Job Design

1. Introduction
Weve considered recruiting & training for XP Consulting. We just discussed decision making, a key part of job design. Now lets think about other important issues in job design
well see how to design jobs to make the best use of specific knowledge, spur creativity, & increase (intrinsic) motivation

Job design for UPS drivers

narrower, less decentralization, lower skills

These fit into two general patterns

Classical (UPS) narrow jobs, low discretion & skills Modern broad jobs, empowerment, higher skills
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Some Evidence on Job Design Patterns

Marginal Probabilities L M H (< median) (median) (> median) 0.251 0.540 0.209 0.190 0.610 0.200 0.194 0.603 0.203 0.185 0.619 0.196 Predicted LLLL MMMM HHHH 0.0017 0.1230 0.0017 0.0068 0.0102 0.0068 Actual 0.0534 0.2469 0.0617 0.0007 < 0.001 0.0007 1 1 1 1
A a ctu l P d d re icte

Skills Discretion Multitasking Interdependence

Attributes of a random sample of all jobs in the US economy Note tendency for job design to be coherent
jobs designed similarly in the same firm; even more so in the same establishment jobs designed similarly in the same occupation or industry
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Combinations of Job Design Characteristics 1L, 3H 2L, 2H 3L, 1H

31.2 2.0 37.1 0.1 > 0.1 0.1

Trends in Job Design

Recently there has been a trend away from the classical approach
consider these survey data on org. changes in Britain

Where
emphasis on continuous improvement, quality modern mfg. & flexible production Effects of Org. Change white collar work % of Employees With R&D
Tasks Responsibility Required skills More 63% 46% 50% Less 6% 3% 4%

With Modern design, more emphasis on

teams careful recruitment, job rotation, cross training pay for knowledge, team incentives

Our Tasks

Develop a theory of job design Use it to explain the patterns & trends Link it to our theory of decision making Understand implementation

2. Classical Job Design

Adam Smith: specialization
gains from trade, efficiency economizes on human capital investments

Frederick Taylor: industrial engineering

figure out the single most efficient process & replicate
squeeze out variations & uncertainty replicate, get economies of scale

Effects
assembly lines, long runs, narrow product lines centralized quality control job design: specialization, low skills, few decision rights
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3. Intrinsic Motivation
Core job characteristics Skill Variety Task Identity Task Significance Autonomy Meaningfulness of work Responsibility for outcomes of work Knowledge of actual results of work Intrinsic motivation Quality Low absenteeism & turnover Psychological states Work outcomes

Feedback

Skill (& Task) Variety

The key psychological idea: some jobs are more motivating, b/c they provide involvement & stretch
i.e., learning makes the job more intrinsically motivating implication: job enrichment, not specialization
multitasking & multiskilling

In addition to this psychological effect, job enrichment also helps develop specific knowledge
doing multiple interdependent tasks improves learning
workers see how tasks affect each other, improving productivity on each task learning how to improve quality, speed up work, reduce costs, etc.

this effect is more likely when work is complex & unpredictable

4. Two General Approaches to Job & Organizational Design

Classical: ex ante optimization (Taylorism) of methods
has substantial advantages if you can figure out best practices ex ante
effective use of central knowledge (e.g., talented engineers) all workers use best practices strong coordination & control (e.g., consistent output)

Modern: continuous improvement

more evolutionary approach
effective use of knowledge at lower levels requires knowledge management to share best practices creates coordination & control problems
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When to Use Which Approach?

Consider the Classical approach as an investment
up-front cost of optimization, amortized over future productivity gains

What does NPV of ex ante optimization depend on?

costs: how difficult is the optimization?
how complex is the process? the product? the product line? how stable was our history? have we already figured out best methods because weve done the same thing for a long time? how predictable is the environment? do things change constantly? can we foresee all contingencies & plan for them?

benefits:
how stable & predictable is our future expected to be? is our technology changing rapidly? is competition dynamic? will we have to re-optimize soon?

Emphasize ex ante optimization if environment is simple, stable & predictable; otherwise emphasize continuous improvement
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Buzzwords:
Classical v. Modern Jobs
Why the trend toward empowerment, TQM, etc.?
Taylorism less effective now more scope for continuous improvement
time based competition complex product lines; frequent changes rapid technological advances emphasis on quality & service rather than cost

job enrichment-type approaches are more effective

cultural change?

Thus, your structure & approach to job design should fit your product, technology, & industry conditions
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Notes on Classical v. Modern Jobs

Not all jobs should be enriched
what can be routinized, usually should be or even automated, computerized

Specialization & job enrichment are often balanced through job rotation Use a mix of both approaches
centralized tends to work better for major, one time disruptions (e.g., technology changes)
& improves knowledge management / transfer

decentralized tends to work better for incremental changes

& for implementation / tactics: decision management v. control

both are needed for different types of adaptation

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5. Implementation of Modern Job Design

What should XP Consulting consider in designing jobs? 1. Focus on multi-tasking more than multi-skilling
what kind of learning? new skills v. process & product improvements

2. Bundle complementary tasks together (once more, Modularize the process (Task Identity))
doing
skills, information & equipment proximity (physical or temporal)

results: parts or processes that work closely together focus on maximizing on-the-job learning opportunities examples
repeat work for same client direct relationships with client vertical loading (doing v. controlling or reducing decision control)

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Implementation
4. Decentralize (Autonomy + Feedback)
b/c workers have more specific knowledge in enriched jobs have employees collect performance metrics & monitor themselves teach employees to identify problems, suggest solutions, experiment
e.g., Juran on TQM (1989)

analyze symptoms theorize causes test theories establish causes simulate a remedy test remedy under operating conditions establish controls to hold the gain

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Implementation
5. Choose other policies to fit what youve done
teams
to achieve modularity / Task Identity for collaborative problem solving cross training & job rotation

career policies
careful recruitment to achieve proper Growth Need Strength cross training & job rotation training in particular, in problem solving

culture
overall goal / mission teamwork

incentives
may not be needed avoid punishment to encourage airing of problems & ideas
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Quick Questions

Are Happy workers productive workers?

Do extrinsic incentives destroy intrinsic motivation?

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6. Economic (& Psychological) Ideas

Specialization Intrinsic motivation Using job enrichment to create specific knowledge Ex ante optimization v. continuous improvement
external fit of HR policies with strategy & environment

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Summary Points
We developed a theory of both job & overall organizational design
& related it back to our discussion of decision making, & our overall theme of use of knowledge in org. design

Job enrichment can be powerful b/c there are 2 effects

psychology: intrinsic motivation economics: develop & use specific knowledge note that decentralization is complementary with intrinsic motivation one requires the worker to think; the other makes that more likely

Fit between policies tends to imply 2 rough patterns of organizational design (e.g., UPS v. Enrichment)
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