HUMAN RESOURCE MANAGEMENT IN THE PROJECT ORIENTED ORGANIZATION:
EMPLOYEE WELL BEING AND ETHICAL TREATMENT
PROJECT REPORT SUBMITTED IN FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF THE INTERNATIONAL MBA IN PROJECT MANAGEMENT BY PRIYADARSHINI S UBI/MBA/I/JUL12/12177 JARO EDUCATION MUMBAI BATCH JUL2012
2
DECLARATION I Ms PRIYADARSHINI S hereby declare that this project report titled HUMAN RESOURCE MANAGEMENT IN THE PROJECT ORIENTED ORGANIZATION:EMPLOYEE WELL BEING AND ETHICAL TREATMENT Submitted in partial fulfillment of the requirement for the International MBA in Project Management is my original work and it has not formed the basis for the award of any other degree. PRIYADARSHINI S Name & Signature of the Student Place: Chennai Date: 20-04-2013
3
ACKNOWLEDGEMENT I feel fortunate to get the support of numerous sources and people making this project success. I would like to thank all colleagues of company for their kind cooperation. I gratefully acknowledge the help provided by my friends and those who gave me their moral support while making this project. PRIYADARSHINI S Name & Signature of the Student
4
INDEX SL PARTICULARS PAGE NO NO 1 INTRODUCTION 5 2 THE PROJECT-ORIENTED ORGANIZATION 6 3
HRM PRACTICES AND PROCESSES IN PROJECT-ORIENTED COMPANY 9 4 THE NATURE OF THE PROBLEM 13 5 APPLYING THE HRM FIELD TO UNDERSTAND PROJECTORIENTED ORGANISATIONS 15 6 CHALLENGES AND CHANGES FOR HRM IN PROJECTORIENTED ORGANISATIONS 18 7 ANALYSIS 31 8 CONCLUSION 32 BIBLIOGRAPHY 9 33
5
INTRODUCTION
Human Resource Management (HRM) in the project-oriented organization is a relatively underexplored topic. This is strange since HRM should be a core process in all organizations affecting the way they acquire and use human resources, and how employees experience the Employment relationship. HRM is of strategic importance to all organizations, contributing to the success of the organization and helping to create competitive advantage. Thus HRM should be linked both vertically and horizontally with the strategy of the organization: Vertically: so that HRM practices support the organizations strategy choices Horizontally: so that HRM practices support other operational practices under the umbrella of the strategy of the organization Project-oriented organizations adopt project-based ways of working as a strategic choice, in response to their customers demands for bespoke products or services, and so the HRM practices and processes adopted by the organization should support that choice, and the HRM and project management practices and processes adopted should support each other. The project-oriented organization adopts temporary organizations in the form of projects and programs, and associated temporary work processes to deliver its products and services to its customers. This creates a dynamic work environment. Every time a new project or program starts or an old one finishes the HRM configuration of the organization needs to change. There is no reason why we should expect the traditional, normative models of HRM to be appropriate for this context. If the project-oriented organization is to adopt HRM practices and process
that are support both vertically and horizontally its strategic choice of project-based working, they should be designed for that purpose. We propose that project-oriented organizations will require both additional and different HRM practices and processes than those suggested by the traditional approaches: They will require additional processes specific to the project and programs they adopt to undertake their work. Projects and programs are temporary organizations, and so HRM practices and processes will be required specific to those organizations. They will require different practices to deal with the dynamic nature of the working environment in the project-oriented organization. Further that dynamic working environment can create additional stresses on employees. For instance work-loads can be difficult to predict, and they can lead to peaks for employees as the demands of projects for different clients peak simultaneously. There can also be uncertainties about an employees forthcoming working environment and the colleagues he or she will be engaging with, which can create additional stresses. Employee well being and ethical treatment can be a significant issue in this context.
6
We therefore explore the kinds of HRM practices and processes appropriate for the project-oriented organization to be strategically linked to the temporary nature of the work processes and the dynamic nature of the work environment. However, rather than just adopting a purely managerialist or unitarist perspective, we are particularly concerned to investigate how these practices and process affect the employees perception of the work environment and the employment relationship. Therefore the aims of our research project are: 1. To explore if, and to what extent, the distinctive characteristics of project-oriented organization lead to the need for specific HRM practices 2. To consider the implications for organizations, projects and individuals of these emergent practices. Elsewhere we have described the new and different HRM practices that arise in the project oriented organization to support the work processes. In this paper we take a managerialist perspective. In this paper we wish to describe what we have found about the practices adopted to manage employee well being. In the next section we describe the nature of the project-oriented organization and how it creates the need for new and different HRM practices. We then discuss the work pressures that arise in this environment, and how they create issues for employee well-being. After describing our methodology, we present our results and draw conclusions.
THE PROJECT-ORIENTED ORGANIZATION
Interest in project intensification, project management and project-based organizations has intensified in recent years. Reasons for this include the need for organizations to adopt appropriate structures to respond to the highly differentiated and customized nature of demand in organizations in the creative and cultural industries, high technology sector and professional and consulting industries. Interest has also increased because of a tendency for firms in all types of industries to undertake projects as a growing part of their operations even while their primary
productive activity might be volume-based or operations-oriented. Most writers distinguish between those companies that do most of their work in projects and/or have a main emphasis on the project dimensions, and firms where the functional dimensions of organizational structure and processes dominate and projects take place in the back office to support the functionally based front office. In essence, what defines a company as project oriented is that it perceives itself as being project oriented and shapes its policies and practices for working, for organizational culture and for strategy towards the challenge presented by management by projects. Majority of products made or services delivered are against bespoke designs for customers. This implies that it is project-based perforce because of the customized nature of the demand from their customers. However, the corporate governance still needs to make the choice to adopt project-based ways of
7
working as a strategic choice. We suggest that the POC is such by choice. It is one in which the people of the organization: 1. Define management by projects as their organizational strategy 2. Apply projects and programs for the performance of complex processes 3. Manage a project portfolio of different internal and external project types 4. Have specific permanent organizations like a project portfolio group or a project office to provide integrative functions 5. View the organization as being project-oriented Thus the POC needs to adopt HRM practices which support this strategic choice. From this list we can identify the specific pressures in a POC which we believe create the need for new and different forms of HRM: TEMPORARY WORK PROCESSES POCs use temporary organizations, (projects and programs) to perform work. Every time a new project or program starts or an old one finishes the human resource configuration of the parent organization changes. Thus not only will the organization require HRM practices in the parent organization, it will need to apply practices specific to the temporary organization that is the project. This creates the need for new HRM practices like assigning personnel to projects, assessing, developing and rewarding their work on projects, dispersing them on project completion, and linking project assignments to careers. DYNAMIC WORK ENVIRONMENT The temporary nature of the work creates dynamic work boundaries and contexts. The number and size of projects performed can constantly change, making predictions of future resource requirements difficult. PROJECT-PORTFOLIO RESOURCE AND ROLE DEMANDS At any time a project oriented company holds a portfolio of different internal and external project types. A person can work in different projects at the same time, maybe even in different project roles. This can create role conflict at an individual level. The organization also needs HRM practices to assign people to several projects or programs, and to smooth the demands between projects and programs. SPECIFIC MANAGEMENT PARADIGM The ideal POC has a specific management culture expressed in the empowerment of employees, process-orientation and teamwork, continuous and discontinuous
organizational change, customer-orientation, and networking with clients and suppliers. Therefore specific competences and skills are needed by project personnel to work together in projects. This may require the POC to adopt training and development practices to develop employees capable of working in the project environment, which in turn may require it to adopt specific HRM practices in these areas matched to the management paradigm adopted.
8
Organizations which perceive themselves as project-oriented and adopt management by projects as a strategic choice are subjected to these pressures. They need to adopt HRM practices which support this strategic choice and align HRM practices vertically and horizontally with it. However, they also need to recognize the pressures placed on the work experience of employees by the dynamic work environment, and adopt and adapt HRM and work practices that look after their well-being and ensure they are treated ethically. We now describe the work pressures which arise in this environment. WELL-BEING OF EMPLOYEES In the dynamic work environment where the HR configuration is constantly changing, the challenges of ensuring employee well-being and ethical treatment is important but may be overlooked. The temporary nature of the work and the dynamic nature of the work environment can create specific pressures on employees. These may include the following: ACHIEVING A WORK LIFE BALANCE Employees can find it difficult balancing their workload in the face of peaks in project work, especially against unpredictable demands from customers. This in turn creates problems in managing their work-life balance. Recent research has shown that companies have problems in grasping the work and emotional situation of the individual and multi role assignments that may lead to burn out for younger employees or to manage the damaging consequences of role overload and role conflict. UNCERTAINTY OF FUTURE WORK ASSIGNMENTS Temporary projects bring a degree of uncertainty for employees who cannot be sure what kinds of projects they will be assigned to or colleagues they will work with. We suggest that both tasks and roles, and managers and co-workers, are core aspects of employee work experience. From an organizational and managerial perspective, failure to address the role conflict of project work may damage efforts to retain workers as both can cause job dissatisfaction and in extreme cases physical, psychological and behavioral withdrawal and voluntary turnover. It can also impact on the organizations initiatives to improve the work environment with staff working away at clients sites. LINKING PROJECT ASSIGNMENTS TO CAREER DEVELOPMENT Finally there is a need to link project assignments to career development, both from an organizational and individual perspective. The organization needs to develop staff for its future projects, but if staff members do not feel that their project assignments offer them the development opportunities they aspire to, they may look elsewhere.
9
When it comes to considering the effects of HRM practices, the organizational or managerial perspective dominates and the effect on individual employees can be
marginalized. Failure to consider the specific requirements of HRM in project oriented companies may mean theorists overlook these issues, and fail to consider effects, positive and negative, of project-oriented work practices in individuals. However, we have also observed that project work does seem to be inherently more interesting than routine work. Project-oriented companies have greater success of retaining their employees doing project work than those doing routine work
HRM PRACTICES AND PROCESSES IN PROJECTORIENTED COMPANY
Based on previous research as well as our review of the project management, general management and HRM literatures as they deal specifically with projectoriented companies, we have developed a simple model of HRM processes in the project-oriented company, Fig. 1b.Fig. 1a illustrates the processes familiar from mainstream HRM literature such as recruitment, employment and release. In addition, there are additional HRM processes in project-oriented companies: assignment to projects, engagement on projects, and dispersion after projects have finished. What we understand by employment by the organization and engagement on projects can be expanded by adapting the Michigan model of HRM, Fig. 2. This shows appraisal, reward and development on the project contributing to appraisal, development and reward in the organization. Fig. 1. HRM in the project-oriented company versus HRM in the classically managed company.
10
Consistent with our commitment to study