Which of the following is the distinct characteristic of participative management programs?

BUS117 W2D2 Notes

How Can Jobs Be Redesigned?

“Every day was the same thing,” Frank Greer said. “Stand on that assembly line. Wait for an instrument panel to be moved into place. Unlock the mechanism and drop the panel into the Jeep Liberty as it moved by on the line. Then I plugged in the harnessing wires. I repeated that for eight hours a day. I don’t care that they were paying me twenty-four dollars an hour. I was going crazy. I did it for almost a year and a half. Finally, I just said to my wife that this isn’t going to be the way I’m going to spend the rest of my life. My brain was turning to JELL-O on that Jeep assembly line. So I quit. Now I work in a print shop and I make less than fifteen dollars an hour. But let me tell you, the work I do is really interesting. The job changes all the time, I’m continually learning new things, and the work really challenges me! I look forward every morning to going to work again.”

The repetitive tasks in Frank Greer’s job at the Jeep plant provided little variety, autonomy, or motivation. In contrast, his job in the print shop is challenging and stimulating. Let’s look at some of the ways to put JCM into practice to make jobs more motivating.

JOB ROTATION

If employees suffer from overroutinization of their work, one alternative is job rotation , or the periodic shifting of an employee from one task to another with similar skill requirements at the same organizational level (also called cross-training). At Singapore Airlines, a ticket agent may take on the duties of a baggage handler. Extensive job rotation is one of the reasons Singapore Airlines is rated one of the best airlines in the world and is a highly desirable place to work. Many manufacturing firms have adopted job rotation as a means of increasing flexibility and avoiding layoffs. Managers at Apex Precision Technologies, a custom-machine shop in Indiana, train workers on all the company’s equipment so they can move around as needed in response to incoming orders. During the 2001 recession, Cleveland-based Lincoln Electric moved some salaried workers to hourly clerical jobs and rotated production workers among various machines. This manufacturer of welding and cutting parts was able to minimize layoffs because of its commitment to continually cross-training and moving workers wherever they’re needed.

The strengths of job rotation are that it reduces boredom, increases motivation, and helps employees better understand how their work contributes to the organization. An indirect benefit is that employees with a wider range of skills give management more flexibility in scheduling work, adapting to changes, and filling vacancies. 4 However, job rotation is not without drawbacks. Training costs increase, and productivity is reduced by moving a worker into a new position just when efficiency at the prior job is creating organizational economies. Job rotation also creates disruptions when members of the work group have to adjust to the new employee. And supervisors may also have to spend more time answering questions and monitoring the work of recently rotated employees.

JOB ENRICHMENT

Job enrichment expands jobs by increasing the degree to which the worker controls the planning, execution, and evaluation of the work. An enriched job organizes tasks to allow the worker to do a complete activity, increases the employee’s freedom and independence, increases responsibility, and provides feedback so individuals can assess and correct their own performance. 5

How does management enrich an employee’s job? Exhibit 7.2 offers suggested guidelines based on the job characteristics model. Combining tasks puts fractionalized tasks back together to form a new and larger module of work. Forming natural work units makes an employee’s tasks create an identifiable and meaningful whole. Establishing client relationships increases the direct relationships between workers and their clients (clients can be internal as well as outside the organization). Expanding jobs vertically gives employees responsibilities and control formerly reserved for management. Opening feedback channels lets employees know how well they are doing and whether their performance is improving, deteriorating, or remaining constant.

Some newer versions of job enrichment concentrate more specifically on improving the meaningfulness of work. One significant method is to relate employee experiences to customer outcomes, simply by providing employees with stories from customers who benefited from the company’s products or services. The medical device manufacturer Medtronic invites people to describe how Medtronic products have improved, or even saved, their lives and shares these stories with employees during annual meetings, providing a powerful reminder of the impact of their work. Researchers recently found that when university fund-raisers briefly interacted with the undergraduates who would receive the scholarships they raised, they persisted 42 percent longer, and raised nearly twice as much money, as those who didn’t interact with potential recipients. 6

Another method for improving the meaningfulness of work is providing employees with mutual assistance programs. 7 Employees who can help each other directly through their work come to see themselves, and the organizations for which they work, in more positive, pro-social terms. This, in turn, can increase employee affective commitment.

The University of New Mexico provides job enrichment through cross-training to learn new skills and job rotation to perform new tasks in another position. To participate, employees work with their manager to set a job enrichment goal, identify desired competencies, and find an appropriate placement. Participation typically lasts 90 days, after which employees either return to their former position or obtain a new position that leverages their newfound skills.

Two university employees held administrative positions in the same academic department. One specialized in handling student records, and the other processed tuition payments. Through the enrichment program, the student-records assistant received cross-training in human resources (HR) classes to learn about purchasing and the accounting system. The accounting assistant worked with the student-records assistant 2 hours per week learning about that job. The two then proposed rotating their jobs for a summer. As a result, both expanded their repertoire of skills and experiences to enable them to cover for or help the other employee, and to better prepare for future promotions. 8

The evidence on job enrichment shows it reduces absenteeism and turnover costs and increases satisfaction, but not all job enrichment programs are equally effective. A review of 83 organizational interventions designed to improve performance management showed that frequent, specific feedback related to solving problems was linked to consistently higher performance, but infrequent feedback that focused more on past problems than future solutions was much less effective. 9 Some recent evidence suggests job enrichment works best when it compensates for poor feedback and reward systems. 10

Alternative Work Arrangements

Beyond redesigning work itself and including employees in decisions, another approach to motivation is to alter work arrangements with flextime, job sharing, or telecommuting. These arrangements are likely to be especially important for a diverse workforce of dual-earner couples, single parents, and employees caring for a sick or aging relative.

FLEXTIME

Susan Ross is the classic “morning person.” She rises each day at 5:00 AM sharp and full of energy. However, as she puts it, “I’m usually ready for bed right after the 7:00 PM news.”

Susan’s work schedule as a claims processor at The Hartford Financial Services Group is flexible. Her office opens at 6:00 AM and closes at 7:00 PM. It’s up to her how she schedules her 8-hour day within this 13-hour period. Because Susan is a morning person and also has a 7-year-old son who gets out of school at 3:00 PM every day, she opts to work from 6:00 AM to 3:00 PM. “My work hours are perfect. I’m at the job when I’m mentally most alert, and I can be home to take care of my son after he gets out of school.”

Susan’s schedule is an example of flextime , short for “flexible work time.” Employees must work a specific number of hours per week but are free to vary their hours of work within certain limits. As in Exhibit 7.3 , each day consists of a common core, usually 6 hours, with a flexibility band surrounding it. The core may be 9:00 AM to 3:00 PM, with the office actually opening at 6:00 AM and closing at 6:00 PM. All employees are required to be at their jobs during the common core period, but they may accumulate their other 2 hours before, after, or before and after that. Some flextime programs allow employees to accumulate extra hours and turn them into a free day off each month.

Flextime has become extremely popular; the proportion of full-time U.S. employees on flextime more than doubled between the late 1980s and 2005, and approximately 43 percent of the U.S. full-time workforce now have flexible daily arrival and departure

EMPLOYEE INVOLVEMENT

What is employee involvement? It’s a participative process that uses employees’ input to increase their commitment to the organization’s success. The logic is that if we engage workers in decisions that affect them and increase their autonomy and control over their work lives, they will become more motivated, more committed to the organization, more productive, and more satisfied with their jobs. 26

Examples of Employee Involvement Programs

Let’s look at two major forms of employee involvement—participative management and representative participation—in more detail.

PARTICIPATIVE MANAGEMENT

The distinct characteristic common to all participative management programs is joint decision making, in which subordinates share a significant degree of decision-making power with their immediate superiors. Participative management has, at times, been promoted as a panacea for poor morale and low productivity. But for it to work, the issues in which employees are engaged must be relevant to their interests so they’ll be motivated, employees must have the competence and knowledge to make a useful contribution, and trust and confidence must exist among all parties.

Dozens of studies have been conducted on the participation–performance relationship. The findings, however, are mixed. 27 Organizations that institute participative management do have higher stock returns, lower turnover rates, and higher estimated labor productivity, although these effects are typically not large. 28 A careful review of the research at the individual level shows participation typically has only a modest influence on variables such as employee productivity, motivation, and job satisfaction. Of course, this doesn’t mean participative management can’t be beneficial under the right conditions. What it says, however, is that it is not a sure means for improving employee performance.

REPRESENTATIVE PARTICIPATION

Almost every country in western Europe requires companies to practice representative participation , called “the most widely legislated form of employee involvement around the world.” 29 Its goal is to redistribute power within an organization, putting labor on a more equal footing with the interests of management and stockholders by letting workers be represented by a small group of employees who actually participate.

The two most common forms are works councils and board representatives. Works councils are groups of nominated or elected employees who must be consulted when management makes decisions about employees. Board representatives are employees who sit on a company’s board of directors and represent the interests of the firm’s employees.

As opposed to research on the job characteristics model and work redesign, which is mostly favorable, the research evidence on employee involvement programs is decidedly mixed. It is not clear that employee involvement programs have fulfilled their promise.

The influence of representative participation on working employees seems to be minimal. 30 Works councils are dominated by management and have little impact on employees or the organization. Although participation might increase the motivation and satisfaction of employee representatives, there is little evidence this trickles down to the operating employees they represent. Overall, “the greatest value of representative participation is symbolic. If one is interested in changing employee attitudes or in improving organizational performance, representative participation would be a poor choice.” 31

Linking Employee Involvement Programs and Motivation Theories

Employee involvement draws on a number of the motivation theories we discussed in Chapter 7 . Theory Y is consistent with participative management and Theory X with the more traditional autocratic style of managing people. In terms of two-factor theory, employee involvement programs could provide intrinsic motivation by increasing opportunities for growth, responsibility, and involvement in the work itself. The opportunity to make and implement decisions—and then see them work out—can help satisfy an employee’s needs for responsibility, achievement, recognition, growth, and enhanced self-esteem. And extensive employee involvement programs clearly have the potential to increase employee intrinsic motivation in work tasks.

USING REWARDS TO MOTIVATE EMPLOYEES

As we saw in Chapter 2 , pay is not a primary factor driving job satisfaction. However, it does motivate people, and companies often under-estimate its importance in keeping top talent. A 2006 study found that while 45 percent of employers thought pay was a key factor in losing top talent, 71 percent of top performers indicated it was a top reason. 32

Given that pay is so important, management must make some strategic decisions. Will the organization lead, match, or lag the market in pay? How will individual contributions be recognized? In this section, we consider (1) what to pay employees (decided by establishing a pay structure), (2) how to pay individual employees (decided through variable pay plans and skill-based pay plans), (3) what benefits and choices to offer (such as flexible benefits), and (4) how to construct employee recognition programs.

What to Pay: Establishing a Pay Structure

There are many ways to pay employees. The process of initially setting pay levels can be complex and entails balancing internal equity—the worth of the job to the organization (usually established through a technical process called job evaluation)—and external equity—the external competitiveness of an organization’s pay relative to pay elsewhere in its industry (usually established through pay surveys). Obviously, the best pay system pays what the job is worth (internal equity) while also paying competitively relative to the labor market.

Some organizations prefer to be pay leaders by paying above the market, whereas some may lag the market because they can’t afford to pay market rates, or they are willing to bear the costs of paying below market (namely, higher turnover as people are lured to better-paying jobs). Walmart, for example, pays less than its competitors and often outsources jobs overseas. Chinese workers in Shenzhen earn $120 a month (that’s $1,440 per year) to make stereos for Walmart. Of the 6,000 factories that are worldwide suppliers to Walmart, 80 percent are located in China. In fact, one-eighth of all Chinese exports to the United States go to Walmart. 33

Pay more, and you may get better-qualified, more highly motivated employees who will stay with the organization longer. A study covering 126 large organizations found employees who believed they were receiving a competitive pay level had higher morale and were more productive, and customers were more satisfied as well. 34 But pay is often the highest single operating cost for an organization, which means paying too much can make the organization’s products or services too expensive. It’s a strategic decision an organization must make, with clear trade-offs.

How to Pay: Rewarding Individual Employees Through Variable-Pay Programs

“Why should I put any extra effort into this job?” asked Anne Garcia, a fourth-grade elementary schoolteacher in Denver, Colorado. “I can excel or I can do the bare minimum. It makes no difference. I get paid the same. Why do anything above the minimum to get by?”

Comments like Anne’s have been voiced by schoolteachers for decades because pay increases were tied to seniority. Recently, however, a number of states have revamped their compensation systems to motivate people like Anne to strive for excellence in their jobs. Arizona, Florida, Iowa, and Kentucky tie teacher pay to the performance of the students in their classrooms. 35 In California, some teachers can earn performance bonuses as high as $25,000 per year. 36

A number of organizations—business firms as well as school districts and other government agencies—are moving away from paying solely on credentials or length of service. Piece-rate plans, merit-based pay, bonuses, profit sharing, gainsharing, and employee stock ownership plans are all a form of a variable-pay program , which bases a portion of an employee’s pay on some individual and/or organizational measure of performance. Earnings, therefore, fluctuate up and down.

Variable-pay plans, when properly designed and administered, do appear to enhance employee motivation.

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