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Lecture 10

OM 300 Lecture 10: OM Chapter 10 Notes

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Operations Management
OM 300
David Cooper

Operations Management Chapter 10 Notes Human Resource, Job Design, and Work Measurement Human Resource Strategy • The objective of a human resource strategy is to manage labor and design jobs so people are effectively and efficiently utilized 1. People should be effectively utilized within the constraints of other operations management decisions 2. People should have a reasonable quality of work life in an atmosphere of mutual commitment and trust 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 schedule • 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 1. 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 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 • 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 wages 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 Methods Analysis • Focuses on how a 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 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 • Visual signals can take many forms and serve many functions ➢ Present the big picture ➢ Performance ➢ Housekeeping 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 th • Started early in the 20 century • Important to both manufacturing and service organizations • Necessary for determining staffing requirements • Important to labor incentive systems 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
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