Chapter 11 –

Work System Design

Operations Management
by
R. Dan Reid & Nada R. Sanders
2nd Edition © Wiley 2005
 Work System Design
 Designing a work system is part of
developing an operations strategy
 The work system includes:
 Job design
 Work measurements
 Worker compensation
 Job Design
 Definition: specification of the work activities for
an individual or group within an organizational
setting.
 Behavioral factors:
 Degree of labor specialization (advantages,
disadvantages).
 Job enlargement (vertical/horizontal) and job
enrichment.
 Physical considerations:
 Work-task continuum.
 Job Design Feasibility Issues
 Technical feasibility:
 Whether the job is within physical & mental
capabilities of the workforce
 Economic feasibility:
 Whether the cost of performing the job is less
than its added value
 Behavioral feasibility:
 Whether the job is intrinsically satisfying
 Job Design (Trends)
 Quality at the source.
 Cross-training—multi-functional workers.
 Employee involvement/creation of teams.
 Feedback systems.
 Outsourcing tasks.
 Automation
 Meaningful/rewarding jobs.
 Workplace Changes
 Labor/organizational changes.
 More technology, fewer workers and
organizational layers.
 Increased employee involvement.
 Composition (gender/ethnic diversity).
 Thus, managers have different roles.
 Mentors or coaches rather than “bosses.”
 Employee Empowerment
 Assume roles once owned by managers.
 Increases employee motivation and hence
productivity.
 Managers must share:
 Organizational performance information.
 Rewards (based on organizational performance).
 Knowledge/expertise needed to enhance
organizational performance.
 Decision-making power.
 Involvement
 Increases trust and commitment
 Improves employee communications and
attitudes
 Involved employees are more likely to
generate new ideas
 Involved employees achieve a higher quality
of work life which generates higher levels of
commitment leading to higher productivity
 Approaches to Involving
Employees
 Must be long-term, ongoing attempts
 Communications efforts
 feedback
 “bottom-up” communications
 attitude survey feedback
 suggestion systems
 team building and quality circles
 Teamwork
 Teams often outperform individuals.
 Self-managed teams have been found to
increase organizational performance.
 Responsible for many managerial actions:
 Work assignments.
 Work pace.
 Quality assessment.
 Hiring/firing.
 Cross-functional work teams (projects,
committees).
 Use of Teams
 Problem-solving teams:
 Small groups, trained in problem-solving techniques.
Used to identify, analyze, & propose solutions to
workplace problems
 Special-purpose task forces:
 Highly-focused, short-term teams with a focused
agenda (often cross-functional)
 Self-directed or self-managed teams:
 Team members work through consensus to plan,
mange, & control their assigned work flow
 QWL: Definition II
 “Quality of work life emphasizes improving the
human dimension of work.”
 HR should try to improve QWL “by:
 introducing participative problem solving,
 restructuring work,
 introducing innovative reward systems,
 improving the work environment.”

 [Source: Wheelen and Hunger, 2000, p. 99]

Work/Life Issues: State of Utah
Dept. of Workforce Services
 “Successful work/life programs can have a
tremendous bottom-line business impact by:
 Reducing turnover.
 Enhancing recruitment.
 Reducing absenteeism.
 Improving retention.
 Improving productivity.
 improving morale.
 Strengthening employee commitment.
 Work/Life Elements
 Child care.
 Elder care.
 Employer efforts.
 Health & wellness.
 Parenting/fathering.
 Recruiting/retention
 Telecommuting.
 The workplace.
 Work/life balance.
 [Source:
http://occ.dws.state.ut.us/WorkLife/dwsdefault.asp]
Work-task Continuum
 Job Characteristics Theory
(Hackman and Oldham, 1976)
 Critical Psychological States:
 experience meaningfulness of the work
 experience responsibility for work outcomes
 knowledge of results
 Core task dimensions
 skill variety
 task identity
 task significance
 autonomy
 feedback
Automation:
Factors to Consider
 Safety & risk of injury to workers
 Repetitive nature of the task
(monotonous?)
 Degree of precision required
 Complexity of the task
 Need for empathy, compassion, or
other emotional elements
 Customer acceptance of automation
 Management’s View
of Labor Specialization
Advantages: Disadvantages:
 Minimal training  High absenteeism
required  High turnover rates
 Reasonable wages  High scrap rates
costs  High number of
 High productivity employee grievances
 Readily available labor filed
 Employee’s View
of Labor Specialization
Advantages: Disadvantages:
 Minimal credentials  Boredom
required  Little growth
 Minimal opportunity
responsibilities
 Little control over work
 Minimal mental effort
 Little room for initiative
needed
 Little intrinsic
satisfaction
 Reasonable wages
 Eliminating Employee Boredom
 Job enlargement
 Horizontal expansion of the job by increasing the scope
of the work assigned
 Enhances pride of work and sense of accomplishment,
but reduces productivity
 Job enrichment
 Vertical expansion of the job by increased worker
responsibility—planning and inspecting
 Adds sense of control and enhances sense of pride
 Job rotation
 Shifting of cross trained workers to other tasks
 Broadens understanding and can reduce fatigue
 Alternative Workplaces
 Alternative workplaces are made possible by
technologies like email, e-networks, cell phones,
& video conferencing. Current situation:
 More than 30 million employees work in alternative
workspaces
 A survey at IBM reveals that 87% of alternative
workplace employees believe their effectiveness has
increased significantly
 Sun Microsystems gives many of its designers the
option to work at home
 GE sales people work from home and hotel offices
 Financial Incentive Plans
 Basic compensation systems: hourly pay, straight
salary, piece rate, commissions.
 Individual/group plans:
 Performance is rewarded based on measures of output
(similar to piece rates) and/or measures of quality.
 “pay for knowledge.”
 Organizational plans:
 Profit sharing.
 Gain sharing (based on costs/outputs, participative
management).
 Scanlon Plan: rewards employees for organizational
improvements.
 Work Methods Studies
 Individual/group operations: use charting
(operations charts, worker-machine charts,
simultaneous motion charts, activity charts)
with time studies or standard time data to
analyze/evaluate work efficiency.
 Overall operations: identify non-value-
adding (waste) and inefficient activities for
process/productivity improvement
 Study the Job
1. Picks up wire in left hand
and moves it to the
terminal
2. Simultaneously picks up
solder iron in right hand
and moves to the terminal
3. Solders wire to terminal
and replaces solder iron in
holder
4. Solders terminal #1, then
#2 - #6, going right to left
Flowchart the Process
 Importance of the Work Environment
 Working conditions can effect worker
productivity, product quality, and worker safety
 Temperature, ventilation, noise, and lighting are
all factors in work system design
 Congress passed OSHA in 1970 to mandate
specific safety conditions that must be met
 The Americans with Disabilities Act also outlines
reasonable workplace accommodations that
industry must make in hiring people with some
limitations
 Work Measurement
 Standard time:
 The length of time a qualified worker, using
appropriate tools & procedures, will take to
complete a job
 Standard time is used in:
 Costing the labor component of products
 Tracking employee performance
 Scheduling & planning required resources
 Setting Standard Times
 Step 1: Choose the specific job to be studied
 Step 2: Inform the worker of the study
 Step 3: Break the job into distinguishable
elements
 Step 4: Calculate the number of cycles to observe
 Step 5: Time each element, record data & rate
the worker’s performance
 Step 6: Compute the standard time
 Doing a Time Study
2
 When making a time study
 z  s 
several decisions are made to
assure desired results:
n    
 # of observations to make  a  x 
 Desired level of accuracy  n: number of observations
 Desired level of confidence for  z: provides desired statistical
the estimated standard time
confidence (e.g.: 1.96 for 95%)
 Desired accuracy level is  s: observed standard deviation
typically expressed as a % of
in time required to complete the
the mean observed times
task element
 In next column is a formula for
determining the number of
 a: desired accuracy or precision
observations needed  x-bar: the mean observed time
to complete the task
 Pat’s Pizza Place: Pat hires an analyst to determine a standard
time to prepare a large pepperoni and cheese pizza. He takes 10
observations of the 7 elements and calculates the mean time and the
standard deviation per element. He must then calculate the # of
observations to be within 5% of the true mean 95% of the time.
A B C D E
1 Example 11.3 Pat's Pizza Place
2 Standard Deviation Mean Observed Revised Observed
3 Work Element (minutes) Time (minutes) Time (minutes) # Observations
4 1. Get ball of dough 0.010 0.12 0.15 11
5 2. Flatten dough 0.030 0.25 0.25 23
6 3. Spin and toss dough 0.040 0.50 0.60 10
7 4. Place dough on counter 0.005 0.12 0.15 3
8 5. Pour sauce on formed dough 0.035 0.30 0.30 21
9 6. Place grated cheese on top 0.025 0.25 0.28 16
10 7. Place pepperoni on sauce 0.030 0.24 0.28 25
 The analyst must calculate the observations for each element to
determine how many additional observations must be taken. The
maximum number of 25 (in this case) for element #7 means that an
additional 15 observations must be made and then the observed
times are revised.  z  s 
2
 1.96  0.03 
2

n7          25 observatio ns
 a  x   0.05  0.24 
 Other Time Factors Used in
Calculating Standard Time
 The normal time (NT) is the mean observed time multiplied by
the performance rating factor (PRF)
 The PRF is a subjective estimate of a worker’s pace relative to a
normal work pace
 The frequency of occurrence (F) is how often the element must
be done each cycle.
 NT=(OT)(PRF)(F)
 The allowance factor (AF) is the amount of time allowed for
personal, fatigue, and unavoidable delays
 Standard Time=normal time x allowance factor, where:

1 1
AFTme Worked    1.176  117.6%
1  PFD 1  0.15
ST  (NT)(AF)
 Calculating Normal Time and
Standard Time at Pat’s Pizza
A B C D E F
12 Example 11.4 Calculating Standard Time for a Hand-Tossed Cheese and Pepperoni Pizza
13 Revised Observed Performance Rating Frequency Normal Time Standard Time
14 Work Element Time (minutes) Factor (minutes) (minutes)
15 1. Get ball of dough 0.15 0.90 1 0.135 0.159
16 2. Flatten dough 0.25 1.00 1 0.250 0.294
17 3. Spin and toss dough 0.60 0.85 1 0.510 0.600
18 4. Place dough on counter 0.15 1.10 1 0.165 0.194
19 5. Pour sauce on formed dough 0.30 1.20 1 0.360 0.423
20 6. Place grated cheese on top 0.28 1.00 1 0.280 0.329
21 7. Place pepperoni on sauce 0.28 0.95 1 0.266 0.313
22 Total Time 1.966 2.312

 The standard time for preparing a large, hand-tossed pepperoni

pizza is 2.312 minutes. This means that a worker can prepare 207
pizzas in an 8-hour shift (480 minutes divided by 2.312 minutes)
 Other Time Study Methods
 Elemental time data for typical work elements
from previously completed time studies can be
stored in a data base for use on future similar
studies.
 Predetermined time data (e.g. MTM and MTS) is
a larger database of valid work element times
used to set standards for common job elements
 Reach, grasp, move, engage, insert, turn, etc.
 Work Sampling is a technique for estimating the
proportion of time a worker spends on an activity
 Work Sampling Procedure
 Identify the worker or machine to be sampled
 Define the activities to be observed
 Estimate the sample size based on level of
accuracy and confidence level
 Develop the random observation schedule. Make
observations over a time period that is
representative of normal work conditions
 Observe, record data, and check to see if the
estimated sample size remains valid
 Estimate the proportion of the time spent on the
given activity
 Work Sampling Example: We are interested in estimating the
proportion of time spent by secretaries arranging and scheduling
travel. We are considering the possibility of bringing an on site travel
agency to free up secretaries from this time consuming task. We
estimate that the proportion might be as high as .50.
 Step 1 – We need to estimate the number of observations needed to provide
an estimate with 97% confidence (z=2.17), and the resulting estimate will be
within 5% of its true value. We use p

 0.5
2 2
z   2.17 
n    p 1  p     0.5 1  0.5  470.89 observations

e
   0.05 
 Step 2 – Based on the first 30 observations the secretary was making travel
reservations 6 times (6 out of 30 observations = 0.2). With this new estimate,
recalculate the sample size needed .

2
 2.17 
n  0.2 1  0.2  302 observations
 0.05 

 Final Step – After making the 302 observations, the secretary was making
reservations 60 times or 19.9%. This estimate can now be used to make the
decision on savings that might result by consolidating this task with an in
house travel agency
 Worker Compensation Systems
 Compensation is the third part of work system design
 Time-based plans (day pay) versus output-based systems
(incentive pay)
 Group incentive plans: profit sharing & gain sharing
 Plans put part of a worker’s salary at risk
 Does the compensation system undermine teamwork?
 Does plan prevent free-riders not doing their fair share?
 Does the incentive plan encourage workers to support the long-
term health of the organization?
 Learning Curves
 When the number of times the task is
repeated doubles, the time per task
reduces as shown in the graph
 With an 85% learning curve rate, the
2nd time a task is done will take 85%
of the 1st time.
 The 4th time will take 85% of the 2nd
T x Ln = time required to perform
 If an employee took 12 hours to a task the nth time
complete an initial task, how long will T = the time required to perform
the 16th time take (4th doubling) the task the first time
L = the rate of learning
Hours for 16th task  12 x (.85)4  6.26 hours n = the number of times the task
has doubled
 Chapter 11 Highlights
 Work system design involves job design, work
measurements, and worker compensation.
 Relevant job design issues include design feasibility, the
choice of human or machine, the use of teams, and the
location where the work is to be done.
 Methods or process analysis is concerned with how the
employee does the job and is used to make
improvements.
 Work measurement is used to determine standard times
and are usually based on time studies. Standard times
are used for product costing, process evaluations, and for
planning workloads and staffing.
 Chapter 11 Highlights (Continued)
 Doing a time study requires breaking the job into work
elements and determining the number of observations.
 Work sampling involves random observations of a worker
to determine the proportion of time spent on each
activity.
 Standard times are developed with time studies,
elemental time data, and predetermined time data.
 Worker compensation systems are time-based or out-put
based and can be based on individual or group
performance.
 Learning curves show the rate of learning that occurs
when an employee repeats the same task over time.
 Chapter 11 Homework Hints
 11.5: calculate normal time (NT)
 11.6: use NT from 11.5 and allowance factor—job time
[AFJOB] to calculate standard time (ST)
 11.7: use the total ST from 11.6 to calculate the number of
units.
 11.8: use NT from 11.5 and allowance factor—time worked
[AFTIME WORKED] to calculate ST
 11.9: use the total ST from 11.8 to calculate the number of
units.
 11.10: check the book for help in finding “other factors” to
choose between the two models calculated above.
 11.19: refer to example 11.6 and use table 11-9 for data to
calculate the time based on the learning curve.
 Note that each problem is worth 5 points for a total of 35
points for the assignment.