15 660 Strategic Human Resource Management MIT Sloan School of Management Two ways of managing Traditional Narrow job definitions Hire Fire Adversarial atmosphere Managers think employees execute No employee role in governance High Performance Flexible jobs Teams Joint Problem Solving Employee participation in decision making High levels of training NUMMI Case Discussion NUMMI NUMMI produces an average of 87 cars worker vs approximately 50 for Saturn and Buick City General Motors most productive plants Since 1983 General Motors has spent over 80 billion on automation to improve the quality and productivity of their manufacturing plants In 1998 a 58 day strike at G M idled 200 000 workers and cost the company an estimated 2 5 billion NUMMI Compared with Other Auto Plants 1986 Plant Productivity Hours Unit Quality Automation Level Defects 100 Units 0 none Honda Ohio 19 2 72 0 77 0 Nissan Tennessee 24 5 70 0 89 2 NUMMI California 19 0 69 0 62 8 Toyota Japan 15 6 63 0 79 6 GM Michigan 33 7 137 4 100 0 GM Massachusetts 34 2 116 5 7 3 Source John Krafcik Triumph of the Lean Production System Sloan Management Review 1988 Volume 3 pp 144 52 Toyota s Commitment to Learning All the organizations we studied that are managed according to the Toyota Production System share an overarching belief that people are the most significant corporate assets and that investments in their knowledge and skills are necessary to build competitiveness Steven Spear Kent Bowen Harvard Business Review September October 1999 Training in World Auto Plants Ownership Location Training Hours Training Hours per Year First 6 Months for Workers with 1 Year New Workers Experience Japanese Japan 364 76 Japanese North America U S North America U S Europe 225 52 42 31 43 34 European Europe 178 52 Newly Industrialized Countries Australia 260 46 40 15 SOURCE MacDuffie and Kochan Industrial Relations 1995 p 156 From the NUMMI Team Handbook Our HR philosophy guides us in the development of our full human potential to enable us to build the highest quality automobiles at the lowest possible cost by Recognizing our worth and dignity Developing our individual performance Developing our team performance Improving our work environment NUMMI s Core Values Customer Satisfaction quality and cost Dignity Trust Teamwork Consistency Frugality Continuous Improvement Simplicity Harmony Mini Lecture Teams Effective Use of Team Based Systems What is a team based system Costs and benefits of using teams What is the leader s role in a team based organization What skills are needed for teams to function effectively How can you introduce a team based system Overall lessons learned What is a Team A A team team is is aa small small number number of of people people with with complementary complementary skills skills who who are are committed committed to to aa common common purpose purpose performance performance goals goals and and approach approach for for which which they they hold hold themselves themselves mutually mutually accountable accountable John Katzenbach and Douglas Smith McKinsey Company The Wisdom of Teams Harvard Business School Press 1993 Working Groups Versus Teams WORKING GROUP TEAM Strong clearly focused leader Individual accountability Group s purpose is same as the organization s Individual work products Runs efficient meetings Measures performance in terms of larger firm Discusses decides and delegates Shared leadership roles Individual and mutual accountability Specific purpose for which the team is responsible Collective work products Open ended meetings for problem solving Performance measured on team products Discuss decide and work together Common Team Responsibilities Quality improvement Cross training Scheduling Production Safety Process improvement Measurement goal setting Budget expense control Selection Coordination with others Customers and suppliers Performance appraisal 100 85 80 70 70 75 50 55 50 60 50 Manz and Sims 1993 Costs Benefits of Using Teams Benefits Bring together complementary skills and experiences Provides for flexibility Social benefits fun commitment Less resistant to change Costs Coordination costs Personal discomfort and conflict Diffusion of responsibility freeriders and social loafing Risk seeking What is the role of the leader in a team based system Ask questions Get the group to solve problems Promote real participation Help resolve conflict Train others Positive reinforcement Encourage high performance goals Encourage self evaluation Tell the truth even when it s disagreeable Liaison with higher management What Effective Team Leaders Do Keep purpose goals and approach relevant and meaningful Build commitment and confidence Manage the level and mix of skills Manage relationships with outsiders Create opportunities for others Do real work Team Development S S S Supervisor S Mature Experienced S Transitional Start Start up up C Manz H Sims Business Without Bosses John Wiley 1993 What types of skills and training are required for a team based system Training for Team Effectiveness Meeting skills time management Conflict management Problem solving TQM Group dynamics team building Change management Coaching and feedback Business knowledge e g customer service Technical skills Evidence on Team Effectiveness Cost savings labor materials Productivity Quality Customer service Speed and cycle time Innovation Safety Decreased absenteeism and turnover Decreased worker s compensation claims Pros Pros and and Cons Cons of of aa Team Based Team Based Approach Approach Pros Cons Lessons Learned Implementing Team based Systems High Performance Team Real Team Impact Working Group Potential Team PsuedoTeam Team Performance Some Lessons Learned the Hard Way Organizations often expect too much too soon Things often get worse before they get better Managers and supervisors are threatened A new perspective on leadership is required Need to begin with a clear philosophy and purpose Technical people often see themselves as losers Implementation needs careful planning Employees need technical and behavioral skills Greenfield sites are easier than retrofits Continuous training is essential Stability is crucial turnover is deadly May need new systems especially MIS Facilitation can help at the beginning Takeaways Teams need to be driven by a clear vision and purpose why are we using them Training and group process skills are important for groups to succeed Team based organizations need teambased systems culture and