Statistical research methods in business quality control and customer satisfaction

¶ … Labor Productivity: A Quantitative Analysis

In the aforeposed article Professors Randolph Thomas and Karl Raynar attempt to comprehensively examine the effects on labor productivity resultant from management's deliberate scheduling of overtime hours (Thomas & Raynar, 1997). While such tactics have been highly utilized historically with the intent of increasing productivity, the overworking of employees seems a bit counterintuitive with respect to the enhancement-related goal. This conundrum has been the cause of much controversy because of its potential for unlawfulness (exceeding the mandated 40-hour work week) and its potential for humanistic labor exploitation. In analyzing this litigious topic, Thomas and Raynar collected continuous feedback from four industrial projects for a period of 122 weeks (Thomas & Raynar, 1997). In doing so, these experts narrowed their study into a direct unit-based efficiency model (Thomas & Raynar, 1997). That is, in their selection of the industrial sector as the arena for their work, they were able to define productivity increases and decreases by the number of marginal units produced. Additionally, the Pennsylvania State University professors added a somewhat revolutionary component to their study by considering the loss of efficiency as a strict function of time (Thomas & Raynar, 1997). They also examined scheduled overtime with relation to the work environment, ultimately finding that environmental deficiencies are direct contributors to labor deficiencies. Being that Thomas and Raynar were investigating various different projects, they were able to estimate a universal conversion equation from the available company resources in order to garner analogous figures (Thomas & Raynar, 1997). This equation is stated below:

where I is equal to the item number from the respective company manual and j is equal to the manual number (Thomas & Raynar, 1997). Using this conversion factor and the baseline productivity benchmark equation (where productivity is equal to total work hours divided by total quantity produced), Thomas and Raynar were able to successfully equate statistics from multiple projects in order to obtain a more cumulative analysis (Thomas & Raynar, 1997).

In compiling their data and executing their study Thomas and Raynar examined several routine tasks completed by small crews of workers. Their respective efficiency was accumulated and depicted as a function of the length of the workweek: (Thomas & Raynar, 1997)

The proctors noted that the reduced efficiencies found in the two-day and three-day workweek were caused by bad weather (Thomas & Raynar, 1997). However, as illustrated, Thomas and Raynar did statistically find that scheduled overtime (time scheduled that would create a five-day or six-day workweek) does in fact reduce efficiency (Thomas & Raynar, 1997). The diminishment of the average number of units produced in a certain time period was certainly related to the increased work hours, though this intensification of labor came with a number of efficiency-reducing variables. Such inputs included environmental shortcomings and increases in absenteeism as a result of overworking (Thomas & Raynar, 1997). The relevant literature surrounding the disadvantages of increasing labor hours tends to support the professors' findings. In fact, experts at Cornell University's School of Industrial and Labor Relations have determined that, "standard weekday work hours, work-at-home options and reduced workweeks are all associated with reduced employee absences" (Dionne & Dostie, 2007, p. 108). Therefore, in addition to the industrial productivity declines resultant from intense schedules and subsequent exhaustion, vital team members are often absent because of the high time demands. However, increasing an employee's required work hours can have other negative consequences that may also result in unsolicited outcomes like perpetual absenteeism and increases in healthcare costs for the employer. Overworking has been proven to be the cause of several severe health problems (Iwasaki, Takahashi, & Nakata, 2006). Such problems can cause prolonged absences and ghastly hospital bills.

As a result of the various unwanted outcomes, many firms that require large amounts of human resources have had to come up with innovate solutions to this problem, while not cutting work hours to the extent that they would sacrifice efficiency once again. Many firms have implemented fitness programs for their employees as a means of reducing absenteeism and healthcare costs, while also increasing productivity (The American College of Occupational and Environmental Medicine, 1986). In fact, according to a study published in The Journal of Occupational and Environmental Medicine, "Total healthcare costs among exercisers were lower (male $561, females $639) than among non-exercisers (male $1,003, females $1,535)" (The American College of Occupational and Environmental Medicine, 1986). This savings alone is astounding. When simply considering healthcare costs, an employer can save 50% through the incorporation of a fitness program. Additionally, the same study found that illness-related absences also decreased by approximately 50% as a result of increased levels of exercise (The American College of Occupational and Environmental Medicine, 1986). Furthermore, not only can employee fitness help to cut costs, but it can also increase an employee's longevity in the workplace, thus no real efficiency-related sacrifices would have to be made. And while a rigorous fitness program may not precisely coincide with an already physically demanding workplace, the idea of improving the health of employees (perhaps in this case through the offering of healthy meals or supplements) is certainly a viable option.

Although absenteeism and potential health problems unquestionably factor into the inefficiencies accompanying scheduled overtime, they are not the only complementary inputs. Deficiencies in the work environment created by incessant overtime staffing also account for a large portion of why work is not completed as productively during extra hours (Thomas & Raynar, 1997). Such environmental inadequacies are a result of the fact that surpluses in the availability of materials, equipment and information do not always equate to the surpluses in available labor (Thomas & Raynar, 1997). Furthermore, Thomas and Raynar determined that various managerial shortcomings such as "congestion, out-of-sequence work and supervisory issues" also contributed to productive inefficiency (Thomas & Raynar, 1997, p. 2). Using a conversion factor similar to the one above, the professors were able to quantify such factors and graphically illustrate their findings: