During the 60's through to the late 70's, a proliferation of Work Measurement existed in the UK; this was due in the main to Government Policy through the National Board for Prices and Incomes setting wages conditions for manual workers in Local Authorities - these conditions included offering bonus schemes based on Work Measurement.
Over time a number of significant Work Measurement Contractors devised schemes to meet such requirements; often though the employing Authorities staffed their main need for expertise in directly employed posts, mainly due to the fact that the Ministry of Housing & Local Government, and later The Regional Provincial Councils, operated a Code of Guiding Principles with stringent labour cost control mechanisms.
Following Local Government Re-Organisation in 1974 - most Local Authorities embarked on a Value For Money programme emanating from the Treasury and Audit functions of the Council - subsequently Compulsory Competitive Tendering emerged as a prescriptive mechanism for running Local Authority Direct Works.
The resume of items set out in the following papers shows some of these pre-cursor mechanisms operating in these earlier times.
Illustration: The Principle of 'Controls'
Three vital things are required to ensure that management are in effective control:
Whatever technique is used to construct an allowed time, it is important that a detailed record be made of the method, tools and equipment used and of every feature of the operation which could possibly have a bearing on the time. This is necessary at all times because changes in the work content of an operation affecting the time will also affect planning and costing; it is doubly important where the time standard is to be used in setting rates of pay under an incentive scheme. It is a cardinal principle of all sound incentive schemes based on work measurement that the time allowed should not be changed except when the work content of a job is changed, when there is a change in the organisation of the work or to correct a clerical error. The Job Specification represents the basic data on which this contract between employer and employee rests.
The amount of detail necessary in a job specification will vary greatly depending on the nature of the operation concerned. In machine-shop work in the engineering industry, where a large number of different jobs are done on machines where the methods of operation are broadly similar, general conditions governing all jobs can be established for the whole shop and only variations in detail need be specifically recorded.
On the other hand, where an operation involves a whole shop or department and will run for an indefinite period substantially unchanged, the job description may be lengthy and detailed.
Generally speaking the, the following points should be covered by a job specification, which should, of necessity, embrace the standard method laid down as a result of the relevant Method Study:
To the job specification should be attached all the data on which it is based including method studies, time study sheets, analysis sheets, rest allowance sheets and the work measurement summary.
It may be necessary to supply copies of the job specification to the management and to the departmental and shop supervision, and, in the case of specifications affecting a large number of employees, to the workers' representatives.
The manner in which the time standards are made known to the operatives depends largely on the nature of the work. If the job is done by a single worker (the one who was measured) it is usually enough for the operative to be told personally.
NB - students researching such practices might choose to research any 'mutuality clauses' in National Agreements where the Trades Unions (history shows the Amalgamated Engineering Federation, in particular) argue that every worker subject to work measurement should have the right to reach agreement personally with the employer, irrespective of former work measurement results and agreements with previous operatives doing the same job - the principle of 'standard times' as a universal practice is therefore questioned.
Allowed times are generally set down in the following forms:
They are sometimes calculated or translated into hours. These time values represent the output at normal performance (100% BSI).
The various uses to which time standards may be put demand information in differing forms. For planning programmes of work, machine and shop loading and giving estimates of delivery dates it is actual rate of output to be expected which is of interest, that is, the standard performance values.
For estimating, costing the payment of incentive bonuses, labour-cost control and indices of performance the time standards at normal performance (that is, the allowed times) are required.
The minutes or hours allowed for any given job are not minutes or hours of continuous work - each unit of time contains within it an element of rest. The proportion of rest to work within the minute varies in the same proportions as the rest and other allowances to the normal time within the allowed time. Adding 'work' to 'rest' must always give a total of one minute or, in certain systems, one hour.
These composite minutes are known by various names, the most common being standard minute or work unit. The term used depends upon whether the time standard is called the allowed time or the 'work value', which means the same thing, but which derives from a slightly different approach. Standard minutes are also known as 'points'. If the hour is the basic unit, this is called a 'standard hour'.
The standard minute is the unit of measurement of output of work.
It represents the output of work in one minute of the allowed time for any given operation.
The proportions of rest and work will vary according to the heaviness or complexity of the work. In extremely heavy, hot work such as furnace tending the proportion of rest may be 50% or more.
Since the standard minute is a measure of output it can be used in measuring and comparing productivity, which may be represented by the ratio:
A particular advantage of the standard minute is that it can be used to measure and compare outputs in dissimilar types of work, the accuracy of the comparison being limited by the consistency of the time standards.
One of the causes of ineffective time due to management shortcomings is 'failing to plan' the flow of work and of orders, with the result that one order does not immediately follow on another and plant and labour are not continuously deployed.
In order to plan a programme of work effectively, it is necessary to know precisely:
The information on items 1 & 2 is generally supplied by the sales office or commercial department - the information for items 3, 4 & 5 is supplied by process planning and method study - the information on item 6 is supplied by work measurement - the information on item 7 is supplied from plant department records or those of the department concerned - the information on item 8 is supplied from personnel office records or those of the department concerned.
Once this information is available it becomes a matter of simple arithmetic to match the requirements with the available capacity - Capacity Planning. Both the requirements and the capacity available to fulfil them must be stated in terms of time.
Requirements will be stated as:
This must be matched against the total time available on each type of plant and with each type of labour necessary to perform the operations.
In planning a programme only the actual times which the operations may be expected to take are of interest. These will depend, among other things, on whether the general conditions in the plant - including the state of management - labour relations and the system of remuneration in use - are such that the employees are working at an optimum rate. Where this is the case these times should be those of the average performance of the shop or department as given by the production records over a period. This may even apply to an individual machine or process. It is the only realistic basis for such calculations.
The matching up of production or operational requirements against capacity in this way makes it possible to:
If management can have such information, compiled from realistic standards of performance, available well before production is due to start, it can take steps to prevent hold-ups from occurring. Alternatively it can start looking for work to fill spare capacity. Without such standards it has no sure basis for doing either of those things.
The success or failure of an enterprise in a competitive market may depend on the accuracy with which it is able to price its products. Unless the manufacturing time of the product is accurately known the labour cost cannot be estimated, and many indirect costs dependent on time, such as plant depreciation, fuel and power consumption, rent, and the salaries of staff and supervision cannot be accurately determined.
If the management can rely on the accuracy of the costing, economic prices can be fixed. If these are below those of the competition, the management can be happy in the knowledge that it is underselling competitors in safety; if they are above, the cutting of costs can be undertaken with more assurance than would otherwise be the case and with a knowledge of the margins available to be cut.
The labour times used for estimating are allowed times, since these are the basis on which the employees are paid. Indirect costs dependent on actual times taken will, of necessity, be based on estimates of those times.
Work Measurement provides the basic information for setting standards of labour costs and the means of controlling them. These standards can also be used as the basis of the labour budgets for Budgetary Control; they provide certain of the information necessary for the production and indirect expense budgets and, related to the sales budget, indicate the plant and labour capacity likely to be available over the period of the budget.
Besides providing the standards, work measurement also provides, accurately, the actual performance figures. The need for such accurate standards cannot be overstressed. The absence of complete cost information is at the root of much poor management and of many failures of industrial concerns. Labour costs will, as usual, be based on allowed times.
Direct incentive schemes based on output do not necessarily follow on an application of work measurement - there are many enterprises where work measurement is in place but direct incentives are not employed. One of the reasons why a good deal of attention is paid to work measurement is that its application is often the fore-runner of the introduction of an incentive scheme.
This however, is not the place to explore the merits of direct incentive schemes or to describe the various types of scheme suitable for differing circumstances.
The merit of work measurement as a basis for incentive schemes lies in several features inherent in the technique, namely;
It is important for the success of any incentive scheme that the employees should know as quickly as possible the remuneration they have earned.
The value of this practice to an incentive scheme is as follows;
A full application of work measurement, when associated with an incentive scheme, has to be backed by a system of recording operatives' times and output of work. These times and output figures must then be assembled at a central point - usually the accounts department - where they can be put into forms suitable for use in compiling remuneration rates and performance of individuals or departments. These forms are known as CONTROLS - they provide the management with compact and easily understandable statistics for the control of factory performance and costs. Devising a system suitable for use in the organisation would be dependent on the sector the enterprise competes in, but safe to say, the general characteristics would be as follows - it should:
Working out a system to fulfil all these requirements for any but the smallest works engaged on the simplest type of manufacturing is not easy and the variety of systems for different applications is such that any set of examples given here would run the risk of being too complicated for some enterprises and insufficient for others. The text following will therefore be confined to some general notes on the basic data and its probable source.
In any system of recording associated with work measurement and an incentive scheme, the following minimum data must be recorded and eventually transmitted to the wages and cost offices:
It should be noted that the application of work measurement will almost certainly entail an increase in clerical staff - the idea of this concerns many managers who fear increases in their overhead expenses, forgetting that the increased cost is likely to be very small compared with the savings which the techniques of work study can make in their total costs of production or operation.
The information necessary to operate the incentive scheme can be used to provide the management with weekly control figures from which they can observe the performance of each department. This is generally done on what is known as a 'weekly analysis sheet' for the department, on which the information is presented in a very compact form.
The design of these sheets varies according to the needs of the organisation, but the usual form is divided into two parts. In the first part the labour utilisation and effectiveness is expressed in terms of time and in the second the figures are translated into costs. In addition to the output (in standard hours) and the clock hours worked, from which the productivity of the department may be calculated, waiting time and additional allowances are analysed by causes so that the manager can at once question and take action on any cause of excessively high waiting time, and can see the cost of same.
Sheets are usually designed for a thirteen week period and typically would identify pay and effective performance, Labour Cost and Deviation variances - all shown in an indices form. This enables comparisons to be made week on week with the anticipated results set out in the formal documentation of the scheme. Such comparisons would be the pre-cursor to identifying any remedial / congratulatory actions that the management might wish to set in train.