DESIGN & REDESIGN OF WORK SYSTEMS. Copyright 2005 South-Western. All rights reserved.

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1 CHAPTER 6: DESIGN & REDESIGN OF WORK SYSTEMS Copyright 2005 South-Western. All rights reserved.

2 Exhibit 6-1 Model for Design of Work Systems Copyright 2005 South-Western. All rights reserved. 1 2

3 Design of Work Systems Job Specialization Creates jobs with very narrow task (activity) assignments Resulted in high efficiency, quickly achieved job competency, low training costs, but created monotonous jobs Job Enlargement An increase in task variety to relieve boredom Job Rotation Employees moved across different specialized positions Enlargement and rotation add variety, but not necessarily responsibility Copyright 2005 South-Western. All rights reserved. 1 3

4 Job Enrichment Design of Work Systems Increasing amount of responsibility for quality and productivity that employees have for their own work Vertical Loading Reassignment of job responsibility formerly delegated to supervisor to the employee Copyright 2005 South-Western. All rights reserved. 1 4

5 Five Core Job Characteristics Skill variety Extent to which work allows employee to use variety of skills Task identity Extent to which work allows employee to complete whole or identifiable piece of work Task significance Extent to which employee perceives that work is important and meaningful to those inside or outside organization Autonomy Extent to which employee is able to work and determine work procedure at own discretion Feedback Extent to which work allows employee to gain sense of how well job responsibilities are met Copyright 2005 South-Western. All rights reserved. 1 5

6 Exhibit 6-2 Job Characteristics Model Copyright 2005 South-Western. All rights reserved. 1 6

7 What Workers Need Changing demographics & life styles Worker needs vary by age, gender, race, religion, physical abilities, sexual orientation, and marital and family status Employee needs for work/life balance Workers less committed to organizations today Also suffer from burnout and lower performance Employee needs representation ( voice ) Workers want to be involved in work-relatedrelated issues, and expect organization to listen to concerns Employee concerns about safety in workplace Workers want safe, hazard- free working environment Copyright 2005 South-Western. All rights reserved. 1 7

8 Types of Task Interdependence Pooled interdependence Individual employees work independently of each other in performing tasks but utilize coordination of activities Sequential interdependence Work in process flow is linear, from one individual to another One individual depends on timely completion of quality work from another coworker Reciprocal interdependence Workflow is random Responds to immediate situation Employees have joint and shared responsibilities for work Higher levels of interdependence require higher levels of coordination and attention Copyright 2005 South-Western. All rights reserved. 1 8

9 Redesign of Work Systems Current and future work systems more broadly defined, and more closely related to strategic choices Workers becoming more involved in design and reengineering of jobs Cross-function teams strategically beneficial Also create challenges in effectively managing themselves Employees raised in individualistic cultures need training to be effective team members Copyright 2005 South-Western. All rights reserved. 1 9

10 Outsourcing Involves contracting out some of organization s noncore work activities to outside specialists Can do work more effectively Often for less than cost of doing work in-house Areas frequently outsourced: Payroll Benefits Technological support More than 75% of organizations outsource at least one HR function Copyright 2005 South-Western. All rights reserved. 1 10

11 Outsourcing Can free up HR staff to focus on more strategic issues Considerations: Cost savings Whether contractor can deliver Compliance with laws Impacts on employees whose jobs might be lost Impacts on morale of remaining employees Copyright 2005 South-Western. All rights reserved. 1 11

12 Offshoring Involves exporting tasks and jobs to countries where labor costs are significantly less than in the U.S. India remains largest market Wages approximately 10% of those paid in U.S. Often considered good by local standards Challenge of managing virtual global teams Need for tight organizational and operational control to ensure coordination and communication Copyright 2005 South-Western. All rights reserved. 1 12

13 Offshoring Advantages Cost savings Extend work day to 24 hours Disadvantages Loss of domestic jobs Transfer of technical knowledge Public image/loyalty concerns Copyright 2005 South-Western. All rights reserved. 1 13

14 Mergers and Acquisitions Mergers pursued for a variety of reasons: Economies of scale in operations Consolidation in saturated markets Improving competitive position through larger asset base Two thirds of mergers fail Largely because of inability to merge cultural and other human factors Copyright 2005 South-Western. All rights reserved. 1 14

15 Barriers to Change Disrupting status quo may be met with resistance by both employees and managers Costs and reallocation of resources Employees will resist change unless they Perceive need to change See benefits from change Risk and uncertainty; no guarantee of improvements Poor coordination and communication can undermine change initiatives Copyright 2005 South-Western. All rights reserved. 1 15

16 To Overcome Resistance to Change Promote and implement change so it provides benefits to those impacted Involve employees in change process to increase their commitment to change Open, two-way way communication Early, before change decisions are made Dispel rumors Increase trust and acceptance of change by keeping employees informed and asking for input Copyright 2005 South-Western. All rights reserved. 1 16

17 Reading 6.1 (Nahavandi & Aranda) Restructuring Teams for Re-engineered engineered Organizations Reasons for using teams in organizations: Unlikely one individual will have all of the knowledge and information needed to make complex decisions Teams provide more buy-in to decisions Managers believe teams enhance motivation and productivity Facilitate acquisition and sharing of information vital to organizational growth and flexibility Facilitate variety of internal quality control initiatives Copyright 2005 South-Western. All rights reserved. 1 17

18 Reading 6.1 Restructuring Teams for Re-engineered engineered Organizations Problems with teams May fail without proper training and support Often poorly integrated into organization s hierarchy Individuals often feel their team contributions dilute personal success Few teams have found effective means to deal with freeloaders Usually not represented at top levels of organizations, sending a mixed message about their importance Copyright 2005 South-Western. All rights reserved. 1 18

19 Reading 6.1 Restructuring Teams for Re-engineered engineered Organizations Three keys to successful teams Value and endorse dissent Encourage fluidity of membership Enable teams to make decisions Copyright 2005 South-Western. All rights reserved. 1 19

20 Figure 1 Three Key Elements for Success of US Teams Copyright 2005 South-Western. All rights reserved. 1 20

21 Figure 2 Team Development Model Copyright 2005 South-Western. All rights reserved. 1 21

22 Supplement to Reading 6.1 (Werner & Lester, 2001) Research on Student Case Teams What predicts the performance of student teams? Team structure Team spirit Social support Workload sharing Communication Satisfaction positive strong positive strong positive positive not significant Grade strong positive strong positive negative not significant not significant Copyright 2005 South-Western. All rights reserved. 1 22

23 Reading 6.2 (Greer et al.) HRM Outsourcing: Make or Buy Decision Five competitive forces driving organizations to outsource HR activities: Downsizing Rapid growth or decline Globalization Increased competition Restructuring Copyright 2005 South-Western. All rights reserved. 1 23

24 Reading 6.2 HRM Outsourcing: Make or Buy Decision Operational rationales for outsourcing Small firms lack resources; large firms gain economies of scale Specialized HR expertise and objectivity Reduced liability and risk in legally sensitive HR areas Innovations and economies of scale in HRIS technology used by outside vendors Simplify transactions Reduce HR costs Copyright 2005 South-Western. All rights reserved. 1 24

25 Reading 6.2 HRM Outsourcing: Make or Buy Decision Operational rationales for outsourcing (continued): Time-sensitive issues better handled by outsourcing Temporary or cyclical increases in HR needs Efficient vendor management practices drive costs down more than economies of scale Specialized vendors offer activities as their core business and strategic focus Copyright 2005 South-Western. All rights reserved. 1 25

26 Reading 6.2 HRM Outsourcing: Make or Buy Decision Strategic rationales for outsourcing: Outsourcing nonstrategic activities permits HR to move away from administration toward strategic role Decentralization of HR function through redeployment of some of assets to operating units Develop less bureaucratic HR departments Downsizing may require HR to reduce staff, eliminating specialized in-house expertise Outsourcing provides big picture perspective Copyright 2005 South-Western. All rights reserved. 1 26

27 Reading 6.2 HRM Outsourcing: Make or Buy Decision Positive outcomes Lower HR costs Higher service quality Realignment or redeployment of internal HR expertise Development of negotiation and broker skills Enhanced credibility of HR function Risk and uncertainty absorption by HR vendor Copyright 2005 South-Western. All rights reserved. 1 27

28 Reading 6.2 HRM Outsourcing: Make or Buy Decision Negative outcomes Significant cost savings not always experienced Vendor switching costs Long-term vendor contracts Disruption of firm s culture Removal or distancing of HR function from employees Copyright 2005 South-Western. All rights reserved. 1 28

29 Reading 6.3 (Evangelista & Burke) Productivity in Downsizing Many downsizing firms face immediate challenge of keeping operations going with minimal staff Productivity often declines Survivors Working more hours Receive with bigger workload Morale often plummets Copyright 2005 South-Western. All rights reserved. 1 29

30 Typical problems Reading 6.3 Work Redesign Failure or inability to identify and categorize duties and assignments Failure to identify when employee is over- tasked Failure to see when business unit s demands exceed its capacity Copyright 2005 South-Western. All rights reserved. 1 30

31 Reading 6.3 Work Redesign: Task Categories Critical tasks Enable company to accomplish primary objectives Sub-critical tasks Need to be performed, but average standard of quality will suffice Minor tasks Add value to firm, but will not hinder operations or goals if left undone Unnecessary tasks Can be discarded because they drain resources Copyright 2005 South-Western. All rights reserved. 1 31

32 Reading 6.3 Work Redesign Output from work categorization process must be shared with all employees, so they have list of tasks for which they are accountable These tasks are used to drive performance management process Copyright 2005 South-Western. All rights reserved. 1 32