JOB DESIGN

Humor Without Malice

1. Friend: "Nasiruddin, how does one become wise?" Nasiruddin: "Listen attentively to wise
people when they speak. And when someone is listening to you, listen attentively to what
you are saying!"

2. I finally realized that people are prisoners of their phones. That's why they are called 'Cell
Phones'!!
Quotable quotes
Yesterday is history. Tomorrow is a mystery. And today? Today is a gift. That's why we call it
the present. – Babatunde Olatunji
Intelligence plus character - that is the goal of the education. – Martin Luther Jr
O Allaah: YOU are Peace, YOU are the source of Peace, Blessed and Exalted are YOU our
LORD, Possessor of Majesty and Reverence. (Hadith from al-Tirmidhi and al-Nasa’i)

Job means: set of tasks, elements, motions and responsibilities of a worker. Tasks are individual
activities. Job motions mean basic physical movement.
Job Design refers to the synthesis of individual tasks or activities into a job, which is assigned to
an individual worker or a group of workers. It specifies: job’s content, employee skills and training,
degree of specialization for the job.
➢ Or, a procedure through which you determine the duties of positions in an organization and
the characteristics of the people to hire for them.
➢ A systematic way of determining which employees are expected to perform a particular
function or a set of tasks that must be accomplished duly.
➢ A purposeful, systematic process for collecting information on the important work-related
aspects of a job.
➢ A process to identify and determine in detail the particular job duties and requirements and
the relative importance of these duties for a given job. In the process judgments are made
about data collected on a job.
➢ Process through which managers plan and specify job tasks and the work arrangements that
allow them to be accomplished.
Importance of Job Design and Work Measurement
Productivity maximization:
▪ State-of-the-art technology,
 ▪ Investment in more productive equipment, and
▪ The way people do their individual jobs.
Is the work environment
▪ Danger prone and un-cleaned?
▪ Or, the repetitive operation is boring and decrease worker motivation?
▪ Morale and productivity. Need deliberate and comprehensive approach that considers work
environment, worker motivation and capabilities, and work itself. Job design considers all
those issues.
Benefits of successful job design
• scientific analyses and improved working efficiency
• balanced work load and reduced idle time
• determining equitable payment structure and workers’ satisfaction
Job analysis is a systematic exploration of the activities within a job.
➢ This analysis involves compiling a detailed description of tasks, determining the
relationships of the job-to-technology (compatibility) and to other jobs and examining the
knowledge, qualifications or employment standards, accountabilities and other incumbent
requirements.
➢ The job analysis indicates what activities and accountabilities the job entails; it is an accurate
recording of the activities involved.
➢ It involves studying jobs to determine what tasks and responsibilities they include, their
relationships to other jobs, and the conditions under which work is performed, tools and
equipment used, and the personal capabilities required for satisfactory performance.
Outcome of Job analysis
It produces information for writing job descriptions (a list of what the job entails and job
specification (what kind of people to hire for that job)
➢ Job description – the principal product of a job analyses. It represents a written summary of
the job as an identifiable organizational unit.
➢ Job specification – a written explanation of the knowledge, skills, abilities, traits and other
characteristics (KSAOs) necessary for effective performance on a given job.
Scientific management in job design
➢ Sought to improve work efficiency by creating small, repetitive tasks and training workers
to do these tasks well.
When should a Job analysis be carried out:
1. When an organization is started.
2. When changes occur, which require new methods and procedures in performing the job e.g.
introduction of new technology
3. When a new job is created.

Purpose of job analysis

1. Determining qualifications required of jobholders
2. Providing guidance in recruitment and selection:
• Job analysis information helps recruiters seeking and finding the right person for the
organization.
• And to hire the right person, the selection test must access the most critical skills and
abilities needed to perform a job. This information comes from a job analysis.
3. Evaluating current employees for transfer or promotion.
4. Provide a basis for determining training
•Knowing the skills necessary for jobs is essential to building effective training
programs.
• Moreover, helping people to move efficiently from one career stage to another can only
be accomplished with information from job analysis.
4. Providing clues for work methods simplification and improvement
5. Setting compensation and maintaining fairness in wage and salary administration:
• Compensation is usually tied to the duties and responsibilities of a job.
• Proper compensation demands accurate assessment of what various jobs entails.
• Judging the merits of grievances that question assignments and compensation.

6. Establishing responsibility, accountability, and authority.

7. Providing essential guidance for performance management - in the establishment of
standards of performance and hence performance appraisal.
8. Strategic planning
• Effective job analysis can help organizations to change, eliminate or otherwise
restructure work or work flow process to meet the changing demands of uncertain
environments.
In conclusion, it should be noted that job analysis covers the entire domain of HRM as it would be
difficult to be effective in hiring, training, appraising, compensation or utilize HR without the
information derived from job analysis.
Types of information collected for job analysis
Work activities - such as cleaning, selling, teaching etc.
• The what? How? Why? When? Of the tasks
 • Human behavior
• Sensing, communicating, deciding, and writing
• Job demands such as lifting weights or walking long distances
• Machine, tools, equipment and work aids. This category includes information regarding
tools used, material processed, knowledge dealt with or applied and services rendered
• Performance standards - in terms of quantity and quality levels of each job duty
• Job context - such matters as physical working conditions, work schedule, and the
organizational and social working context – for example the number of people with whom
the employee would normally interact
• Human requirements – included information such as job-related knowledge or skills
(education, training, work experience) and required personal attributes (aptitude/talent,
physical characteristics, personality, interest)

Steps in Job Analysis

1. Examine the total organization and the fit of each job
• Provides a broad view of how each job fits into the total fabric of the organization
• Organizational chart and process chart are used to complete this step
2. Determine how the job analysis information will be used
• Encourages those involved to determine how the job analysis and design information will
be used – job description, recruitment, training etc.
3. Select jobs to be analyzed. These would be representative job positions especially if there are
too many jobs to be analyzed.
4. Collect data by using acceptable job analysis techniques
• The techniques are used to collect data on the characteristics of the job, the required
behaviors and the characteristic an employee needs to perform the job
• Step 5: prepare job descriptions
• Step 6: prepare job specification
• Step 7: Use the information in step 1 – 6, purpose it was meant to - recruitment, selection
and training, performance evaluation, compensation and benefits etc.

Methods of data collection

There are four basic methods of data collection which can be used separately or a combination:
• Observation
• Interview
• Questionnaire
• Job incumbent diaries or logs
Observation
• Direct observation is used for jobs that require manual, standards, and shot-job cycle
activities e.g. job of an assembly line work, a filing clerk,
• The job analysis observes a representative sample of individuals performing the jobs.
Limitation of observations
• Observation method is not appropriate where the job involves significant mental activity
such as work of a research scientist, lawyer, teacher, etc.
• The observation method requires that the job analyst be trained to observe relevant job
behaviors
• He/she must also keep out of the way so that work must be performed
Interview
• Can be conducted with a single job incumbent, or with group of individuals or with a
supervisor who is knowledgeable about the job
• Involves face to face talk with the job incumbents
• Must be structured in such a way that answers from different individuals can be compared.
Advantages of interview
• Its relatively simple and quick way of collecting information including information that
might never appear in written form
• A skilled interviewer can unearth important activities that occur only occasionally, or
informal contacts that wouldn’t be obvious from the organizational chart
• The interview also provides an opportunity to explain the need for and functions of the job
• The employee might also vent frustration that might otherwise go unnoticed by
management.
Limitations
• However, it should be noted that interview guides are difficult to standardize – different
interviewers may ask different questions and the same interviewer might unintentionally
ask different questions to different respondents.
• There is also possibility that the information provided by the respondents will be
unintentionally distorted by the interviewer.
• Finally, the cost of interviewing can be very high.
Questionnaire method
• This is usually the least costly method of collecting data or information.
• It is an effective way to collect a large amount of information in a short period of time.
• The questionnaire includes:
o Specific questions about the job
o Job requirements
 o Working conditions
o Equipment
• A less structures, more open-ended approach would be asked to job incumbents to describe
their jobs in their work terms
• This open-ended format would permit job incumbent to use their own words and ideas to
describe the job.
Job incumbent diary or log
• The diary or log is a record by job incumbent of job duties. It includes:
o Frequency of the duties
o When the duties were accomplished
• This technique requires the job incumbent to keep a diary or log
• Unfortunately, most individuals are not disciplined enough to keep such a log a diary.
• If a diary is kept up to date, it can provide good information about a job
• Comparison on a daily, weekly or monthly basis can be made
• This permits an examination of the routineness or nonroutininess of the job duties
• A daily log is useful when attempting to analyze jobs that are difficult to observe such as
those performed by engineers, senior executives, and others.
Which method is to use
• Any one or a combination - a multimethod job analysis approach
• It is recommended to apply a combination because each of the methods has its strengths
and shortcomings and can elicit more of some specific information
• The choice of method may also be determined by circumstances such as the purpose of
the job analysis, and time and budgetary constraints
Job description
• A job description, is a written description of what the job entails
• Written statement of what the worker actually does, how he does or she does it, and what
the working conditions are
• job description clarifies work functions and reporting relationships, helping employees
understand their jobs.
• Job descriptions aid in maintaining a consistent salary structure.
• Performance evaluations may be based on job descriptions
Job description is important for –
1. Clarifies employer expectations for employee
2. Provides basis of measuring job performance
3. Provides clear description of role for job candidates
4. Provides a structure for company to understand and structure of all jobs and ensure the
necessary activities, duties and responsibilities covered by one job or another
5. Provides continuity of role parameters irrespective of manager interpretation
 6. Enables pay and grading systems to be structured fairly and logically
7. Prevents arbitrary interpretation of role content and limit by employee and employer and
manager
8. Essential reference tool in issues of employee/employer dispute
9. Essential reference tool for disciplinary issues
10. Provides important reference points for training and development areas
11. Provides neutral and objective (as opposed to subjective or arbitrary) reference points for
appraisals, performance reviews and counselling
12. Enables formulation of skill set and behavior set requirements per role
13. Enables organization to structure and manage roles in a uniform way, thus increasing
efficiency and effectiveness of recruitment, training and development, organizational
structure, work flow and activities, customer service, etc.
14. Enables factual view (as opposed to instinctual) to be taken by employees and managers in
career progression and succession planning.

Information contained in a Job Description

• Job title/job identification
• Job summary
• Relationships
• Responsibilities and duties
• Standards of performance
• Environmental conditions
Job Identification
Job title/job identification -Includes:
• Job title
• location of the job in terms of department, division or section.
• May also include immediate supervisor’s title
• Information regarding salary and /or pay scale
• grade/level of the job
Job Summary
• Brief one or two sentence statements describing the purpose of the job and what outputs
are expected from the incumbents
• Describes general nature of the job and includes only the major functions of the job or
activities e.g. the marketing managers job is to plan, direct and coordinate the marketing
Responsibilities and duties
• List each of the job major responsibilities separately, and describes it in a few sentences
• Responsibilities and duties, includes:
 o description of the job duties, responsibilities, and behavior performed on the job.
o Describe the social interaction associated with the work (for example, size of the
work group, amount of dependence in the work)
o This section should also define the limits of the job holder’s authority, including
his or her decision-making authority, direct supervision of other personnel and
budgetary limits.
• Includes general statements like “perform other assignments as required” purpose is to
give supervisor more flexibility in assigning duties.
• List the standard the employee is expected to achieve under each of the job descriptions
main duties and responsibilities, accurately post accounts payables, meet daily
production targets and so on.
Environmental condition
• Environment/conditions – description of the working conditions of the job, the location of
an environment such as hazards and noise levels.
Job specification Job Description (JD):
• This evolves from the JD
• It is a statement of employee’s characteristics and qualification required for satisfactory
performance of defined duties and tasks comprising a specific job or function.
• It addresses the question “what personal traits and experience are needed to perform the
job effectively”
• the JS is specifically useful in offering guidance for recruitment and selection e.g. the job
for HR manager would require a university degree, six year of experience in HRM.
Components of Job specification:
• Personal characteristics such as education, job experience, age, sex, and extra co-
curricular activities.
• Physical characteristics such as height, weight, chest, vision, hearing, health, voice
poise, and hand and foot coordination, (for specific positions only).
• Mental characteristics such as general intelligence, memory, judgment, foresight,
ability to concentrate, etc.
• Social and psychological characteristics such as emotional ability, flexibility, manners,
drive, conversational ability, interpersonal ability, attitude, values, creativity, etc.
Various contents of a job specification can be prescribed in three terms:
• Essential qualities which a person must possess;
• Desirable qualities which a person may possess; and
• Contra-indicators which are likely to become a handicap to successful job performance.
Management approaches are:
Job simplification
➢ A scientific management approach that standardizes work procedures and employs people
in clearly defined and highly specialized tasks.
➢ Intent is to increase efficiency, but it may be decreased due to the motivational impact of
unappealing jobs.
Job enlargement
➢ Variety in one job, increasing the complexity of the job with different tasks. That is, thin-
job to thick-job. To eliminate the undesirable characteristics of highly repetitive, by
enlarging it to include (Frederick Herzberg):
▪ Greater variety of knowledge and skill
▪ Giving a person a complete natural unit of work (module, division, area, etc.)
▪ More complex utilization of important cognitive and motor abilities
▪ More freedom and responsibility
➢ Increases task variety by combining into one job two or more tasks that were previously
assigned to separate workers.
Job rotation
➢ Assignment of workers to different jobs. “Thin-jobs” case and different jobs in diff. days
of a week. Capability upholding.
➢ Increases task variety by periodically shifting workers among jobs involving different
tasks.
Job enrichment (vertical)
➢ Team approach, increasing the responsibility, removing unneeded management control
(trust him/her/them), granting sufficient authority and freedom to carry out the
responsibility, increasing the flow of information on all relevant issues, and assigning
specialized tasks. “Empowerment of personnel”.
Commonly applied principles are:
▪ Variety in job contents (ensure)
▪ Opportunity for worker to grow and learn
▪ Let feel that his/her job plays in the total manufacturing process
▪ Make it meaningful and pride possessing to the worker
▪ Work is reasonably demanding and functionally inclusive. Self-directive and quality
bound work.
➢ The practice of enhancing job content by building motivating factors such as
responsibility, achievement, recognition, and personal growth into the job.
Concerns about job enrichment
➢ Job enrichment can be very costly.
➢ Controversy concerning whether pay must be increased when jobs are enriched.

Job characteristics model

➢ Provides a data-based approach to creating job designs with good person-job fit that
maximize the potential for motivation and performance.
Team working and Scheduling (Job flexibility): freedom to organize themselves, set their own
line speed production rates, regulate their own coffee breaks. Greater work pride. Quality circle
(group problem solving) or JIT team spirit. Employee involvement. Scheduling of work include
Flextime (a scheduling system in which workers define their hours of work), 4/5 days’ work week,
or permanent per-time jobs.
• Worker capabilities and motivation
Monetary approach and nonmonetary approach
Monetary benefits: good basic salaries or wages, fringe benefits (health care benefits, retirement
benefits, free use of company car), discount in company’s goods, incentive pay systems (extra pay
for extra effort).
Motivation
Motivation – the process of arousing and sustaining goal-directed behavior.
Or, Any influence that triggers, directs or maintains behavior towards achievement of a goal/s.
Internal motivation: The force within us that activates our behavior. It is a function of three distinct
components, Intensity, Direction, and Persistence.

Motivation

Intensity Persistence
Direction

Motivation Theories
 Scientific Management (Frederick Taylor)
◦ Objective is to improve the productivity of the individual worker
 Develop a science for each aspect of individual’s job
◦ Find the one best way to perform a task
 Time and motion studies
 “Science of shoveling”
◦ Motivate employees through money
 Standard amount of production is set
 Going above the standard earns you more money
Two Types of Motivation: Intrinsic vs. Extrinsic
• Intrinsic - When doing the job is inherently motivating.
• Extrinsic - When rewards such as pay and formal recognition act as motivators.

Motivation Extrinsic
Intrinsic
Personal Growth Pay
Job security
Opportunities Promotion
Recognition
Sense of
Accomplishment

 Content theories
◦ explain why people have different needs at different times
i. Maslow’s Need Hierarchy
ii. Alderfer’s Existence Relatedness and Growth (ERG) Theory -
iii. Herzberg’s Theory
iv. McClelland’s Learned Needs

 Process theories
◦ describe the processes through which needs are translated into behavior

1. Frederick Taylor’s rule: higher wages for more work & training & development.
Standard work done Payment (of the basic)
90% 100%
100% 110%
110% 120%
Ex. Standard work rate: 10 units per day. Basic payment RM10/unit
Produced Money received
9 units 90
10 110
11
2. Maslow’s Need Hierarchy
Assumptions:
• Each individual has needs, or feelings of deficiency that drive their behavior. People constantly
attempt to satisfy their needs.
• Once a need is satisfied, then it is no longer motivating. People constantly attempt to satisfy
their unsatisfied needs.
• Needs are in a hierarchy that an individual moves up as they satisfy levels of needs. Only
unsatisfied needs determine behavior.

1. Physiological/Survival needs such as Food, Clothing, Shelter, and Air.

2. Security needs such as feel safe, absence of pain, threat, or illness.
3. Affiliation needs such as friendship, company, love, belonging,
• First clear step up from physical needs.
4. Esteem needs such as self-respect, achievement, recognition, prestige
• cause a person’s worth
5. Self-Actualization such as personal growth, self-fulfillment, realization of full potential.

Where are YOU on the hierarchy???

3. Herzberg theory
Satisfaction No satisfaction

Dissatisfaction No dissatisfaction

➢ Some variables prevent job dissatisfaction and some variables produce motivation
➢ Hygiene factors-basic needs that will prevent dissatisfaction
o light, temperature, pay, parking
➢ Motivators
o when present cause high levels of motivation
o interesting work, advancement, growth, etc.
Motivating factors (contributing towards motivation): work itself, work recognition, a sense of
achievement, job responsibility, growth, and advancement.
Hygiene factors (contributors to prevent job dissatisfaction): company policy and administrative
controls, work conditions, salary, superior-subordinate relationship.
Process Theories:
➢ Reinforcement Theory
➢ Expectancy
➢ Equity
➢ Justice Theory
➢ Goal Setting
Justice Theory
• Procedural Justice - fairness issues concerning the methods, mechanisms, and
processes used to determine outcomes
• Distributive Justice - concerns the fairness of outcomes, includes equity theory
• Interactional Justice - concerns the way one is treated informally during procedures
and distributions
• Procedural justice and interactional justice can buffer inequity to some level
• Above that threshold, procedural and interactional justice do not matter
• If equity is present, then interactional and procedural do not matter
• Does order of procedural or interactional justice matter?
Common incentive pay systems are:
a. Piece rate system, commission (sales), or percentage.
b. Standard-hour wage system: minimum guaranteed base wage + piece-rate.
c. Profit sharing or gain-sharing
d. Bonus system: infrequent, temporary, or one-time reward for above std. level of work
performance.

Nonmonetary systems: more intrinsic and seek to psychologically motivate workers by appealing
to their self-esteem or sense of accomplishment: praise as a good feeling, recognition, publication
in company paper or magazine, award, “worker-of-the-week”. Job security.
Combined knowledge of anthropometry (body wt., linear dimension, volume), biomechanics
(range of body movements), and ergonomics are necessary.

4. Quality of worklife (QWL)

• Culture of the workplace
• Compensation
• Working condition
• Work itself
• opportunity

5. Human relations: Hawthorne studies

• Social & interpersonal factors have a significant effect on worker productivity
• Cohesive work group & managerial interest and attention may improve performance
6. Theory Z
McGregor Theories:
Theory X or “lazy worker” theory: people basically do not like work and must be coerced into it.
Theory Y or “contended cow” theory: people do like to work and if happy in their job, will work
ever harder.

William Ouchi’s Z theory:

• Lifetime employment for 35% of workforce
• Equal sacrifice by all (if pay cuts)
• Slow by steady promotion
• Total (within company) job rotation among all functions
• Decision making by consensus and compromise in bottom-up fashion
Value analysis
• To improve methods, ask about impact of the design of parts, mats. & equipment use,
• Concerned with function, cost and value
• That is, analyze value for methods improvement & purchasing
• Ask such questions:
i. What is it?
ii. What does it do?
iii. What does it cost?
iv. What does it worth?
v. What else will do the job?
vi. How much will it cost?

Suggestion systems
• Cost saving improvements
• Motivate workers to produce ideas
• Share some part of annual savings with them

Employees are of Blue-collar (workers) as well as white collar employees (supervisors, manager,
engineers, and others).
Workers are process midwives rather than process monitors.

Rate busters: beyond the standard or normal rate of production (exceptional cases and thus
unacceptable). Work measurement should be viewed as a means of monitoring productivity. It
provides data to assess labor costs precisely and use the information to accurately plan product
pricing, control labor requirements usage, and schedule unit production.
High

Work Horse STAR

Employee
performance

Dead Wood Problem

employee

Low Employee potential High

Sociotechnical Approach: Job design considers both the technical needs of the process and the
social needs of the workers.

Social
factors Technical
factors

Acceptable work design

Learning Curves (LC) or Improvement curves

• Change is inevitable & rapid. Learn from change: for workers, for organizations. LC
illustrates the improvement rate of workers as a job is repeated.
• Practice makes a man perfect.
• As worker continue to work, produce more items, they become better at their jobs.
• Processing time per unit decreases by a constant percentage each time output
doubles.

Organizational learning: gaining experiences with products and processes, achieving

greater efficiency through automation and other capital investments, administrative
improvement. So evaluate the existing standards and set new ones.

The Learning Effect

It is represented by a curve, called Learning Curve (LC). LC displays the relationship
between the total direct labor per unit and the cumulative quantity of a product or service
produced. It teaches the workers how to be more efficient, how to reduce unnecessary
movement & unnecessary tools and make it easy to perform a job.
Assumptions to make an LC:
• The direct labor (hr) required to produce the (n + 1)st units will always less than that
for nth units.
• Direct labor requirements will decrease at a declining rate as cumulative production
increases.
• The reduction in time will follow an exponential curve.

Equation:

tn = t1n b
where,
tn = time required for the nth unit produced
t1 = time required for the first unit produced
n = cumulative number of units produced
b = ln r/ln 2, r is the learning rate % (coefficient). Smaller value of r, greater learning and
more rapidly labor content decreases.

Processing
time per unit

Cumulative units produced

Ex. Production time for 1st unit 20 hours, end unit 16 hours, 4th unit 12.8 hours. This is
following 80% LC (1st to 2nd unit 80%, 2nd to 4th again 80%). What is the amount of time
required for 3rd unit?

t3 = t1nb = 20(3) = 14.04 person − hr

ln 0.8 / ln 2

Use of LC
• Bid preparation: calculate labor & material costs, add profit to obtain total bid.
• Financial planning: compare prices and costs, when expenditure exceeds receipts.
• Labor requirement estimation: training reqt., develop production and staffing plans.
 Learning rate
70% 80% 90%
Unit Unit Cumulative Unit time Cumulative Unit Cumulative
no. time time time time time
1 1.000 1.000 1.000 1.000 1.000 1.000
2 0.700 1.700 0.800 1.800 0.900 1.900
3 0.568 2.268 0.702 0.846
4 0.490 0.640 0.810
5 0.437 0.596 0.783
6 0.398 0.562 0.762
7 0.367 0.534 0.744
8 0.343 0.512 0.729
9 0.323 0.493 0.716
10 0.306 0.477 0.705

Procedure of using LCs and their tables

1. Select a worker for the study: familiar with tools, eqpt., and facilities layout. Physically
fit and motivated to do for at least two trials.

2. Have the worker completed the job twice? Preferably on the same day, do not modify
tasks or assignments significantly. Record job times.

3. Determine LC to use in the study: find the ratio of the second time over the first trial.
Then find the % of time reduction. Logarithmic functions smooth the improvement and
more accurately computes the learning adjustments than a geometric function.

4. Determine a unit completion number that will define when learning will take place:
find a point (limit) at which further repetition of job will not improve learning. Selection of
the number is arbitrary and it is small for thin job and large for thick job.

5. Determine the LC statistics: LC expressed in percentage. Find the value between the
intersection of unit complete time and the % of LC. The value will give the % of time that
the job took on its first trial completion to be estimated to do the job.

6. Calculate the learning adjusted time estimates: To get this we need only the first job
completion time from step 2 and multiply it by the LC statistic from step 5.
Advantages of LCs
Planning labor, budget, and scheduling requirements
Limitations
• Product modifications negate LC effect
• Not so much effective for mass production (for short, repetitive, and routine jobs).
• Improvement can derive from sources besides learning
• Industry derive LC rates may be inappropriate.

Ex. 2. Suppose labor content for the first 8 units of production is as below:
Unit no. 1 2 3 4 5 6 7 8
Person- 41 34 29 26 24 24 23 21
hr
 Determine the learning rate.
Solution:
Unit no., 2n Ratio of labor content for
n items 2n and n
1 2 34/41 =
2 4 26/34
3 6 24/29
4 8 21/26

34 / 41 + 26 / 34 + 24 / 29 + 21 / 26
Average is = = 0.8073  80%
4
So use 80% LC to predict future labor contents.

Experience Curves
Real production cost per unit depends on a number of factors, such as:
• Process improvement
• Improved equipment
• Better management and information flows, and
• Scale of economics
Experience curve or progress curve is used to describe these combined effects. This
curve looks, behaves and can be used exactly like an LC, except that it expresses the
cost per unit as a function of cumulative output.

tn = t1n b
The equation can be used and learning rate table, with t1 is the cost to
st
produce the 1 unit, tn cost to produce nth unit and r is the experience rate.

Cost
per unit

Cumulative units produced

Problems (Assignment)
1. A mobile home manufacturer has collected the following data on the labor
requirements for the first 600 mobile homes it made.
Unit no. (000) Labor content (person-hr)
1 1250
2 1070
3 1010
4 920
5 890
6 850

i. Estimate the learning rate for this product.

ii. Use the learning rate to predict the amount of labor that will be required to
make the next 300 mobile homes.
2.