Restrictive work rules – Impact on Productivity

Process focused systems are associated with a functional process configuration. Departments are generic, in type, with all of the operations of given typing being done within that department. For example, in a machine shop, the grinding department performs all kinds of metal work involving grinding. The department has a range of grinding equipment, so it has relatively broad capability within the skill category. There are many examples of other systems where functional process configurations are employed, for example, hospitals, municipal offices, and so on.

The job designs that are associated with functionally laid out systems tend to be relatively broad, through specialized. For example, mechanisms in the grinding department can usually perform a wide variety of such work. Normally, they are trained to operate several machines because this breadth offers flexibility. Similarly, an X-ray department in hospital in a hospital does abroad a broad range of X-ray work. The variety of work in both situations stems both from the more general nature of the operations in the departments and from the fact that each job order received may be slightly different such functional systems require employees who can perform within a skill category. Hey are specialized, but their skills are more closely related to craft specialties There is repetition in the work in the sense that an experienced X-ray technician has probably taken all the common types of X-rays previously, but there is a continuing flow of job orders that lends variety to the work.

Product focused systems are associated with line-types operations, where the flow is organized entirely around the product being produced. Each operations being performed must fit into the flow in highly integrated manner. The operations are highly repetitive. Each employee performs just a few elements of the work that, in themselves, may seem unrelated because of the ‘balance” among operations required to obtain smooth flow. The balance among operations is critical to making the system function as an efficient, high-output system. The higher the output requirements and the more work stations along the line, the greater the likelihood the system will be balanced with a short, repetitive cycle that restricts the content of each individual job.

An important reality in job design practice results from contractual agreements between management and labor concerning work rules. These rules are of every conceivable type, including feather bedding (the practice of padding labor requirements) restrictions concerning the scope of jobs (particularly craft jobs), hours of work, seniority in filling vacancies, ‘bumping’ during layoffs, bases for wages, restrictions on incentive pay standards, and so on. One of the manifestations of restriction on incentive pay standards and so on. One of the manifestations of restrictive work rules is a large number of job classifications, with workers in each classification restricted to doing the work described. Thus, for example, a mechanic could not do any electrical work. If an electrical problem arises, the mechanic must stop work at that point and wait for someone with the correct job classification to do the electrical work. All these restrictive practices are widespread, though their extensiveness is difficult to document.

Effects of Work-Rule Changes:

The effects of restrictive work rules are to limit flexibility and reduce productivity. Loss of jobs to foreign competition and the 1981-1983 recessions put heavy pressure on labor unions to agree to work-rule changes. These changes were mainly in job assignments cutting crew sizes, enlarging jobs, adding duties, and eliminating unneeded jobs but they also included hours of work, seniority rules, wages, incentive pay that reflects changed job conditions, allowing team members to rotate, and allowing management to change crew structures as technology changes. The industries affected were in virtually all segments, including airlines, autos, construction, meat packing, petroleum, railroads, rubber, steel and trucking.

The effects of these work-rule changes were very substantial in improving productivity. In the rubber industry, the changes increased productivity by 10 percent, and hourly output per worker in oil refining increased 10 to15 percent. At Jones & Laughlin Steel, labor-hours ton of steel were reduced from 6 to 3.5.

Most of the work rule changes simply make operations more efficient by combination duties, eliminating featherbedded jobs, allowing more flexibility in work assignments, and so on. But some of the work rule changes the system in more fundamental ways, such as the reduction of job classifications from 200 to fewer than 100 at TRW’s Cleveland plant, resulting in fundamentally more flexibility in task assignments. The most dramatic shifts foretell revolutionary changes in the organization of work in US industry, experimenting with team organization and completely relaxed work rules within units. GM’s Saturn Project labor contract has features that old promise for future work structures.