PART OF FINAL REVIEWER IN OM & TQM

WORK METHODS
 The principal approach to the study of work methods is the construction of charts, such as
operations charts, worker-machine charts, simo (simultaneous motion) charts, and activity
charts, in conjunction with time study or standard time data.
 The choice of which charting method to use depends on the task's activity level that is, whether
the focus is on (1) a production process, (2) the worker at a fixed workplace, (3) a worker
interacting with equipment, or (4) a worker interacting with other workers.

A PRODUCTION PROCESS

 The objective in studying a production process is to identify delays, transport distances.

processes, and processing time requirements to simplify the entire operation.
 The underlying philosophy is to eliminate any step in the process that does not add value to the
product.
 The process chart is valuable in studying an overall system, though care must be taken to follow
the same item throughout the process.
o Notation for the process chart
 Operation – something is actually being done
 Transportation – the subject of a study moves from one location to another
 Inspection – the subject is observed for quality and correctness
 Delay – the subject of the study must wait before starting the next step in the
process
 Storage – the subject is stored

WORKER AT A FIXED WORKPLACE

 Many jobs require the worker to remain at a specified workstation: When the nature of the work
is primarily manual (such as sorting, inspecting, making entries, or assembly operations), the
focus of work design is on simplifying the work, method and making the required operator
motions as few and as easy as possible
 There are two basic ways to determine the best method when a methods analyst studies a
single worker performing an essentially manual task.
1. The first is to search among the workers and find the one who performs the job best.
That person's method is then accepted as the standard, and others are trained to
perform it in the same way.
2. The second way is to observe the performance of a number of workers, analyze in detail
each step of their work, and pick out the superior features of each worker's
performance.

WORKER INTERACTING WITH EQUIPMENT

 When a person and equipment operate together to perform a productive process, interest
focuses on the efficient use of the person's time and equipment time. When the operator's
working time is less than the equipment run time, a worker-machine chart is a useful device in
analysis. If the operator can operate several pieces of equipment, the problem is to find the
 most economical combination of operator and equipment, when the combined cost of the idle
time of a particular combination of equipment and the idle time for the worker is at a minimum.

WORKERS INTERACTING WITH OTHER WORKERS

The degree of interaction among teams may be as simple as one operator handing a part to another, or
as complex as a cardiovascular surgical team of doctors, nurses, anesthesiologist, operator of an artificial
heart machine, X-ray technician, standby blood donors, and pathologist (and perhaps a minister to pray a
little). An activity or a gang process chart is useful in plotting each individual's activities on a time scale
similar to that of the worker-machine chart.

WORK MEASUREMENT AND STANDARDS

 The fundamental purpose of work measurement is to set time standards for a job. Such
standards are necessary for four reasons:
1. To schedule work and allocate capacity. All scheduling approaches require some
estimate of how much time it takes to do the work being scheduled.
2. To provide an objective basis for motivating the workforce and measuring workers
performance
3. To bid for new contracts and to evaluate performance on existing ones.
4. To provide benchmarks for improvement.

 There is also the argument that workers who find a better way of doing the job get penalized by
having a revised rate set (This is commonly called rate cutting.)

WORK MEASUREMENT TECHNIQUES

There are two common techniques for measuring work and setting standards,
1. Time study – separation of a job into measurable parts, with each element timed
individually.
– is generally made with a stopwatch, either on the spot or by analyzing a
videotape for the job.
 Some general rules for breaking down the elements are;
1. Define each work element to be short in duration but long enough so that it can
be timed with a stopwatch and the time can be written down.
2. If the operator works with equipment that runs separately (meaning the
operator performs a task and the equipment runs independently), separate the
actions of the operator and of the equipment into different elements
3. Define any delays by the operator or equipment into separate elements.

 Normal time – the time that a normal operator be expected to take to complete a
job without consideration of allowances.
 Standard time – is derived by adding to normal time allowances for personal needs
(such as washroom and coffee breaks), unavoidable work delays (such as equipment
breakdown or lack of materials), and worker fatigue (physical or mental). Two such
equations are Standard time Normal time + (Allowances Normal time)

2. Work sampling – analyzing a work activity by observing an activity at random times.

 – as the name suggests, work sampling involves observing a portion or sample of the
work activity. Then, based on the findings in this sample, statements can be made about
the activity.

WORK SAMPLING COMPARED TO TIME STUDY

Work sampling offers several advantages:

1. Several work-sampling studies may be conducted simultaneously by one observer
2. The observer need not be a trained analyst unless the purpose of the study is to determine a
time standard.
3. No timing devices are required.
4. Work of a long cycle time may be studied with fewer observer hours.
5. The duration of the study is longer, which minimizes effects of short-period variations.
6. The study may be temporarily delayed at any time with little effect.
7. Because work sampling needs only instantaneous observations (made over a longer period), the
operator has less chance to influence the findings by changing his or her work method.

 When the cycle time is short, time study is more appropriate than work sampling. One drawback
of work sampling is that it does not provide as complete a breakdown of elements as time study.

FINANCIAL INCENTIVE PLANS

The third piece of the job design equation is the paycheck. This section briefly reviews common methods
for setting financial incentives.

BASIC COMPENSATION SYSTEMS

 The main forms of basic compensation are hourly pay, straight salary, piece rate, and
commissions.
o The first two are based on time spent on the job, with individual performance rewarded
by an increase in the base rate.
o Piece rate plans reward on the basis of direct daily output. (A worker is paid $5 a unit;
thus, by producing 10 units per day, the worker earns $50.)
o Commissions may be thought of as sales-based piece rates and are calculated in the
same general way. The two broad categories of financial incentive plans are individual or
small-group incentive plans and organization wide plans.

 INDIVIDUAL AND SMALL-GROUP INCENTIVE PLANS

Individual and work group plan traditionally have rewarded performance by

using output (often defined by piece rates) and quality measures. Quality is
accounted for by a quality adjustment factor, say, a percentage of rework (For
example: Incentive pay Total output x 11-Percent deduction for rework).) In
recent years, skill development has also been rewarded. Sometimes called pay
for knowledge, this means a worker is compensated for learning new tasks.
  ORGANIZATIONWIDE PLANS

 Profit sharing simply distributes a percentage of corporate profits across

the workforce.
 Gain sharing also involves giving organization wide bonuses, but it
differs from profit sharing in two important respects. First, it typically
measures controllable costs or units of output, not profits, in calculating
a bonus. Second, gain sharing is always combined with a participative
approach to management

The basic elements of the Scanlon Plan are;

1. The ratio. The ratio is the standard that serves as a measure for judging business performance. It
can be expressed as Ratio = Total labor cost. Sales value of production
2. The bonus. The amount of bonus depends on the reduction in costs below the preset ratio
3. The production committee. The production committee is formed to encourage employee
suggestions to increase productivity, improve quality, reduce waste, and so forth. The purpose of
a production committee is similar to that of a quality circle
4. The screening committee. The screening committee consists of top management and worker
representatives who review monthly bonuses, discuss production problems, and consider
improvement suggestions.

PAY-FOR-PERFORMANCE

Business Week magazine ran a survey of compensation for company presidents. Salaries ranged from
$350,000 to $8 million. In every case there was an extra "kicker" (a healthy bonus for achievement of
certain goals in sales, profits, stock price, or the like). Despite gigantic salaries, every executive was
offered an incentive bonus.