15.660 Strategic Human Resource ManagementTwo ways of managingNUMMINUMMI Compared with Other Auto Plants (1986)Training in World Auto PlantsFrom the NUMMI Team HandbookNUMMI’s Core ValuesMini-LectureEffective Use of Team-Based SystemsWhat is a Team?Working Groups Versus TeamsCommon Team ResponsibilitiesCosts/Benefits of Using TeamsWhat is the role of the leader in a team-based system?What Effective Team Leaders DoTeam DevelopmentWhat types of skills and training are required for a team-based system?Training for Team EffectivenessEvidence on Team EffectivenessLessons Learned:Implementing Team-based SystemsSome Lessons Learned the Hard WayTakeawaysAnother ExampleSituating SaturnSaturn’s EvolutionLectureAdopting High Performance Work SystemsHIGH PERFORMANCE WORK SYSTEMS 1997PERSISTENCE OF WORK SYSTEMSGAINS FROM TRADITIONAL ORGANIZATIONPOTENTIAL SOURCE OF GAINSBARRIERSQUESTIONS TO ASK IN MAKING CHOICEKey Measurement IssuesIssues in Assessing PerformanceAUTO STUDY METHODOLOGYAUTO STUDY METHODOLOGYGAINS FROM NUMMICORRELATIONS OF PRODUCTIVITY AND QUALITY:AUTOSPRODUCTIVITY AND QUALITY: AUTOSWORK ORGANIZATION AND PRODUCTIVITY IN STEEL : IWORK ORGANIZATION AND PRODUCTIVITY IN STEEL:IIWORK ORGANIZATION AND PRODUCTIVITY IN STEEL:IIIWORK ORGANIZATION OF CUSTOMER SERVICE REPRESENTATIVES IN TELLECOMMUUNICATIONSRESULTS FOR CSR’SConclusion15.660 Strategic Human Resource ManagementMIT Sloan School of ManagementTwo ways of managingTraditional? Narrow job definitions? Hire/Fire? Adversarial atmosphere? Managers think, employees execute? No employee role in governanceHigh Performance? Flexible jobs? Teams? Joint Problem Solving? Employee participation in decision-making? High levels of trainingNUMMICase DiscussionNUMMI• 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 $80billion on automation to improve the quality andproductivity of their manufacturing plants.• In 1998, a 58-day strike at G.M. idled 200,000workers and cost the company an estimated$2.5 billion.NUMMI Compared with Other Auto Plants (1986)Source: John Krafcik, “Triumph of the Lean Production System”, Sloan Management Review, 1988, Volume 3, pp. 144-52.7.3116.534.2GM, Massachusetts100.0137.433.7GM, Michigan79.663.015.6Toyota, Japan62.869.019.0NUMMI, California89.270.024.5Nissan, Tennessee77.072.019.2Honda, OhioAutomation Level(0=none)Quality(Defects/100 UnitsProductivity(Hours/Unit)PlantToyota’s Commitment to Learning“All the organizations we studied that aremanaged according to the Toyota ProductionSystem share an overarching belief thatpeople are the most significant corporateassets and that investments in theirknowledge and skills are necessary tobuild competitiveness.”Steven Spear & Kent BowenHarvard Business ReviewSeptember-October, 1999Training in World Auto PlantsOwnership/ Location Training Hours: First 6 Months for New Workers Training Hours per Year: Workers with >1 Year Experience Japanese/Japan 364 76 Japanese/North America 225 52 U. S./North America 42 31 U. S./Europe 43 34 European/Europe 178 52 Newly Industrialized Countries 260 46 Australia 40 15 SOURCE: MacDuffie and Kochan, Industrial Relations, 1995, p. 156From the NUMMI Team HandbookOur 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 environmentNUMMI’s Core Values• Customer Satisfaction (quality and cost)• Dignity• Trust• Teamwork• Consistency• Frugality• Continuous Improvement• Simplicity• HarmonyMini-LectureTeamsEffective 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 team is a small number of peoplewith complementary skills who arecommitted to a common purpose,performance goals, and approachfor which they hold themselvesmutually accountable.A team is a small number of peoplewith complementary skills who arecommitted to a common purpose,performance goals, and approachfor which they hold themselvesmutually accountable.John Katzenbach and Douglas Smith, McKinsey & CompanyThe Wisdom of TeamsHarvard Business School Press, 1993Working Groups Versus TeamsWORKING GROUP? 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 delegatesTEAM? 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 togetherCommon Team Responsibilities? Quality improvement 100%? Cross-training 85%? Scheduling (Production) 80%? Safety 70%? Process improvement 70%? Measurement/goal-setting 75%? Budget/expense control 50%? Selection 55%? Coordination with others 50%? Customers and suppliers 60%? Performance appraisal 50%Manz and Sims (1993)Costs/Benefits of Using TeamsBenefits? Bring together complementary skills and experiences? Provides for flexibility? Social benefits: fun, commitment? Less resistant to changeCosts? Coordination costs? Personal discomfort and conflict? Diffusion of responsibility (free-riders and social loafing)? Risk seekingWhat 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 managementWhat 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 workTeam DevelopmentSSSSStart - upStart - up= SupervisorSMatureExperiencedTransitionalC. Manz & H. SimsBusiness Without BossesJohn Wiley, 1993What types of