Human Resource Management in the Project-Oriented Organization

Towards a Viable System for Project Personnel

Martina Huemann

• Publisher: Routledge
• Year: 2016
• Topic: Business
• eBook ISBN:
  9781317119944
• Subtopic: Business General
• Index: Business

Organizations regularly assume that the culture, values, dynamic and organization of their temporary project organizations are merely a smaller version of the original parent. Given that project organizations are made up of people and teams drawn, in most cases, from outside and inside the parent, these assumptions are nonsensical. But they do explain why the HR function finds it difficult to adapt to the project environment. Martina Huemann's research in Human Resource Management in the Project-Oriented Organization, offers insight into an approach that is designed to align HR to the needs of the project organization, in terms of management structure, reward, recruitment and performance systems. The text analyses how the modern HR organization stacks up alongside the temporary organization that is the project, to identify the HR constraints and needs of the project organisation and offer a model of project-oriented HRM. Professor Huemann had a deep interest in how and why change processes come into existence and how to design and enable them. In her book she endeavors to bridge theory and practice, strategy and operations.

1 Introduction

1.1 The Purpose of this Book

Human Resource Management (HRM) is central to any organization. HRM practices ensure the organization’s potential to perform, but more comprehensively, a viable HRM system that supports and is supported by company strategy, structures and culture ensures sustainable development of any organization, in particular the project-oriented organization.

The project-oriented organization,¹ with its organizational strategy Management by Projects, its combination of permanent and temporary structures and its specific project-oriented culture (Gareis 1990; 2005), is a specific context for the HRM system. The project-oriented organization requires the adoption of the HRM system to create a viable design that acknowledges projects and project-orientation. This is evident in recent and not so recent studies. However, HRM practitioners often have little understanding of projects or project management, and thus do not understand and initiate organizational consequences that project-orientation brings for the HRM system (Turner et al. 2008a). To support project-orientation, often HR departments concentrate on organizing project management training for project managers, instead of asking themselves how projects as temporary organizations may affect strategies, goals, processes, organization, infrastructure and the HRM system values, in order to truly ensure alignment with the needs of the project-oriented organizations, the projects and the expectations of the project personnel. Nevertheless, there are some HRM systems in project-oriented organizations that have changed to be able to support project-orientation. They have developed towards a project-orientation HRM system in order to increase the potential that projects can bring to the organization.

1.2 The Relevance of Projects and Project-Oriented Organizations

The management of projects is of considerable economic importance. A careful estimate indicates that projects initiate about one-third of the global gross domestic product (Turner et al. 2010). Thus projects support the creation of considerable economic and social value. Projects are increasingly widely applied in organizations (Cleland/Gareis 2006; Whittington et al. 1999). In addition to traditional contract projects, internal projects such as marketing, product development and organizational development have gained importance in all kinds of industries and in public administration (Morris 1997).

The word project means idea or plan. While projects have had a much longer history, the birth of modern project management can be dated to around 1940.² As an offshoot of operation management, scheduling methods like the gantt chart, originally invented for routine processes, were adapted for project management (Geraldi/Lechler 2012). The first projects to do this were technology and science projects.³

During the 1960s and through to the 1980s, the application of projects as an efficient working form and their management concepts were transferred to different industries. A number of companies began to establish projects that cut across functional lines in order to accomplish project objectives. The first industries to implement project management were construction and engineering, as their projects were often technically complex and relatively similar to the military sector, one of the first industries to apply project management.

In his analysis of classic literature about project management, Söderlund (2012) outlines what Sayles and Chandler (1971) refer to as a temporary organization, and that project management as an organizational concept goes far beyond the application of tools. However, in general and over a long period of time, project management has been perceived rather narrowly and has been reduced to tools such as PERT diagrams and gantt charts which have been considered as synonyms for project management (Maylor 2001; Schelle 1989) as these have been easy to communicate in textbooks (Söderlund 2012).

Gradually, projects spread to different industries and different types of projects were applied. While originally reserved for the defence and space industries, investment projects began to appear in engineering and construction, and in the 1980s and 1990s information technology and hi tech businesses began practicing project management, mainly when contracting assignments and product development. Over the last 20 years, projects have become popular in all kinds of organizations and increasingly in the public sector. Various external and internal projects such as marketing, organizational development and personnel development have taken place. Today, projects can be found in private and public organizations for both development and production. Projects are especially prevalent in growth industries such as information technology, management consulting, technology consulting, knowledge and technology-based companies, entertainment, culture, media and advertising, but also in the mature industries such as the automotive industry and the electronic equipment industry (Morris 1997; Söderlund 2011).

Table 1.1 illustrates the expansion of project management over the years and the spread of projects into different industries and into the public sector. This spread of projects and project management is closely linked to the rise of global project management associations, which have contributed to the establishment of a project management profession.⁴ The relevant topics shown for the different periods indicate that in research the unit of analysis has expanded from the project to the project portfolio, the project-oriented organization, and society.

Table 1.1 Overview on project management periods

Source: Adapted from Morris 1997; Söderlund 2011, extended by Huemann.

Related to the increasing importance of projects and the notion that projects can bring competitive advantage (Wheelwright/Clark 1992), the management of projects becomes a capability increasingly required in more or less any contemporary organization (Thomas/Mullaly 2008). The project-oriented organization as a form of the contemporary organization (Martinsuo et al. 2006; Ruigrok 1999; Whittington et al. 1999) is different to a classically managed organization, as managing projects requires specific organizational strategy, structures and culture (Gareis 1990). In society as well as in organizations, the role of the project manager is increasingly being recognized as an occupation and profession in its own right (Morris et al. 2006).⁵

With this increased recognition of the importance of projects and the impact of project managers, there have been developments in both practice and theory. The developments of practice have been heavily user-driven, notably by the two leading project management associations (International Project Management Association, Project Management Institute), which currently retain their influence over practice. This influence comes through their highly normative and universalist project management standards, which form the base for project management certification of project managers. Project management research has become more theoretically-based over time, but has remained mostly practice-oriented with the aim of contributing to contemporary management practice (Söderlund/Maylor 2012). In contrast to the normative practices being advocated by the professional associations, scholars have started developing more context-related theories (e.g., Hodgson/Cicmil 2006). In addition, multiple streams of project management research have built on different theories and perceptions, with the result that project management has grown into a young academic field of some diversity and complexity (Söderlund 2011; Turner et al. 2010).

As an applied field, project management research has long concentrated on the sophistication and optimization of tools and techniques to ensure that projects are delivered on time, in scope and within set costs. Optimization tools such as the Critical Path Methods (CPM) and Program Evaluation and Review Technique (PERT) reflect the genesis of project management (Turner et al. 2010). Having its roots in engineering and operation research, project management has long been lacking an organization theory approach. However, project management is more than Gantt Charts (Maylor 2001) and has considerably broadened its horizon (Söderlund 2004) during the last ten years. The broadening of the field includes two developments, namely the conceptualization of projects as temporary organizations and an increasing interest in the organization being able to conduct projects – the project-oriented organization.

Today, a critical mass of researchers uses the conceptualization of projects as temporary organizations (for a detailed literature review see Bakker 2010; Lundin/Söderholm 1995), which adds a different view to the traditional perception of projects. The traditional view of the project as a complex technical system (for example Cleland/King 1983) is characterized by rationality and the management of time, cost and scope. The perception of a project as a temporary organization adds to the relevance of the project organization, project culture, personnel and the project contexts when managing a project (Engwall 2003; Sahlin-Andersson/Söderholm 2002). Whilst project HRM has long been considered as part of project management, prevailing project management standards reflect a limited and rather traditional HRM paradigm, considering HRM mainly as a planning and scheduling issue of the project (PMI 2013). By contrast, conceptualizing projects as temporary organizations opens up a much broader perspective of HRM for projects and project-oriented organizations, which will be discussed in this book.

The project-oriented organization has become an object of consideration in research. Organizations that conduct projects are called ‘projectified’, ‘project intensive’, ‘project-led’, ‘multi-project’, or ‘project-based’. While labels and conceptual underpinning vary, the basic assumption is shared, that projects can be considered as a means of organizational differentiation to allow the increasing complexity of the environment to be dealt with (Morris 1997). In contemporary organizations a paradigm shift with projects as a specific and significant characteristic is observable (Clegg 1990; Whittington et al. 1999). Nevertheless, not every project-based organization is project-oriented – by that I mean adequately equipped to perform projects. I explicitly use the term project-oriented organization for an organization that applies Management by Projects as a strategic option for organizing business processes by projects, when adequate (Gareis 1990; 2005). This implies that the organization chooses between temporary projects and permanent organization to perform business processes, and is capable of doing so. It also implies that the organization is sufficiently equipped to perform projects.

Other temporary organizations can also be programmes. I acknowledge that programmes as temporary organizations are of relevance for the project-oriented organization, and there are specifics of programmes and programme management (see for example Pellegrinelli 1997). While programme and the programme management personnel are not specifically addressed in this research, many of the discussions in this book are equally relevant for HRM on programmes and for programme personnel.

1.3 Is a Fresh Perspective on HRM Required?

It is common practice to argue that Human Resource Management (HRM) is of strategic importance in all organizations (Boxall 2011), contributing to the financial success of the organization (Guest 1987; Huselid 1995; Pfeffer 1998). Boxall and Purcell (2011) position HRM as one of the vital parts of any organization – if it fails, then the company fails.

In Strategic Human Resource Management (SHRM) there is the claim that HRM practices should support strategy and eventually contribute to shaping strategy (Ulrich 1997). However, scholars describe HRM research as unbalanced. This is because Micro HRM concentrates on very distinct HRM practices or sub functions, and is often silo-based (Wright/Boswell 2002). In contrast, strategic HRM is critiqued for remaining on an abstract level and lacking operational relevance (Legge 2005).

While a central scholarly focus of SHRM has been on performance measuring issues and the effects of single HR practices or bundles of HR practices, the field has developed further and today takes a more holistic perception of a viable HRM system adequate for its purpose and context. A viable HRM system is aligned to its organizational context, which includes strategy, structure and culture of the organization, as well as its institutional context (Wood 1999).

The HRM literature acknowledges the contextual nature of HRM (Paauwe 2004), the diversity of HRM practices deriving from the contemporary organization (Poole/Jenkins 1997), the differences of HRM in comparative HRM research (Brewster 2012), as well as the need to bring in principles of sustainable development into Human Resource Management to ensure the expectations of the organization, individuals and society (Zaugg 2009).

However, research into what projects – as temporary organizations in addition to the permanent structures in an organization – mean for the HRM system is rare. While there is evidence that project HRM is considered as a core knowledge element in project management standards (e.g., PMI 2013) and project excellence models (IPMA 1997), project HRM is relatively immature (Belout 1998; 2004). Little awareness exists that HRM is taking place beyond the line on the project (Bredin/Söderlund 2011; Keegan et al. 2012). On the other hand, the theme is not new, as HRM implications, due to project-orientation of the organization, have been indicated by recent and not so recent studies. Engwall et al. (2003: 130) note the necessary changes in HRM when an organization applies projects:

As organizations move into project-based structures, human resource management, hiring of staff, and competence development all seem to be affected. This is, however, a virtually unexplored area of empirical research. Furthermore, issues concerning working life must be readdressed in this new corporate context design. From the perspective of the individual employee, factors like motivation, commitment, empowerment, job satisfaction, time pressure, and medical stress seem to be reconceptualized in the projectified context. Working life issues also include accounts of project work as a new career path and as ways of linking project organizations to individual goals.

On the one hand, the list of HRM challenges in project-oriented organizations indicated in literature is quite long and includes the authority and responsibility of project managers (Fabi/Pettersen 1992; Gaddis 1959), the careers of project managers (Jones/DeFillippi Hölzle 2010; 1996; Keegan/Turner 2003; Larsen 2002), salaries and promotion of project managers (Allen/Katz 1995), employee well-being, stress (Aitken/Crawford 2007; Gällstedt 2003; Zika-Viktorsson et al. 2006), resource planning and allocation of personnel (Engwall/Jerbrant 2003; Eskerod 1998), and no home syndrome of the project manager (Keegan/Turner 2003), as well as the HR quadriad, a configurational framework to describe the interplay between line managers, project managers, project workers and HR specialists in the project-based organization (Bredin/Söderlund 2011). On the other hand, there are little considerations regarding the potential that project-orientation may provide to the HRM system, although there is evidence that there are HRM related benefits to be gained from the introduction of projects and project management into an organization (Thomas/Mullaly 2008).

There are no offers of viable solutions as to what a HRM system could look like in order to support project-orientation – particularly, there are no viable solutions that consider the organizational context as well as the expectations of the project personnel to support sustainable development of the project-oriented organization. Thus, this study addresses the following research question:

Which HRM system is viable to the project-oriented organization in order to raise the HR related potential that project-orientation can bring?

1.4 What is the Fresh Perspective?

In this research, I include and build upon a series of related studies in which I was involved (Huemann et al. 2007; 2004; Keegan et al. 2012; Turner et al. 2008a; 2008b) and consider relevant studies of other researchers (Bredin/Söderlund 2011; Loosemore et al. 2003) to develop a more comprehensive understanding of a viable HRM system ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Contents
• List of Figures
• List of Tables
• Preface
• Acknowledgements
• 1 Introduction
• 2 HRM in Context
• 3 The Project as a Temporary Organization
• 4 The Project-Oriented Organization
• 5 Project Personnel and their Challenges
• 6 HRM for the Project-Oriented Organization
• 7 A Changing HRM System
• 8 Towards a Project-Oriented HRM System
• 9 Conclusion
• Appendix: Research Objectives and Approach
• References