MANAGING HUMAN RESOURCES IN THEPROJECT-ORIENTED COMPANY
Martina Huemann, Rodney Turner, and Anne Keegan
In this chapter we describe the characteristics of human resource management (HRM) inthe project-oriented organization. Human resource management is a specific and strate-gically important process in the project-oriented organization. It includes recruitment, dis-position and development, leadership, retention, and release of project managementpersonnel.
The contents of this chapter are based on recent research into the HRM in the project-oriented organization and project-oriented society. First we describe the changing nature ofHRM in the project-oriented society and consider the impact on project management per-sonnel and their careers. We then consider the different types of project personnel who needto be managed in the project-oriented organization and describe the HRM processes in theproject-oriented organization. We end by briefly describing the role of the PM office inmanaging project management personnel.
Human Resource Management in the Context of theProject-Oriented Society
A change toward a project-oriented society is observable. Gareis and Huemann (2001) definea project-oriented society as one that does the following:
Considers projects and programs as an important form of (temporary) organization forachieving strategic and change objectives
Supports a relatively high number of project-oriented organizations
The Wiley Guide to Managing Projects. Edited by Peter W. G. Morris and Jeffrey K. PintoCopyright 2004 John Wiley & Sons, Inc.
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Has specific competencies for managing of projects, programs, and project portfolios Has structures to further develop these management competencies
The fact that there are increasingly more projects performed in society is explained by theevolutionary demand for projects (Lundin and Soderholm, 1998). Not just traditional in-dustries, but many others, including the public sector, perceive temporary organizationssuch as projects and programs as appropriate to perform business processes of medium tolarge scope. Beside traditional contracting projects, other types, such as in marketing, prod-uct development, and organizational development, have gained in importance. Projects andproject management are applied in new social areas, such as local municipalities, associa-tions, schools, and even families. Management by projects becomes a macroeconomicstrategy of the society, to cope with complexity and dynamics and to ensure quality of theproject results (Gareis, 2002). Further, project management is being established as a profes-sion. The Project Management Institute estimates that there are about 16 million peopleworldwide who consider project management as their profession (Gedansky, 2002).
Individuals Work More Often in Temporary Organizations
In project-oriented societies, there is a trend for individuals to get temporary assignmentsas they work on successive projects and programs. Project participants move from oneproject to another, often from one company to another, and even from one country toanother. This creates a picture in our minds of project nomads, whom we might thinkof as having an adventurous life. However, the personnel manager of an international en-gineering company pointed out that these nomads have to move from one place to theother because the country is too poor in which to settle down permanently. Similar picturesare drawn by Drucker (1994) when he describes the knowledge workers and Handy (2002)when he describes the life of a the self-employed flea. Handy (1988) previously describedsuch people as being like freelancers, literally mercenaries at the time of the crusades, whowere not part of the regular army. Temporary employment and self-employment is increas-ing. Lifetime employment and permanent careers become rare. Acquiring project manage-ment competencies, keeping them state-of-the-art, and getting them certified becomes anissue, even for those project management personnel who belong (permanently) to a project-oriented organization. An individual has to take on the responsibility for the acquisition ofthe competencies demanded and of his or her professional development to keep employable.
Characteristics of HRM in Project-Oriented Organizations
What are the features of project-oriented firms that influence the nature of employmentwithin them? Projects are temporary organizations undertaken to bring about change(Turner and Muller, 2003; Lundin and Soderholm, 1998). Some, primarily functional, or-ganizations undertake occasional projects to enact specific changes. They can adopt classicalhuman resource management practices and assign resources to projects from within thefunctions as necessary. But for project-oriented organizations, projects are their business; the
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majority of the work they do is project-based. Turner and Keegan (2003) showed that theyneed a different approach to human resource management than the classical approachadopted by functionally oriented organizations.
As temporary organizations, projects are unique, often novel, and transient. Beingunique, the organization has never done exactly this before. They often require novel proc-esses and have novel resource requirements. Being unique and novel, the method of deliverycan be uncertain. The consequences on human resource management requirements are asfollows:
The present and future resource requirements of the organization are uncertain. People follow careers other than climbing the ladder up the functional silo. People may not have a functional home to belong to.
In the classically managed, functional organization, resource requirements are assumed tobe well determined. The jobs to be done are well known from past experience. A jobdescription is written for a job, defining what is to be done, the levels of managementresponsibility required, and the competence required, including levels of education andtraining and past experience. Somebody is recruited in accordance with that specification.There is a saying, You grade the job and not the person. The requirements of the jobare defined, and the best match is found to those requirements.
That level of certainty often does not exist in the project-oriented organization:
1. Projects are unique and transient, with high uncertainty. It is often not possible to defineprecisely the requirements of the current job. You need to recruit people known to workwell on projects and, to an extent, let them define the job around themselves. (Thoughthis is true of many other management positions as well, of course.)
2. Contract organizations often cannot precisely predict the levels of resource requirementsinto the immediate future. They may have several jobs at the moment, with one comingto the end, and several bids out. For instance, consider that they have five bids out,with a normal success rate of winning one bid in five. If they achieve that, they willhave one job to replace the one coming to an end. If they are successful with none,their workload will fall; if they win two, they may just cope; if they win three, they willbe overloaded. Keegan and Turner (2003) report that the only way project-orientedorganizations cope with this uncertainty is by employing between 20 percent and 40percent contract staff. They report one organization employing up to 80 percent contractstaff. This is essential to cope with fluctuating and uncertain workloads.
3. As for forecasting future resource requirements, if it is not possible to predict resourcerequirements one month out, how can anyone predict them one year out? Organizationscan assume they will carry on doing the same types of projects, and they will try to useeconomic forecasts to predict future numbers of projects in the industry. However, it ismuch less certain than in a functional organization.
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The Spiral Staircase Career
The consequence for peoples careers is good news and bad news. The bad news is they donot have the comfortable certainty of a clear career path where they can climb the ladderup the functional silo. The good news is they have much more varied and interesting careers.Projects, being transient, cannot provide careers, but each project can be a learning oppor-tunity in a career. Projects provide an opportunity for a broad sweep of learning experiences.Keegan and Turner (2003) coined the phrase the spiral staircase career to reflect thatpeople will move through a series of varied and wide-ranging jobs. They might spend timein the design function, time as lead designers on a project, and time as project managers.Rather than each move being a whole step up the ladder, moves can be half or even aquarter of a step sideways and upwards. People can also avoid the Peter Principlenamely,being promoted to the level of their incompetence. If they find themselves in a job that doesnot suit them, they can take a move sideways, which does not carry any stigma, comparedto taking a step down the ladder of the functional silo.
No Home Syndrome
Coupled with varied career is the no home syndrome (Keegan and Turner, 2003). Peoplespend their working lives moving from one project to another. They generally do not havea permanent home, or a permanent sense of belonging. They work on one project for 9 to18 months; then that team breaks up and they move to a new team. This creates thenomadic life mentioned previously, but it also increases the need for team building onprojects to create a sense of belonging to the project (Reid, 2003). A practice adopted bymany project-oriented firms is the creation of the PM office, or an expert pool of projectmanagers. This can provide workers a home base between projects and a place to con-tinue to belong to and seek support while working on projects. Sometimes the PM officemay be virtual but still satisfy these needs.
Project Management Personnel
In project-oriented organizations, we can differentiate several different types of resources,including line management, technical experts, and project management personnel. Projectmanagement personnel are those human resources who need to draw on project manage-ment knowledge and experience to fulfil their roles. They include project managers but alsoinclude people in other project roles. The HRM practices we discuss in this chapter applyto project management personnel in the first instance. The project-oriented organizationmay apply similar processes, or conventional ones, to people working in line managementor as technical experts. Project management personnel include people working in temporarystructures such as projects and programs, and people working in permanent structures suchas a project management office, a project portfolio group, or an expert pool. The formergroup includes the following:
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1. Project personnel, such as: The project owner, project sponsor, or project champion The project manager, project leader, or project director The project management assistant The project controller Project team members and project contributor
2. Program personnel, such as: The program owner or program director The program manager, project director, or program coordinator The program assistant or program controller Program office members
People working in permanent structures include the following:
Project management office personnel such as the office leader and office members. Theyare the process owners for the project management process within the project-orientedcompany. Further functions of the project management office are described later in thischapter.
Project portfolio group members who take the responsibility to manage the project port-folio from a strategic perspective. Usually these members of the project portfolio groupare managers of those business units of the permanent organization, which are frequentlyinvolved in projects and programs.
Quality management personnel such as project or project management auditors andreviewers, project or project management coaches, and project or project managementconsultants.
Expert pool personnel such as the leader of the project expert pool and the members ofthe project expert pool. From these expert pools the project personnel is drawn.
The project portfolio office leader, project portfolio group members, and project expert poolleaders are often labeled as project executives. Employees in the project-oriented companyoften have more than one role and can therefore belong to different groupings of projectmanagement personnel. For example, one person can be a program manager for one projectand at the same time work as project coach for a different project.
Competences of Project Management Personnel
As part of their HRM policies and practices, project-oriented firms need to define compe-tence requirements for all these project management personnel. (Competence developmentis described in Gales chapter). Competence is the knowledge, skills, and behaviors (expe-rience) a person needs to fulfill his or her role (Huemann, 2002). Project managementpersonnel need a set of several competencies covering not just the management of projectsbut also the following:
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FIGURE 42.1. MINIMUM COMPETENCE REQUIREMENTS OF A SENIORPROJECT MANAGER.
very much 4
Project and Program Management
Management of the Project-Oriented Company
Project management. Knowledge and experience about project and program managementincluding methods and processes
Organization. Knowledge and experience about the project-oriented organization at itsspecific processes like portfolio management, assignment of projects and programs, andso on
Business. Social networks, product, industry, and so on Technical. Technical, marketing, engineering, and so on Cultural and ethical awareness. As in the case of international projects.
How these competencies are described is specific to the company and the project manage-ment approach used. It may be traditional, emphasizing scope, cost, and time, as in PMIsPMBOK (2002); it may be more holistic, emphasizing process orientation, as in PRINCE2(OGC 2002); or it may emphasize also project context and organization, as proposed byGareis (2002) and Morris (1997) or the Association for Project Management (APM, 2000).There is always a lot of discussion on how much technical competencies the project man-agers need to manage a project. The range goes from nontechnical competencies to beinga technical expert as well as a project manager. The more project management is considereda profession in the organization the less technical competencies may be asked for. Fig...