Chapter 10

Human Resources, Job

Design, and Work
Measurement

Sreejith Balasubramanian
Chapter 10: Learning Objectives
You should be able to:

1. Describe labour-planning policies

2. Identify the major issues in job design
3. Identify four ways of establishing labor standards
4. Describe and compare time study methods and perform
calculations
5. Describe work sampling and perform calculations
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
Constraints on Human Resource Strategy

Product strategy Process strategy

• Skills needed • Technology
• Talents needed • Machinery and

e
W

ur
• Materials used ha equipment used

ed
t

oc
• Safety • Safety

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

Location strategy Layout strategy

• Climate • Fixed position
re

H
he

• Temperature • Process
ow
W

• Noise • Assembly line

• Light • Work cell
• Air quality • Product
Human Resource
Strategy
Three distinct decision areas:
▶ Labour planning
▶ Job design
▶ Labour standards
Labour Planning
Job design
Labour standards
 Determining staffing policies that deal with employment
stability, work schedules and work rules.
 Employment stability
 Deals with the number of employees maintained by an
organization at any given time.
 Two basic policies: (1) Follow demand exactly, (2) Hold
employment constant
 Work schedules
 Standard is five eight-hour days
 Others include: flextime, flexible workweek, part-time
 Work rules
 Specify who can do what, when they can do it, and under
what conditions usually as a result of union pressure.
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
Labor Planning

Employment Stability Policies

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
Labour Planning
Job design
Labour standards

Specifying the tasks that constitute a job for an

individual or a group
1. Job specialization – division of labor into unique tasks
2. Job expansion – adding more variety to the jobs
3. Psychological components – how to design jobs that
meet some minimum psychological requirements
4. Self-directed teams – group of empowered individuals
working together to reach a common goal
5. Motivation and incentive systems – e.g. bonuses,
profit sharing, and incentive systems
Labour Planning
Job design
Labour standards

Job expansion
▶ Adding more variety to jobs
▶ Intended to reduce boredom associated with labour
specialization
▶Job Enlargement
▶Job Rotation
▶Job Enrichment
▶Employee empowerment
Labour Planning
Job design
Labour standards

▶ Job expansion
▶ Job Enlargement
Giving a worker tasks requiring similar skill, by
horizontal expansion
▶ Job Rotation
Workers periodically exchange jobs
▶ Job Enrichment
Giving an worker more responsibility including some of
the planning and control necessary for job
accomplishment, by vertical expansion
▶ Employee empowerment
Enriching jobs so that the responsibility and authority
are moved to the lowest level possible
Job Design Continuum

Self-directed
teams
Increasing
Empowerment reliance on
employee’s
Enrichment contribution
and increasing
Enlargement responsibility
accepted by
Specialization employee

Job expansion
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 human interface with the
environment and machines
▶ Often called
human factors
▶ Operator input
to machines needs
to be carefully
evaluated
 Ergonomics and Work Methods

▶ Feedback to operators
▶ The work environment
▶ Illumination
▶ Noise
▶ Temperature
▶ Humidity
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
 Micro-motion charts
Process
Chart
Activity Chart

Figure 10.6
Labour Planning
Job design
Labour 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
Labour Planning
Job design
Labour standards

1. Meaningful standards help determine:

2. Labour content of items produced
3. Staffing needs
4. Cost and time estimates
5. Crew size and work balance
6. Expected production
7. Basis of wage-incentive plans
8. Efficiency of employees
Labour Planning
Job design
Labour standards

May be set in four ways:

1. Historical experience
2. Time studies
3. Predetermined time standards
4. Work sampling
Historical experience
▶ Standard Elemental Times are derived from a
firm’s own historical time study data.
▶ 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
 Time Studies
▶ Timing a sample of a worker’s performance and using it to
set a standard
▶ Basic procedures:
1. Define the task to be studied and inform the worker
who will be studied
2. Determine the number of cycles to observe
3. Time the job, and rate the worker’s performance
4. Compute the standard time
Time Studies
 Development of a time standard involves computation of
three times
 Observed Time

 Normal Time

 Standard Time

25
Time Studies

 Observed Time
 The average of the observed times

OT 
 x i

n
where
x i Sum of observed times
n Number of obserations

26
Time Studies
 Normal Time
 The observed time adjusted for worker performance (pace)
 Computed by multiplying the observed time by a
performance rating,

NT OT PR
 If performance ratings are made on an element-by-element
basis,

NT  x j PR j
where
x j Average time for element j
PR j Performanc e rating for element j
Time Studies
Standard Time
 The normal time multiplied by an allowance factor for the
delays such as personal delays, unavoidable delays, or
rest breaks
NT
ST 
1 - Allowance factor

28
In Class Exercise
After being observed many​times, a hospital lab​analyst, had an average
observed time for blood tests of 14 minutes.​His performance rating is 105​
%. The hospital has a​personal, fatigue, and delay allowance of 18​%.

Find normal time and standard time

29
In Class Exercise
Performance rating is given as 85​%. For a given personal
allowance of 6​%, find the average observed time, normal time
and observed time using the following table

30
Time Studies – In Class Exercise
A time study was conducted on a job that contains two elements. The
observed times and performance ratings for five cycles are shown in
the following table. Assuming an allowance factor of 16 percent of job
time, compute the standard time for this job

OBSERVATIONS (minutes per cycle)

Performance
Element
Rating (%)
1 2 3 4 5
1 85 1.5 1.51 1.47 1.51 1.49
2 110 0.84 0.89 0.77 0.83 0.86
Time Studies – In Class Exercise
Ex.) A time study was conducted on a job that contains two elements. The
observed times and performance ratings for five cycles are shown in
the following table. Assuming an allowance factor of 16 percent of job
time, compute the standard time for this job
OBSERVATIONS (minutes per cycle)
Performance
Element
Rating (%) 1 2 3 4 5
1 85 1.5 1.51 1.47 1.51 1.49
2 110 0.84 0.89 0.77 0.83 0.86
For element 1, For element 2,
1.5  1.51  1.47  1.51  1.49 0.84  0.89  0.77  0.83  0.86
OT  1.50 OT  0.84
5 5
PR 0.85 PR 1.10
AF 0.16 AF 0.16
NT OT PR 1.50 0.85 1.28 NT OT PR 0.84 1.10 0.92
NT 1.28 NT 0.92
ST   1.52 ST   1.10
1  AF 1  0.16 1  AF 1  0.16
The standard time for this job = 1.52+1.10=2.62
 In Class Exercise

*​ Employee has lengthy conversations with boss​(not job​related).

By agreement with her​ workers, Jill allows a 10​% fatigue factor and a12​% ​
personal-time factor. To compute the standard time for the work​operation,
Jill excludes all observations that appear to be unusual or nonrecurring. She
does not want an error more than 5​%. ​

a) Find normal time of the process

b) Find standard time of the process
33
Sample Size Required

 Timing a sample of a worker’s performance

and using it to set a standard
 Basic procedures:

1. Define the task to be studied and inform the

worker who will be studied
2. Determine the number of cycles to observe
3. Time the job, and rate the worker’s performance
4. Compute the standard time

34
Determine Sample Size
 How accurate we want to be

 The desired level of confidence

 How much variation exists within the job elements

2 2
 zs   zs 
n   or n  
where  hx   e
n required sample size
z number of standard deviations required for desired confidence
s standard deviation of the initial sample
h accuracy level (acceptable error) desired in percent of the job element,
expressed as decimal (e.g. 5%=0.05)
e absolute time amount of acceptable error (e.g. 1 minute of error is acceptable)
x mean of the initial sample
Common z Values

Z-VALUE (STANDARD
DESIRED DEVIATION REQUIRED
CONFIDENCE (%) FOR DESIRED LEVEL OF
CONFIDENCE)
90.0 1.65
95.0 1.96
95.45 2.00
99.0 2.58
99.73 3.00
Sampling – In Class Exercise
A time study analyst wants to estimate the time required to perform a
certain job. A preliminary study yielded a mean of 6.4 minutes and a
standard deviation of 2.1 minutes. The desired confidence is 95
percent. How many observations will he need if the desired maximum
error is
a. ±10 percent of the sample mean?

x 6.4
s 2.1
z 1.96
h 0.1
2 2
 zs   1.96 2.1 
n     41.36  42
 hx   0.16.4 
Sampling In-Class Exercise
How many work cycles should be timed to estimate the average cycle
time to within 2 percent of the sample mean with a confidence of 99
percent if a pilot study yielded these times (minutes): 5.2, 5.5, 6.3, 5.3,
5.5, and 5.1?

z 2.58 due to 99% confidence h 0.02 n 6

5.2  5.5  6.3  5.3  5.5  5.1 32.9
x  5.48
6 6

 
2
xi  x
s
n 1
5.2  5.48  5.5  5.48   6.3  5.48   5.3  5.48   5.5  5.48   5.1  5.48
2 2 2 2 2 2


6 1
0.43
2 2
 zs   2.58 0.43 
n     102.5  103
hx
   0.02 5.48 
Predetermined Time Standards
 Use of published data on standard elemental times
 Developed in the 1940s by the Methods Engineering
Council.
 The MTM (Methods-Time-Measurement) tables are
based on extensive research of basic elemental motions
and times.
 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
 Time values are in TMUs (Time Measurement Units)
 1 TMU = 0.0006 minutes
Predetermined Time Standards
 MTM table

Time values are in TMUs (Time Measurement Units)

1 TMU = 0.0006 minutes
Predetermined Time Standards

Reach 4 inches for the pencil 6TMU

Grasp the pencil 4TMU
Move the pencil 6 inches 10TMU
Position the pencil 16TMU
Insert the pencil into the sharpener 4TMU
Sharpen the pencil 120TMU
Disengage the pencil 8TMU
Move the pencil 6 inches 8TMU

The total normal time in minutes for sharpening the pencil​?

41
Work Sampling
 A technique for estimating the proportion of time that a
worker or machine spends on various activities and the
idle time.
 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
The work sampling procedure can be summarized in 5 steps:
1. Take a preliminary sample to obtain an estimate of the
parameter value (e.g. percent of time a worker is busy)
2. Compute the sample size required
3. Prepare a schedule for observing the worker at appropriate
times
4. Observe and record worker activities
5. Determine how workers spend their time (usually as a
percentage)
Work Sampling
 The appropriate sample size (nideal) can be determined
using

z p 1  p 
2

n
h2
where
n Required sample size
z Number of standard deviations needed for the desired confidence
h acceptable error level in percent (as a decimal)
p Sample proportion (of time worker is observed busy or idle)
Number of occurrences

Sample size
Work Sampling - Exercise
The manager of a small supermarket chain wants to estimate the
proportion of time stock clerks spend making price changes on
previously marked merchandise. The manager wants a 90 percent
confidence level. Based on previous experience, the manager believes
the proportion will be approximately 30 percent. What sample size
would the manager need in order to have the maximum error be no
more than ±5 percent?

z 1.65 due to 90% confidence

h 0.05
p 0.3
z 2 p 1  p  1.652 0.3 1  0.3
n 2
 2
228.69  229
h 0.05
Work Sampling – Exercise
In an initial survey designed to estimate the percentage of time air-
express cargo loaders are idle, an analyst found that loaders were idle
in 4 of the 50 observations. Based on the initial results, approximately
how many observations would you require to estimate the actual
percentage of idle time to within 6 percent with a confidence of 95
percent?
z 1.96 due to 95% confidence
h 0.06
Number of occurrences 4
p  0.08
Sample size 50
z 2 p 1  p  1.962 0.08 1  0.08 
n 2
 2
78.5  79
h 0.06
Work Sampling
▶ Advantages
 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
 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 and the Work Environment

 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