1、,Chapter 18,Employee Productivity,Overview,Productivity and Human Behavior Designing Workers Jobs Empowering Workers Work Methods Analysis Work Measurement Learning Curves Employees Health and Safety Wrap-Up: What World-Class Companies Do,Productivity,Productivity means the amount of products or ser
2、vices produced with the resources usedProductivity = Quantity of products or services producedAmount of resources usedProductivity varies with the amount of production relative to the amount of resources used.,Ways to Increase Productivity,Increase output using the same or a lesser amount of resourc
3、e. Reduce amount of resource used while keeping output constant or increasing it. Use more resource as long as output increases at a greater rate. Decrease output as long as resource use decreases at a greater rate.,Impact of Price/Cost Change on Productivity,When the cost of a resource increases an
4、d profit is to remain the same, some combination of the following must occur: output is increased resource usage is decreased price of output is increased,Why do We Care About Productivity?,Without productivity improvement, businesses do not survive in a global economy. Higher productivity means hig
5、her standard of living. The US has traditionally been the leader in productivity gains but other countries are closing the gap.,Single Factor Approach to Measuring Productivity,Capital - Number of products produced divided by asset value Materials - Number of products produced divided by dollars spe
6、nt on materials Direct Labor - Number of products produced divided by direct labor-hours Overhead - Number of products produced divided by dollars spent on overhead,Single Factor Approach to Measuring Productivity,Note that the productivity of a particular resource can be increased simply by replaci
7、ng some of this resource with a different type of resource. For example: If automation is substituted for direct labor and output volume is unaffected, direct-labor productivity increases (and capital productivity decreases). Our view of productivity must be toward improving the productivity of all
8、the factors of production.,Labor Productivity,For some firms, production labor (touch labor) represents a very small part of the firms total costs For other firms, particularly service firms, direct labor cost remains a significant cost and the need to improve labor productivity is still a serious c
9、oncern,Variables Affecting Labor Productivity,Physical work environment Technology, equipment, materials, lighting, layout Product quality Defects, scrap, rework Employee job performance Employee ability, motivation,Employee Job Performance,Motivation is perhaps the most complex variable in the prod
10、uctivity equation. Only unsatisfied needs are motivators. Maslow identified five basic needs: physiological, safety, social, esteem, and self-fulfillment. The higher level needs (social, esteem, and self-fulfillment) might hold the most promise for motivating. If productivity is seen as a way to ful
11、fill needs, higher productivity is likely to result.,Motivation,Formal organization Informal groups Job design Leadership Union Psychological needs Economic conditions Personal situations,Specialization of Labor,Advantages High production rates Low wage rates Low skill requirements Disadvantages Hig
12、h turnover, absenteeism, tardiness, grievances, sickness, and sabotage Low production quality,Modifying Jobs to Provide Broader Range of Needs Satisfaction,Cross-training - workers perform multiple jobs Job enlargement - adding similar tasks to workers job - horizontal job expansion Job enrichment -
13、 adding more management functions to job - vertical job expansion Team production - organizing workers into teams; assigning management responsibility to teams,Job Design,Can we simultaneously give workers the satisfaction they want from their work and still give the organization the productivity an
14、d efficiency to survive economically?,Guidelines for Designing Jobs and Work Environments,Workers Job Tasks Avoid machine pacing of workers Design jobs so that workers inspect their own output Open work areas for communication & visual contact Combine job planning into workers jobs Automate boring,
15、uncomfortable, or unsafe jobs,Guidelines for Designing Jobs and Work Environments,Immediate Job Setting Rotate jobs that are repetitive, monotonous, boring Assign new workers to undesirable jobs, then transfer them to more preferred jobs Recruit disadvantaged persons for high-turnover jobs Give rest
16、 periods to workers with repetitive jobs Set higher pay rates for undesirable jobs,Guidelines for Designing Jobs and Work Environments,Larger Work Environment Select/train supervisors who openly communicate Develop supervisors who are comfortable with a participative team environment Remove physical
17、 barriers between management and other employees Create climate that recognizes workers & work teams Develop formal/informal channels of communication in all directions,Empowering Workers,It is the employees who have control of, and know the most about, the details of production. To get employees to
18、 accept this responsibility, managers must first give employees the authority to act. The process of conveying authority from managers to workers is called worker empowerment. Workers accepting responsibility for production can lead to what is called internal ownership.,Steps of Work Methods Analysi
19、s,1. Make an initial investigation of the operation2. Decide what level of analysis is appropriate3. Get suggestions from anyone familiar with operation4. Thoroughly describe and evaluate present method5. Devise a new proposed method6. Compare new and present methods7. Modify the proposed method8. P
20、erform the proposed method on a trial basis9. Install the proposed method and train workers 10. Check on new method periodically,Work Measurement,Work measurement refers to the process of estimating the amount of worker time required to produce one unit of output. A goal of work measurement is to de
21、velop labor standards that can be used for planning and controlling operations.,Labor Standards,A labor standard is the number of worker-minutes required to complete an element, operation, or product under ordinary operating conditions. Ordinary operating conditions refers to a hypothetical average
22、situation average or typical worker, material, machinery, environment, etc.,Labor Standards,Labor standards are used in: Cost estimation Pricing of products and services Incentive pay systems Capacity planning Production scheduling,Labor Standards,A labor standard can be determined using one or more
23、 of the following approaches: Time study Work sampling Predetermined time standards - subjective - Historical standards Supervisor estimates,Time Study,Suitable Jobs Job performed by a single worker in a fixed location Job involves repetitive short cycles Job expected to continue unchanged for a lon
24、g period Job produces large quantities of output Resulting time standard must be very accurate,Time Study,Analysts use stopwatches to time the operation being performed by workers These observed times are then converted into labor standards The labor standards are expressed in minutes per unit of ou
25、tput for the operation,Determining Labor Standards from Time Studies,Observed Time,Normal Time,Standard Time,Performance Rating,Allowance Fraction,Determining Labor Standards from Time Studies,1. Make sure correct methods are being used to perform the operation being studied. 2. Break the operation
26、down into basic tasks (elements). 3. Determine how many cycles to time. A cycle is one complete set of the elemental tasks. 4. Observe and record the elapsed time for each element for the number of required cycles. . . more,Determining Labor Standards from Time Studies,5. For each element, estimate
27、the observed workers performance rating. A rating of 1.00 indicates the worker is working at normal speed. 6. Compute the allowance fraction for the operation. The allowance fraction is the fraction of time that workers cannot work through no fault of their own. . . more,Determining Labor Standards
28、from Time Studies,7. Compute the mean observed time for each element:(Sum of observed element times)(Number of cycles timed)8. Compute the element normal time for each element:= (Mean observed time) x (Performance rating). . . more,=,Determining Labor Standards from Time Studies,9. Compute the total
29、 normal time for the entire operation: = (Sum of element normal times for all elements)10. Compute the labor standard for the operation:= (Total normal time) / (1 - Allowance fraction),Example: Time Study Approach,In a time study of a manufacturing operation, the average time observed to complete a
30、product was 8.6 minutes. The performance rating applied to the observed worker was 0.95 and the allowance during an 8-hour shift was 12.5% or 60 minutes.Compute the labor standard.,Example: Time Study Approach,Observed time = 8.6 minutes Performance rating = 0.95 Allowance fraction = 0.125 Normal ti
31、me = Observed time x Performance rating= 8.6 x 0.95= 8.17 minutes Standard Time = Normal time / (1 - Allowance)= 8.17 / (1 - .125)= 8.17 / (0.875)= 9.337 minutes,Work Sampling,The work of one or more employees is randomly sampled at periodic intervals Noted is the proportion of the total operation t
32、hat is accounted for in one particular activity The results of these studies are used to: Set allowances used in labor standards Set labor standards,Work Sampling,Suitable Jobs Job performed by a single worker in a fixed location Job involves repetitive short cycles Job expected to be changed period
33、ically as customer orders change Job produces relatively small quantities of output Resulting time standard used for accounting cost standard, pricing analysis, and production planning,Example: Work Sampling,A work sampling study was performed on an electronic assembly operation at OK Instruments. T
34、he study covered an 8-hour shift with a single worker. The results of the study were:Activity % of Workers TimeAssemble Units 80Allowances 20If the worker received a performance rating of 1.20 on the Assemble Units activity and 400 units were assembled during the study, what is the labor standard fo
35、r this operation?,Example: Work Sampling,1) Compute the average time per assemble:= Total Minutes of Assembly WorkNumber of Units Assembled= .8(480)/400 = .960 minutes per unit2) Compute the normal time per unit:= (Average Time per Unit)(Performance Rating)= .960(1.20) = 1.152 minutes per unit,3) Co
36、mpute the labor standard:= Normal Time/(1 Allowance Fraction)= 1.152/(1 - .20) = 1.44 minutes per unit,Example: Work Sampling,Predetermined Time Standards,Commonly used for new operations or new products When labor standard must be determined in advance of performing an operation Utilize data that h
37、ave been historically developed for basic body movements, elements of operations, and entire operations Many predetermined time standard systems are used: Work factor Methods-time measurement (MTM) Basic motion time (BMT) study and others,Predetermined Time Standards,Suitable Jobs Job performed by m
38、any workers over a compact area Tasks may involve little repetition, but if repetitious the cycles are very long Workers must be observed by a single analyst A moderate degree of accuracy in the labor standard is desirable, but a time study is too costly Only large elements of work need to be observ
39、ed Little detail is needed in setting the time standard,Subjective Methods,Suitable JobsAny job or group of jobs in which: Very accurate labor standards are not required, or The cost of time study, predetermined time standards, and work sampling is prohibitive,Learning Curves,At the start of product
40、ion runs: Workers are unfamiliar with their tasks Time it takes to produce the first few units is highAs the workers learn their tasks: Their output per day increases up to a point Then their output levels off to a rather constant rate,Learning Curves,Most aircraft manufacturing tasks experience an
41、80% learning rate Labor-hours required to assemble an aircraft is reduced by a factor of 0.8 as the production quantity doubles If first aircraft assembled requires 100 labor-hours Second aircraft would require 80 labor-hours Fourth aircraft would require 64 labor-hours Eighth aircraft would require
42、 51.2 labor-hours and so on,Learning Curves,Learning Curves,By analyzing workers learning situations, we are able to estimate: The average number of labor-hours required per unit for N units in a production run The total number of labor-hours required to produce N units in a production run The exact
43、 number of labor-hours required to produce the nth unit of a production run,Learning Curves,Three approaches to learning-curve problems are: Arithmetic analysis Logarithmic analysis Learning curve tables,Learning Curves,Arithmetic Analysis The simplest approach to learning-curve problems If we wish
44、to find the labor-hours required to produce n units, and n just happens to be a number that is one of the doubled values, then this approach works,Example: EZ Machine Shop (A),Learning Curve - Arithmetic AnalysisEZ Machine Shop has a contract to manufacture 100 turbines. The first 20 turbines have b
45、een completed. The labor-hours required for a portion of the completed turbines are listed below. Use this data to estimate the shops learning rate in manufacturing the turbines.Unit No. Labor-Hours Unit No. Labor-Hours1 140 5 952 118 10 813 109 15 754 102 20 68,Example: EZ Machine Shop (A),Learning
46、 Curve - Arithmetic AnalysisCompute the learning rate for each of the “doubles”.Units 1 and 2 118/140 = .8429Units 2 and 4 102/118 = .8644Units 5 and 10 81/95 = .8526Units 10 and 20 68/81 = .8395(.8429 + .8644 + .8526 + .8395)/4 = .8499The approximate learning rate is 85%.,Learning Curves,Learning-C
47、urve TablesA table of learning curve coefficients (Table 18.12) allows us to compute: The labor-hours for the nth unit in a production run The total labor-hours for the entire production run, where the nth unit is the last unit in the run,Example: EZ Machine Shop (B),Learning-Curve TablesThe manager
48、 of EZ Machine Shop wants a good estimate of the total labor-hours required to manufacture the entire 100 turbines. Also, he is curious about how many labor-hours will be needed for the last (100th) unit. Use the observed 85% learning rate and 140 labor-hours required for the first turbine to comput
49、e your estimates.,Example: EZ Machine Shop (B),Learning-Curve TablesTotal Labor-Hours Required for 100 Units= (Hours for 1st unit)(Table total time: 85%, 100th unit)In Table 18.12, locate the line for the 100th unit and read across to the Total Time column under the 85% learning rate. The value is 4
50、3.75.Total Labor-Hours Required for 100 Units= 140(43.75) = 6,125 labor-hours,Example: EZ Machine Shop (B),Learning-Curve TablesLabor Hours Required for the 100th Unit= (Hours for 1st unit)(Table unit time: 85%, 100th unit)In Table 18.12, locate the line for the 100th unit and read across to the Unit Time column under the 85% learning rate. The value is .340.= 140(.340) = 47.6 labor-hours(100th unit will require 34% of the time 1st unit required),
