CHAPTER 5

Human Resources and

Job Design

MEM575
 LEARNING OUTCOMES
 Understand human resource strategy
constraints and manpower planning
 Understand Job design; labor
specialization, job expansion, motivation
and incentive systems, self directed teams,
ergonomics and work environment
 Apply and Analyze - Methods Analysis
 Apply and Analyze - Work measurement
and analysis (Labor standard)
 Human Resource Strategy
The objective of a human resource
strategy is to manage labor and
design jobs so people are effectively
and efficiently utilized

▶ Ensure that people:

1. Are effectively utilized within the constraints of
other operations management decisions
2. Have a reasonable quality of work life in an
atmosphere of mutual commitment and trust
 Constraints on Human Resource
Strategy
Product strategy Process strategy
• Skills needed • Technology
• Talents needed • Machinery and
• Materials used equipment used
• Safety • Safety

Schedules
Individual differences
• Time of day When Who
HUMAN • Strength and fatigue
• Time of year
RESOURCE • Information
(seasonal)
STRATEGY processing and
• Stability of
response
schedules

Location strategy Layout strategy

• Climate • Fixed position
• Temperature • Process
• Noise • Assembly line
• Light • Work cell
• Air quality • Product
Figure 10.1
 Human Resource Strategy
3 distinct decisions areas of HR strategy:
(requirement for effective HR strategy)

1. Labor planning – determining staffing policies

that deal with (1) employment stability policies,
(2)work schedules, and (3) job classification and
work rules
2. Job Design – specifies the tasks that constitute a
job for an individual or group
3. Labor Standards - amount of time required to
perform a job or part of a job formally or informally
(knowledge of the labor required)
 Labor Planning
Employment Stability Policies

1. Follow demand exactly

• Matches direct labor costs to production
• Incurs costs in hiring and termination, unemployment insurance,
and premium wages
• Labor is treated as a variable cost

2. Hold employment constant

• Maintains trained workforce
• Minimizes hiring, termination, and unemployment costs
• Employees may be underutilized during slack periods
• Labor is treated as a fixed cost
 Work Schedules
• Standard work schedule
Five eight-hour days
• Flex-time
Allows employees, within limits, to determine their own schedules
• Flexible work week
Fewer but longer days
• Part-time
Fewer, possibly irregular, hours

Job classification and Work rules

• Specify who can do what
• Specify when they can do it
• Specify under what conditions they can do it
• Often result of union contracts
• Restricts flexibility in assignments and consequently efficiency of
production
 Job Design
▶Specifying the tasks that constitute a job
for an individual or a group
1. Job specialization
2. Job expansion
3. Psychological components
4. Self-directed teams
5. Motivation and incentive systems
 Labor Specialization
• The division of labor into unique tasks
• First suggested by Adam Smith in 1776
1. Development of dexterity
2. Less loss of time
3. Development of specialized tools
• Later Charles Babbage (1832) added another
consideration
4. Wages exactly fit the required skill required
 Job Expansion
▶Adding more variety to jobs
▶Intended to reduce boredom associated
with labor specialization
▶Job enlargement
▶Job rotation
▶Job enrichment
▶Employee empowerment
 Job Enlargement
Figure 10.2
Enriched job
Planning
(Participate in a cross-
function quality
improvement team)

Enlarged job
Task #3 Present job Task #2
(Lock printed circuit (Manually insert and (Adhere labels
board into fixture for solder six resistors) to printed circuit
next operation) board)

Control
(Test circuits after
assembly)
Psychological Components of
Job Design
Human resource strategy requires
consideration of the psychological
components
of job design
 Hawthorne Studies
► They studied light levels, but discovered
productivity improvement was independent from
lighting levels
► Introduced psychology into the workplace
► The workplace social system and distinct roles
played by individuals may be more important
than physical factors
► Individual differences may be dominant in job
expectation and contribution
 Core Job Characteristics
Jobs should include the following
characteristics

1. Skill variety
2. Job identity
3. Job significance
4. Autonomy
5. Feedback
 Self-Directed Teams
▶Group of empowered individuals working
together to reach a common goal
▶May be organized for long-term or
short-term objectives
▶Effective because
▶Provide employee empowerment
▶Ensure core job characteristics
▶Meet individual psychological needs
 Job Design Continuum
Self-directed
Figure 10.3 teams

Empowerment

Self-direction
Enrichment

Enlargement

Specialization

Job expansion
 Self-Directed Teams
To maximize effectiveness, managers should
► Ensure those who have legitimate
contributions are on the team
► Provide management support
► Ensure the necessary training
► Endorse clear objectives and goals
► Financial and non-financial rewards
► Supervisors must release control
Benefits of Teams and Expanded Job
Designs
▶Improved quality of work life
▶Improved job satisfaction
▶Increased motivation
▶Allows employees to accept more
responsibility
▶Improved productivity and quality
▶Reduced turnover and absenteeism
 Limitations of Job Expansion

1. Higher capital cost

2. Individuals may prefer simple jobs
3. Higher wage rates for greater skills
4. Smaller labor pool
5. Higher training costs
 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
 Ergonomics and Work Methods
▶Feedback to operators
▶The work environment
▶Illumination
▶Noise
▶Temperature
▶Humidity
 Recommended Levels of
Illumination

Figure 10.4a
 Levels of Illumination
TASK CONDITION TYPE OF TASK ILLUMINATION TYPE OF
OR AREA LEVEL ILLUMINATION
Small detail, extreme Sewing, inspecting 100 Overhead ceiling
accuracy dark materials lights and desk lamp

Normal detail, Reading, parts 20-50 Overhead ceiling

prolonged periods assembly, general lights
office work
Good contrast, fairly Recreational facilities 5-10 Overhead ceiling
large objects lights

Large objects Restaurants, 2-5 Overhead ceiling

stairways, lights
warehouses
 Decibel Levels

Table 10.4b
 Methods Analysis

 Focuses on how task is performed

 Used to analyze
1. Movement of individuals or material
 Flow diagrams and process charts
2. Activities of human and machine and crew
activity
 Activity charts
3. Body movement
 Operations charts
 Flow Diagram

Welding

From
Storage bins
press
mach. Paint
shop
Mach. 3 Mach. 4
Machine 1

Mach. 2

Figure 10.5 (a)

Flow Diagram

Machine 4 Welding
Machine 3
Paint
Machine 2 shop
Machine 1
From
press Storage
mach. bins

Figure 10.5 (b)

 Process
Chart

Figure 10.5 (c)

© 2014 Pearson Education 10 - 29

Activity Chart

Figure 10.6
 Operation Chart
Figure 10.7
 Labor Standards
▶Effective manpower planning is
dependent on a knowledge of the labor
required
▶Labor standards are the amount of time
required to perform a job or part of a
job
▶Accurate labor standards help
determine labor requirements, costs,
and fair work
Meaningful Standards Help 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
 1. Historical Experience
▶How the task was performed last time
▶Easy and inexpensive
▶Data available from production records
or time cards
▶Data is not objective and may be
inaccurate
▶Not recommended
 2. Time Studies
▶Involves timing a sample of a worker’s
performance and using it to set a
standard
▶Requires trained and experienced
observers
▶Cannot be set before the work is
performed
 Time Studies

1. Define the task to be studied

2. Divide the task into precise elements
3. Decide how many times to measure
the task
4. Time and record element times and
rating of performance
 Time Studies
5. Compute average observed time
Sum of the times recorded to
Average perform each element
observed =
time Number of observations

6. Determine performance rating and

normal time
Average Performance
Normal time = observed x
rating factor
time
 Time Studies

7. Add the normal times for each

element to develop the total normal
time for the task
8. Compute the standard time

Total normal time

Standard time =
1 - Allowance factor
 Rest Allowances
▶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
 Rest Allowances
Allowance Factors (in percentage) for
TABLE 10.1
Various Classes of Work
1. Constant allowances:
(A) Personal allowance …………………………………….. 5
(B) Basic fatigue allowance ………………………………... 4
2. Variable allowances:
(A) Standing allowance …………………………………….. 2
(B) Abnormal position
(i) Awkward (bending) …………………………………. 2
(ii) Very awkward (lying, stretching) ………………….. 7
 Rest Allowances
Allowance Factors (in percentage) for
TABLE 10.1
Various Classes of Work
(C) Use of force or muscular energy in lifting, pulling, pushing
Weight lifted (pounds)
20 ……………………………………………………….. 3
40 ……………………………….................................. 9
60 ………………………………………………………. 17

Allowance Factors (in percentage) for

TABLE 10.1
Various Classes of Work
(D) Bad light
(i) Well below recommended ………………………… 2
(ii) Quite inadequate …………………………………… 5
(E) Noise level:
(i) Intermittent–loud …………………………..………. 2
(ii) Intermittent–very loud or high pitched ..…………. 5
 Time Study Example 1
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

Normal time 3.4 3.4

Standard time = = =
1 - Allowance factor 1 - .13 .87
= 3.9 minutes

© 2014 Pearson Education 10 - 43

 Time Study Example 2
Allowance factor = 15%

OBSERVATIONS (MIN) PERFORMANCE

JOB ELEMENT 1 2 3 4 5 RATING
(A) Compose and type letter 8 10 9 21* 11 120%
(B) Type envelope address 2 3 2 1 3 105%
(C) Stuff, stamp, and seal envelopes 2 1 5* 2 1 110%

1. Delete unusual or nonrecurring observations (marked with *)

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

© 2014 Pearson Education 10 - 44

 Time Study Example 2
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

© 2014 Pearson Education 10 - 45

 Time Study Example 2
5. Compute the standard time for the job

Total normal time

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

© 2014 Pearson Education 10 - 46

 Determine Sample Size

1. How accurate we want to be

2. The desired level of confidence
3. How much variation exists within the
job elements

© 2014 Pearson Education 10 - 47

 Determine Sample Size
æ zs ö
2

Required sample size = n = ç ÷

è hx ø
where h = accuracy level (acceptable error) desired in
TABLE 10.2
percent of the job element expressed as a
Common z-Values
decimal
z = number of standard deviations required for the z-VALUE
desired level of confidence (STANDARD
DEVIATION
s = standard deviation of the initial sample REQUIRED FOR
DESIRED DESIRED LEVEL
x = mean of the initial sample CONFIDENCE OF
(%) CONFIDENCE)
n = required sample size 90.0 1.65
95.0 1.96
95.45 2.00
99.0 2.58
99.73 3.00

© 2014 Pearson Education 10 - 48

 Time Study Example 3
TABLE 10.2
Desired accuracy with 5% Common z-Values
Confidence level = 95%
z-VALUE
Sample standard deviation = 1.0 (STANDARD
DEVIATION
Sample mean = 3.00 DESIRED
REQUIRED FOR
DESIRED LEVEL
CONFIDENCE OF
(%) CONFIDENCE)
h = .05 x = 3.00 s = 1.0 90.0 1.65

z = 1.96 (from Table S10.2) 95.0 1.96

95.45 2.00
99.0 2.58

æ zs ö
2
99.73 3.00

n=ç ÷
è hx ø
æ 1.96 ´1.0 ö
2

n=ç ÷ = 170.74 » 171

è .05 ´ 3 ø
© 2014 Pearson Education 10 - 49
 Time Study Example 3
Variations

If desired accuracy h is expressed as an absolute

amount, substitute e for hx , where e is the absolute
amount of acceptable error

æ zs ö
2

n =ç ÷
èeø

© 2014 Pearson Education 10 - 50

 Time Study Example 3
Variations
When the standard deviation s is not provided, it
must be computed

å( x - x ) å(Each sample observation - x )

2 2
i
s= =
n -1 Number in sample -1

where xi = value of each observation

x = mean of the observations
n = number of observations in the sample
© 2014 Pearson Education 10 - 51
3. 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
Figure 10.9
MTM Table
 MTM Example
Weight – less than 2 pounds Place accuracy – approximate
Conditions of GET – easy Distance range – 8 to 20 inches

TABLE 10.3 MTM-HC Analysis: Pouring Tube Specimen

ELEMENT DESCRIPTION ELEMENT TIME
Get tube from rack AA2 35
Uncap, 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
 4. 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
 Work Sampling
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
 Work Sampling
Determining the sample size

n=
(
z 2 p 1- p )
h2
where n = required sample size
z = standard normal deviate for desired confidence level
p = estimated value of sample proportion
h = acceptable error level in percent (as a decimal)
 Work Sampling Example
Estimates employees idle 25% of the time
Sample should be accurate within ± 3%
Wants to have 95.45% confidence in the results

n=
(
z 2 p 1- p )
h2
where n = required sample size
z = 2 for a 95.45% confidence level
p = estimate of idle proportion = 25% = .25
h = acceptable error of 3% = .03

(2)2 (.25)(.75)
n= 2
= 833 observations
(.03)
 Work Sampling Example
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

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
Salespeople

Sales in Travel
person 20%
20%
Telephone
sales Paperwork
12% 17%
Lunch and
personal
10%
Telephone
within firm Meetings
13% and other
8%

Figure 10.10
© 2014 Pearson Education 10 - 60
 Work Sampling Time Studies
Startup/exercise
Assembly-Line 3%
Employees
Breaks and lunch
10%

Dead time
between tasks
13%
Productive Unscheduled tasks
work and downtime
67% 4%
Cleanup
3%

Figure 10.10
© 2014 Pearson Education 10 - 61
 Work Sampling
▶Advantages of work sampling
▶Less expensive than time study
▶Observers need little training
▶Studies can be delayed or interrupted with
little impact on results
▶Worker has little chance to affect results
▶Less intrusive
 Work Sampling

▶Disadvantages of work sampling

▶Does not divide work elements as
completely as time study
▶Can yield biased results if observer does
not follow random pattern
▶Less accurate, especially when
job element times are short
 Ethics
▶Fairness, equity, and ethics are
important constraints of job design
▶Important issues may relate to equal
opportunity, equal pay for equal work,
and safe working conditions
▶Helpful to work with government
agencies, trade unions, insurers, and
employees
 Let’s Recap
 Understand human resource strategy
constraints and manpower planning
 Understand Job design; labor
specialization, job expansion, motivation
and incentive systems, self directed teams,
ergonomics and work environment
 Apply and Analyze Methods Analysis
 Apply and Analyze Work measurement and
analysis