What lead to Job Enrichment Programs in Volvo?

Volvo was founded on July 25, 1924, when Gaustaf Larson (Larson), an engineer and Assar Gabrielsson (Gabrielsson), an economist, met over a meal and agreed to build a car suited for Sweden's roads and climatic conditions. The company's automobile engines were known for their reliability and were used in cars, buses, boats, fire tenders and military tanks. While at my service with Ford Motor Company, India, I took a lot of inspiration to how Ford and Volvo amalgamated to bring the best in class among premium segment of cars in the 70's and 80's. More on this in a separate blog.

In 1973 employees there were 41,000 Volvo employees in company owned plants. Additional 10,000 employed through dealer network and 15,000 through VOLVO’s sub-contractors.

Major labor unrest (strikes & other disputes) across Sweden in early 1970s. Characterized by increased absenteeism and employee turnover. VOLVO had to maintain 14% of work force as reserve causing increased HR costs.

Immigrant labors increased diversity at workplace affected work culture leading to disrupted communication system.

In its efforts to reduce employee turnover and absenteeism in its manufacturing facilities, Volvo introduced innovative job enrichment programs and Volvo followed employee centric approach.

What is Job Enrichment?

Involving the workers to managerial functions of the higher ranks is called job enrichment. The job enrichment also increases the self-actualization, self-control and self-respect of the workers.

The concept of Job enrichment has become a fundamental tool for management in improving employee’s motivation and organizational growth. It occurs when an employer through development and intensification, placed extra amount of work on employees with the aim of making it more interesting, meaningful and increasing job challenge and responsibility. Jobs are enriched to motivate employees by adding to their responsibilities with a greater need for skill varieties in their jobs. Due to the rapid change in environment and increasing level of competitive rivalry, organizations are now beginning to shift from the traditional ideological orientation of seeing money as the greatest motivating factor to a situation where workers today will continue to value their work, have more control in scheduling their work and deciding how best the work should be done and to be esteemed for the work they do.

Job Enrichment is a “vertical" enlargement of job duties, providing the employee with tasks and responsibilities normally done by a senior employee or supervisor, and usually comes with more freedom and control over the planning, execution, and evaluation of job tasks.

The rationale behind job enrichment is to motivate employees.

Job Characteristics:

The job characteristics theory of Hackman and Oldham states that employees work hard when they are rewarded for the work they do, and when the work gives them satisfaction. Therefore, motivation, satisfaction and productivity are the three factors that should be integrated into job design.

The job characteristics model, which is based on this theory, identifies the specific job characteristics that affect productivity, motivation and satisfaction and their interrelationships. In this approach, the core dimensions or characteristics of any job have been defined as follows:

• Skill variety: It is the degree to which a job necessitates the use of different skills for the various activities to be performed.
• Task identity: It is the degree to which the job requires completion of a work, from the beginning to the end. The output should be a complete and identifiable piece of work.
• Task significance: It is the importance of the task and the degree to which the job makes an impact on the lives or work of other people.
• Autonomy: The degree to which the job provides freedom and discretion to the employee or worker in scheduling work and in determining the pace and process.
• Feedback: The degree to which objective, direct and timely information regarding the progress and performance of work reaches the employee from the job itself, from the superiors, or from an information system.

Jobs that are high on motivating potential must be high at least in one of the three factors (skill variety, task identity or task significance) that lead to an experience of meaningfulness in the work. They must also be high on autonomy and feedback. The following equation explains what constitutes a Motivating Potential Score (MPS) of a job.

$$ MPS = {(Skill Variety + Task Identity + Task Significance)/3} × Autonomy × Feedback $$

A high motivating potential score indicates a positive effect on motivation, performance and satisfaction of incumbents and reduces the likelihood of turnover and absenteeism.

Merits/Demerits of Job Enrichment

Table 1.

Job Enrichment Initiatives at VOLVO

Job Rotation:

Job rotation is a technique used by employers that would use this method on their employees to rotate their assigned jobs throughout their employment. Employers practice this technique for a number of reasons. It was designed to promote flexibility within an employee and to keep employees interested into staying with the company/organization they are employed with. There is also research that shows how job rotations help relieve the stress of employees who work in a job that requires manual labor.

Volvo’s plant workers were enthusiastic about the job rotation programs. About 20% of the 7000 employees at the car assembly plant in Gothenburg participated in the programme, implemented in various departments at the plant. The programme was useful for both the management and the employees. For instance, the women at the factory’s upholstery unit were required to handle the tasks of assembling car seats. Each woman was assigned a separate task for this job. Doing the same task repeatedly caused severe physical strain, making the women take several days of leave or even ask for a shift to another job.

Management-Employee Councils:

Volvo introduced an innovative HR concept – management-employee councils -- to enhance employee participation in framing employee welfare policies. For instance, the Gothenburg car assembly plant had Local Works Council (LWC) along with 16 sub-councils spread across manufacturing and staff departments. These sub-councils and committees enabled local work councils to handle issues relating to production and marketing surveys and financial reports. The plant also had a working committee within the LWC that consisted of 10 members, of which two were from the management, four from the salaried personnel and three from assembly line workers. The committees looked after varied aspects such as developing plans for improving working conditions, employee policies, health and safety.

Small Work Groups:

Volvo also made attempts to improve employee satisfaction by introducing small work groups. Instead of a task being performed by an individual, teams of three to nine people were created, who divided the work among them. Each group was allotted a particular task and a timeframe was set to accomplish it. The group was responsible for dividing the work, using the required equipment and handling necessary procedures. The group, rather than individuals, was compensated in tune with results.

Each group had a leader and a foreman; and both were acquainted with behavioral sciences and human development theories during training. Group members took turns to become team spokesperson, who would voice the group’s problems to supervisors.

Change Implementation:

Based on the insights obtained from the experiments as well as employee feedback, Volvo developed a comprehensive change strategy, involving two focus areas – work environment and work design. Alongside, the management realized that the existing mechanically operated assembly lines in its plants hindered its plans for employees. Work could not be adapted to people unless their basic work design – the way they worked at the shop floor -- was changed. The traditional assembly line set up, where, workers had to perform the same task over and over again as the vehicle body moved along the conveyor belt, was proving a major obstacle to changing work design. To solve this, Volvo decided to design new plants keeping in mind workers’ requirements and the nature of work, rather than using pre-designed set ups.

Volvo also spent millions of dollars from 1972 to 1977 on improving working conditions at its existing facilities. The manufacturing facilities were always kept clean and the shop floor was made more congenial so that workers were motivated to do their jobs well. Rather than considering it another financial obligation, Volvo felt it a responsibility towards its employees. Volvo also felt that work environment changes would prove worthless unless basic job design was modified. So, jobs of a repetitive nature were automated. To realize the full effects of change, active worker involvement was an absolute necessity. A mechanism had to be installed so that their voices were heard. The final element of Volvo’s change strategy, therefore involved the overall development of individual employees in all spheres, including work. The company provided opportunities to employees to acquire more skills and build their careers at Volvo.

Employee Oriented Facilities:

Volvo’s new plants at Kalmar (cars), Skovde (engines), Umea (truck cabins) and Hallby (tractors) served as a testing ground for the hypothesis of adapting work to people rather than other way round. Volvo’s Kalmar plant commenced operations in February 1974. In Kalmar, the company implemented its pioneering socio-technical approach to automobile manufacturing, giving importance to people as well as technology. Volvo implemented the worker-centric production system, different from the typical assembly line system6. Instead of individual workers assembling the car body as it moved along the conveyor, the plant had the car body moving around the plant, mounted on a carrier, which stopped at a work area where teams of people worked on the car. The plant layout comprised four hexagon-shaped structures, called wings, joined together. The common area between the structures was where the production material was stored and distributed to the respective wings.

Conclusion

Job enrichment is an excellent means of enhancing employee job satisfaction and prevention of staff turnover or intention to leave an organization. Job enrichment has become an essential aspect in motivating employees for better and greater performance through a mutual sense for skill variety, task identity, task significance and autonomy. Increased recognition of task significance will stimulate the employees to further raise their commitment towards the attainment and realization of the goal and objectives of the institutions/organizations. The principle of job enrichment in the practice of human resource management has tremendously been seen as a dynamic process of increasing the work structures and processes with an environment that gives room for autonomy, flexibility, personal growth and satisfaction to the workplace. Strike a balance between increasing job responsibilities and job enrichment opportunities. This is the key to keep employees satisfied, motivated and focused on success - both for themselves and their company.