Effect of imprecise skill level on workforce rotation in a dynamic market

Abstract This paper proposes a methodology to reveal the relationship between system profitability in a dynamic market and imprecise skill level of the workforce, as measured by an expert responsible for workforce rotation. The simulation analysis of a manufacturing case study reveals profit outcomes under precise and imprecise skill environments are found to be significantly different; therefore, ignoring impreciseness can lead organizations to inaccurately forecast their profitability. The analysis further leads to the following key findings in dealing with employee skill assessments and dynamic assignments: (1) Regardless of skill level of the workforce, capturing impreciseness is less important for organizations operating in volatile market conditions compared to organizations operating in mildly volatile or stable conditions; (2) Regardless of market conditions, organizations with a highly skilled workforce, compared to those with moderate or low skill levels, can realize a higher value in capturing impreciseness; and (3) There is a marginal value on skill level which enforces a resource trade-off between improving skill level and capturing impreciseness in skill level assessment.

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