Job Design

1. Introduction

 We’ve considered recruiting & training for XP

Consulting. We just discussed decision making, a key
part of job design. Now let’s think about other important
issues in job design
– we’ll 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)
Skills 0.251 0.540 0.209 1  Attributes of a random
Discretion 0.190 0.610 0.200 1 sample of all jobs in the US
Multitasking 0.194 0.603 0.203 1 economy
Interdependence 0.185 0.619 0.196 1

Actual  Note tendency for job design

Predicted Actual to be “coherent”
Predicted
– jobs designed similarly in the
LLLL 0.0017 0.0534 31.2 same firm; even more so in
MMMM 0.1230 0.2469 2.0 the same establishment
Combinations HHHH 0.0017 0.0617 37.1
of Job Design – jobs designed similarly in the
Characteristics 1L, 3H 0.0068 0.0007 0.1 same occupation or industry
2L, 2H 0.0102 < 0.001 > 0.1
3L, 1H 0.0068 0.0007 0.1

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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
– white collar work Effects of Org. Change
– R&D % of Employees With
More Less
 With “Modern” design, more emphasis on Tasks 63% 6%
– teams Responsibility 46% 3%
Required skills 50% 4%
– careful recruitment, job rotation, cross training
– pay for knowledge, team incentives

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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

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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 Psychological Work

characteristics states outcomes

Skill Variety
Task Identity Meaningfulness
of work Intrinsic
Task Significance motivation

Responsibility
Autonomy for outcomes Quality
of work
Low
Knowledge of absenteeism
Feedback actual results & turnover
of work

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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

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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 we’ve
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 you’ve 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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