This works in many operations functions, provided suppliers and customers
can be accommodated. Firms that have high process star-up times (say to get a boiler up
to operating temperature or a plastic molding machine running properly) find longer
workdays options particularly appealing.
Another option is to have shorter days rather than those longer days. This often moves
employees to part-time status. Such an option is particularly attractive in service
industries, where staffing for peal levels is necessary. Banks and restaurants are frequent
practitioners of this technique. Additionally, many firms are able to achieve labor costs by
reducing fringe benefits for part-time employees.

JOB DESIGN
It specifies the tasks that constitute a job for an individual or a group. The components of
job design: 1) Job specialization, 2) Job expansion, 3) psychological components, 4) selfdirected teams, and 5) motivation and incentive systems/
Job Specialization
It is a division of labor into unique (special) tasks. According to Adam Smith this is
accomplished in several ways:
1. Development of dexterity and faster learning by the employee because of
repetition
2. Less loss of time because the employee would not be changing jobs or tools
3. Development of specialized tools and the reduction of investment because each
employee has only a few tools needed for a particular task.
The 19th century British mathematician Charles Babbage determined that a fourth
consideration was also important for labor efficiency. Because pay tends to follow skill
with a rather high correlation, he suggested paying exactly the wage needed for the
particular skill required.
Job Expansion
Moving from labor specialization toward more varied job design may improve the quality
work of life. Modifying jobs in a variety of ways include:

Job enlargement- the grouping of variety of tasks about the same skill

level; horizontal enlargement

Job rotation- a system in which an employee is moved from one

specialized job to another

Job enrichment- a method of giving an employee more responsibility that
includes some of the planning and control necessary for job

accomplishment; vertical expansion

Employee Empowerment- enlarging employee jobs so that the added
responsibility and authority is moved to the lowest possible.

Task
#3
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e for
next
opera
tion)

Enric
hed
job
job Enlarged
Pres
Tas

Planni
ent
Cont
job
ng
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(Parti
(Man
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ually
cipate
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and
crossafter
functi
solde
asse
ron
six
mbly
qualit
resis
)
tors)
y
impro
veme
nt
team)

Psychological Components of Job Design

k
#2
(Ad
her
e
lab
els
to
pri
nte
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rd)

An effective human resource strategy also requires consideration of the psychological

components of job design. These components focus on how to design jobs that meet
some minimum psychological requirements.
Hawthorne Studies
It introduced psychology to the workplace. These studies were initiated to determine the
impact of lighting on productivity.
Core Job Characteristics
Jobs should include the following characteristics
1. Skill variety - Requiring the worker to use a variety of skills and talents

2. Job Identity - allowing the worker to perceive the job as a whole and recognize
a start and a finish
3. Job Significance - providing a sense that the job has an impact on the
organization and society
4. Autonomy - offering freedom, independence, and discretion
5. Feedback - Providing clear, timely information about performance

Self- Directed Teams

-

A group of empowered individuals working together to reach a common goal.

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

effective because
-

Provide employee empowerment

Ensure core job characteristics

Meet individual psychological needs

Limitations of Job Design

Higher capital cost- Job expansion may require additional equipment and

facilities.
Individual differences- Some employees opt for the less complex jobs.
Higher wage rates Expanded jobs may well require a higher average wage.
Smaller labor pool Because expanded jobs require more skill and acceptance of

more responsibility, job requirements have increased.

Higher training costs Job expansion requires training and cross-training.

Motivation and Incentive Systems

Bonuses - cash or stock options

Profit-sharing - profits for distribution to employees

Gain sharing - rewards for improvements

Incentive plans - typically based on production rates

Knowledge-based systems - reward for knowledge or skills

Ergonomics and the Work Environment

Ergonomics is the study of the interface between man and machine

Often called
human factors

Operator input to machines

Feedback to operators
The work environment

Illumination

Noise

Temperature

Humidity

Focuses on how task is performed

Used to analyze
Movement of individuals or materials

Flow diagrams and process charts

Activities of human and machine and crew activity

Activity charts

Body movement

Operations charts

Buyer

7
You
5
f
t
.

Flow Diagram

SUBJECT: Request tool purchase

Dist Time
(ft) (min)
Symbol
Description
D

Write
order
D
desk
On
D
buyer
75
To
D

Examine
= operation; = transport; =
inspect; D = delay; = storage
Process Chart

Flow Diagram and Process Char of Axle- Stand Production at Paddy Hopkirk
Factory

Activity chart for Two Person Oil Change Crew

Operations Chart

The Visual Workplace

 Use low-cost visual devices to share information quickly and accurately

Displays and graphs replace printouts and paperwork
Able to provide timely information in a dynamic environment
System should focus on improvement

The third requirement of an effective human resource strategy is the establishment of

labor standard.
LABOR STANDARDS
-

are the amount of time required to perform a job or part of a job

started early in the 20th century
important to both manufacturing and service organizations
necessary for determining staffing requirements
important to labor incentive systems

Effective manpower planning is dependent on knowledge of the labor required

Accurate labor standards help determine labor requirements, costs, and fair work
Effective operations management requires meaningful standards that help a firm
determine:
1. Labor content of items produced
2. Staffing needs
3. Cost and time estimates
4. Crew size and work balance
5. Expected production
6. Basis of wage incentive plans
7. Efficiency of employees
Labor Standards may be set in four ways:
1.

Historical experience

2. Time studies

3. Predetermined time standards

4. Work sampling
Historical Experience
-

how many labor-hours were required to do a task the last time it was performed.

Easy and inexpensive

Data available from production records or time cards
Data is not objective and may be inaccurate
Not recommended

Time Studies
-

Involves timing a sample of a workers performance and using it to set a standard

Requires trained and experienced observers

Eight Steps:
1.
2.
3.
4.
5.

Define the task to be studied

Divide the task into precise elements
Decide how many times to measure the task
Time and record element times and rating of performance
Compute average observed time

A = Sum
v of the
e times
r recor
a ded to
g perfor
m
e
o each
b eleme
nt
s
e Num
r ber of
v obser
e vatio
d
ns
ti
m
e
6. Determine performance rating and normal time

Normal time =

Averag Perfor
x
e
mance
observ rating
ed
factor
time

7. Add the normal times for each element to develop the total normal time for the
task
8. Compute the standard time

Total
normal
Standard
time
= time
1 - Allowance factor

Personal time allowance

-

4% - 7% of total time for use of restroom, water fountain, etc.

Delay allowance
-

Based upon actual delays that occur

Fatigue allowance
-

Based on our knowledge of human energy expenditure

Sample Set of Personal and Fatigue Allowances
1.

Constant allowance

(ii)

Quite inadequate. 5

(A)

Personal allowance ...

(E)

Atmospheric conditions (heat and

humidity)

Basic fatigue allowance

Variable 0-10

(F)

Close attention:

2.

Variable allowances:

(i)

Fine or exacting..

(A)

Standing allowance

(B)

2
(ii)

Very fine or very exacting

(B)

Abnormal position

(i)

Awkward (bending)

(G)

Noise level:

(i)

Intermittentloud..

(ii)

Very awkward (lying,

stretching)

2
7

(C)Use of force or muscular energy in

(ii)

Intermittentvery loud
or high-pitched... 5

lifting, pulling, pushing

Weight lifted (pounds)

(H)

Mental strain:

(i)

Complex or wide span

20

of attention...4

(ii)

Very complex..
8

40.
9

(I)

Tediousness:

(i)

Tedious..
2

60.

(ii)

17

Very tedious.
5

(D)Bad light:
(i)

Well below recommended.

2

Example 1: Determining Normal and Standard Time

The time study of a operation at a Red Lobster restaurant yielded an average
observed time of 4.0 minutes. The analyst rated the observed worker at 85%. This means
the worker performed at 85% if normal when the study was made. The firm uses a 13%
allowance factor. Red Lobster wants to compute the normal time and the standard time
for this operation.
Solution:
Average observed time = 4.0 minutes
Worker rating = 85%
Allowance factor = 13%

Normal time = (Average observed time) x (Rating factor)

= (4.0)(.85)
= 3.4 minutes

Standard time =

3.4 3.4
Normal time
=
=
3.9
minutes
- .13 .87
1 - Allowance1 factor

Because the observed worker was rated at 85%, which is slower than average, the
normal time is less than the workers 4.0 minutes average time.

Example 2: Using Time Studies To Compute Standard Time

Management Science Associates promotes development seminars by mailing
thousands of individually composed and typed letters of mailing. On the basis of the
following observations. Management Science Associates wants to develop a time
standard for this task. The firms personal, delay, and fatigue allowance factor is 15%.

Job Element

Cycle Observ
(A)
Com
1
type
8
10
9

21*
11
(B)

120
Typ
enve
addr
2
3
2
1
3

(C)

105
Stuf
seal
2
1

2
1
Solution:
1. Delete unusual or nonrecurring observations (marked with *). * may be due to
business interruptions, conferences with the boss, or mistakes of an unusual; they
are not part of the job element, but may be personal or delay time.
2. Compute average times for each element
Average time for A = (8 + 10 + 9 + 11)/4 = 9.5 minutes
Average time for B = (2 + 3 + 2 + 1 + 3)/5 = 2.2 minutes
Average time for C = (2 + 1 + 2 + 1)/4 = 1.5 minutes
3. Compute the normal time for each element
Normal time = (Average observed time) x (Rating)
Normal time for A = (9.5)(1.2) = 11.4 minutes
Normal time for B = (2.2)(1.05) = 2.31 minutes
Normal time for C = (1.5)(1.10) = 1.65 minutes
4. Add the normal times to find the total normal time
Total normal time = 11.40 + 2.31 + 1.65 = 15.36 minutes
5. Compute the standard time for the job

Total
normal
Standard
time
= time
1 - Allowance factor
15.36
1 - .15
= 18.07 minutes

18.07 minutes is the standard time for this job.

110%
so
enve

Time study requires a sampling process so the question of sampling error in the average
observed time naturally arises. In statistics, error varies inversely with sample size.
To determine an adequate sample size, three items must be considered:
1. How accurate we want to be
2. The desired level of confidence
3. How much variation exists within the job elements

2
zs
Required
sample hx
size = n =

where

Common z-Values
Desired

z Value

Confidence

(standard deviation

(%)

required for desired

level of confidence)

h = accuracy
level desired in
percent of the job
element expressed
as a decimal
z = number of
standard
deviations
required for the
desired level of
confidence
s = standard
deviation of the
initial sample
x = mean of
the initial sample
n = required
sample size

90.0

1.65

95.0

1.96
2.00

95.45
99.0

2.58
3.00

99.73
Example 3: Computing Sample Size
Thomas W. Jones Manufacturing Co. has asked you to check a labor standard prepared by
a recently terminated analyst. Your first task is to determine the correct sample size. Your
accuracy is to be within 5% and your confidence level at 95%. The standard deviation of
the sample is 1.0 and the mean 3.00.
Solution:
Desired accuracy with 5%
Confidence level = 95%
Sample standard deviation = 1.0
Sample mean = 3.00

h = .05 x = 3.00 s = 1.0

z = 1.96 (from Table)

nzs2
hx
=

2
1.96
= x 1.0
.05 x 3
= 170.74
171
You recommend a sample size of 171.
Variations:
If desired accuracy h is expressed as an absolute amount, substitute e for hx, where e is
the absolute amount of acceptable error

nzs2
e
=
When the standard deviation s is not provided, it must be computed

(xi - x)2
n-1

s=

= (Each sam
Numb

where xi = value of each

observation
x = mean of the
observation
n = number of
observations in the sample

Predetermined Time Standards

-

Divide manual work into small basic elements that have established times

Can be done in a laboratory away from the actual production operation

Can be set before the work is actually performed

No performance ratings are necessary

Sample MTM Table
GET and PLACE Motion

Example 4: Using Predetermined Time (MTM Analysis) to Determine Standard

time

General Hospital was to set the standard time for lab technicians to pour a tube specimen
using MTM.
Element Description

Element

Time

Get tube from rack

AA2

35

Get stopper, place on counter

AA2

35

Get centrifuge tube, place at sample table

AD2

45

Pour (3 seconds)

PT

83

Place tubes in rack (simo)

PC2

40

Total TMU

238

.0006 x 238 = Total standard minutes = .14

Solution:
The first work element involves getting the tube from the rack. The conditions for
GETTING the tube and PLACING it in front of the technician are:
Weight - less than 2 pounds
Conditions of GET - easy
Place accuracy - approximate
Distance range - 8 to 20 inches
Then the MTM element for this activity is AA2.

Work Sampling
-

Estimates percent of time a worker spends on various tasks

Requires random observations to record worker activity

Determines how employees allocate their time

Can be used to set staffing levels, reassign duties, estimate costs, and set delay
allowances

Advantages of work sampling

Less expensive than time study
Observers need little training
Studies can be delayed or interrupted with little impact on results
Worker has little chance to affect results
Less intrusive
Disadvantages of work sampling
Does not divide work elements as completely as time study
Can yield biased results if observer does not follow random pattern
Less accurate, especially when job element times are short
Work-sampling Procedure
1. Take a preliminary sample to obtain estimates of parameter values
2. Compute the sample size required
3. Prepare a schedule for random observations at appropriate times
4. Observe and record worker activities
5. Determine how workers spend their time

Determining the sample size

zn2 p(1
= - p)
h2
where n

required sample size

standard normal deviate for desired confidence level

estimated value of sample proportion

acceptable error level in percent

Example 5: Determining the Number of Work Sample Observations Needed

The manager of Michigan Countys welfare office, Dana Johnson, estimates that
her employees are idle 25% of the time. She would like to take a work sample that
is accurate within 3% and wants to have 95.45% confidence in the results.
Solution:
Wants employees idle 25% of the time
Sample should be accurate within 3%
Wants to have 95.45% confidence in the results

z2np(1
= - p)
h2
where n

required sample size

2 for a 95.45% confidence level

estimate of idle proportion = 25% = .25

acceptable error of 3% = .03

n=

(2)2 (.25)(.75)
= 833 observations
(.03)2
Thus, 833 observations should be taken. If the percent of idle time
observed is not close to 25% as the study progresses, then the number of

observations may have be recalculated and increased or decreased as

appropriate.
Example 6: Determining the Employee Time Allocation with Work Sampling
Dana Johnson, the manager of Michigan Countys welfare office, wants to be sure her
employees have adequate time to provide prompt, helpful service. She believes that
service to welfare clients who phone or walk in without an appointment deteriorates
rapidly when employees are busy more than 75% of the time. Consequently, she does not
want her employees to be occupied with client service activities more than 75% of the
time.

No. of
Observations

Activity

485

On the phone or meeting with a welfare client

126

Idle

62

Personal time

23

Discussions with supervisor

137

Filing, meeting, and computer data entry

833
Solution:
All but idle and personal time are work related.
Percentage idle time = (126 + 62)/833 = 22.6%.
Since this is less than the target value of 25%, the workload needs to be adjusted.

Work Sampling Time Studies

These two work-sampling time studies were done to determine what salespeople do at a
wholesale electronics distributor and a composite of several auto assembly-line
employees.

ETHICS
Managements role is to educate the employee; specify the necessary equipment, work
rules; and work environment; and then enforce those requirements.