PRODUCTIVITY GAINS AT WHIRLPOOL Workers and management at Whirlpool Appliances Benton Harbor plant in Michigan have set an example

of how to achieve productivity gains, which has benefited not only the company and its stockholders, but also Whirlpool customers, and the workers themselves !hings werent always rosy at the plant "roductivity and #uality werent good $either were labor%management relations Workers hid defective parts so management wouldnt find them, and when machines broke down, workers would simply sit down until sooner or later someone came to fix it All that changed in the late &'()s *aced with the possibility that the plant would be shut down, management and labor worked together to find a way to keep the plant open !he way was to increase productivity%producing more without using more resources +nterestingly, the improvement in productivity didnt come by spending money on fancy machines ,ather, it was accomplished by placing more emphasis on #uality !hat was a shift from the old way, which emphasi-ed volume, often at the expense of #uality !o motivate workers, the company agreed to gain sharing, a plan that rewarded workers by increasing their pay for productivity increases !he company overhauled the manufacturing process, and taught its workers how to improve #uality As #uality improved, productivity went up because more of the output was good, and costs went down because of fewer defective parts that had to be scrapped or reworked .osts of inventory also decreased, because fewer spare parts were needed to replace defective output, both at the factory and for warranty repairs And workers have been able to see the connection between their efforts to improve #uality and productivity $ot only was Whirlpool able to use the productivity gains to increase workers pay, it was also able to hold that lid on price increases and to funnel some of the savings into research Questions & What were the two key things that Whirlpool management did to achieve productivity gains/ 0 Who has benefited from the productivity gains/ 1 How are productivity and #uality related/ 2 How can a company afford to pay it workers for productivity gains/

MAKING HOTPLATES 3roup of &) workers were responsible for assembling hotplates 4instruments for heating solutions to a given temperature5 for hospital and medical laboratory use A number of different models of hotplates were being manufactured 6ome had a vibrating device so that the solution could be mixed while being heated 7thers heated only test tubes 6till others could heat solutions in a variety of different containers With the appropriate small tools, each worker assembled part of a hotplate !he partially completed hotplate was placed on a moving belt, to be carried from one assembly station to the next When the hotplate was completed, an inspector would check it over to ensure that it was working properly !hen the last worker would place it in a specially prepared cardboard box for shipping !he assembly line had been carefully balanced by industrial engineers, who had used a time and motion study to break the 8ob down into subassembly tasks, each re#uiring about three minutes to accomplish !he amount of time calculated for each subassembly had also been 9balanced: so

that the task performed by each worker was supposed to take almost exactly the same amount of time !he workers were paid a straight hourly rate However, there were some problems Morale seemed to be low, and the inspector was finding a relatively high percentage of badly assembled hotplates .ontrollable re8ects%those 9caused: by the operator rather than by faulty materials%were running about 01 percent After discussing the situation, management decided to try something new !he workers were called together and asked if they would like to build the hotplates individually !he workers decided they would like to try this approach, provided they could go back to the old program if the new one did not work well After several days of training, each worker began to assemble the entire hotplate !he change was made at about the middle of the year "roductivity climbed #uickly By the end of the year, it had leveled off at about (2 percent higher than during the first half of the year, although no other changes had been made in the department or its personnel .ontrollable re8ects had dropped from 01 percent to & percent during the same period Absenteeism had dropped from ( percent to less than & percent !he workers had responded positively to the change, and their morale was higher As one person put it, 9$ow, it is my hotplate : ;ventually, the re8ect rate dropped so low that the assembly workers themselves did all routine final inspection !he fulltime inspector was transferred to another 8ob in the organi-ation Questions & What changes in the work situation might account for the increase in productivity and the decrease in controllable re8ects/ 0 What might account for the drop in absenteeism and the increase in morale/ 1 What were the ma8or changes in the situation/ Which changes were under the control of the manager/ Which were controlled by workers/ 2 What might happen if the workers went back to the old assembly line method/