Project management has been based on a wide range of authority for the project manager. Project expediter, project coordinator, matrix project manager, and line project manager represent increasing degrees of authority. Underlying these organizational approaches to project management, however, are the highly formalized techniques of applying specifications, work breakdown structure, work packages, critical path network planning and control, and reports of performance cost time.
Adherence to such methods for managing human, financial, physical and time resources has increased the effectiveness and efficiency of managing the uncertainties which are characteristic of the development of projects. The approach to project management has been deliberately mechnaistic, based on the assumption that if target dates and financial plans are achieved, then all is well. The productivity of humans has been implicity assumed to be at a historically established level.
While project managers are certainly aware of special needs of people, in most cases, they are essentially task-oriented. Otherwise they would not have become project managers. What is being overlooked, however, is that the possible gains from improved management of financial and physical resources have approached their limit whereas possible gains of 20-50% from better management of human resources are readily possible. To illustrate what this means in profits, consider this analysis by Rensis Libert.1 He asked a great many managers what it would cost to build their present human organization from scratch. They consistently put the figure at 3 to 4 times the payroll. Then, the value of the human resources system (HRS), based upon its cost is:
Minimum Value of HRS = 3 x payroll
Average Payroll = 8 x earnings
Thus, the value of HRS = about 25 x earnings.
Increasing productivity by 5% means increasing the value of HRS by 5%. Thus an increase of 5% of (25 x earnings) = 125% x earnings. Further, a 5% increase in productivity could conceivably produce a 125% increase in earnings. A 20% increase in productivity would produce a 500% increase in earnings!
The fact that humans, under the appropriate conditions, can expand their contributions tremendously is what distinguishes them from other resources. In Figure 1a, we graph the typical view of project resources. Figure 1b shows the potential of project resources with expansion of human contributions in a third dimension.
What we have today is a breakthrough in utilizing human potential. The gains from improved management of human resources are no more suprising than the gains that have been achieved by project management with its associated programming and control techniques.
Negative Impact of Tightly Structured Project Management
While a systems approach to managing development work helps us organize the work, implementation of this approach often has a negative impact. In a study believed to be the largest and most comprehensive to date on project management effectiveness, Murphy, Baker, and Fisher found that PERT techniques contribute little to success compared with other factors. In fact, PERT techniques were concluded to be over-used, over-detailed, creating excessive control, and thus detracting from project effectiveness.2
The tightly structured project organization tends to restrict cross-organizational communication. Communication flows up and down, but downward communication is largely for control purposes and upward communication is often distorted to give a favorable impression of progress.
Because objectives originate at the top of the project, and are subdivided as they are passed down, there is little opportunity for creative contributions. In brief, people are treated as units of resources under present project management practice.
In Figure 2, the present systems view of project management is represented within the total business system. If the potential of human resources is essentially ignored, people will not be able to contribute to the total business objectives. Rather, project objectives will rigidly dominate all activities, even when they may grow to be in conflict with business objectives. The creative input and the commitment of people will be condensed into the surface system of techniques. The true systems view of the business and project management should include the major subsystem of human resources management.
The Human Resource Management System
Managing human resources involves recruiting people, developing people, maintaining the right mix of people, and creating conditions that will result in high motivation of individuals. This process is illustrated in Figure 3.
As an empirical system, the human resources system must have inputs, objectives, a set of processes, and an output. In addition, a feedback process is built-in to keep output consistent with objectives. The outputs of the system are produced by group and individual performance. Therefore, both organizational and individual development are carried out to increased system output.
The organizational structure, responsibility and decision assignments, information system and manpower planning are included in organization planning. Organization planning and search of the human resources inventory provide the primary sources of staffing needs. Staffing needs which are not filled by this inventory trigger the employment process. Both manpower planning functions and employment activities should be future-oriented.
Modification of the work climate and the individual are of great importance in this systems view. Modification of the individual is directed towards both observable behavior and internalized satisfactions, growth, values, and commitment. Resulting from modification of the work climate and development of the individual, we obtain organizational and individual performance.
In Figure 3, we started with the establishment of objectives as the input to the human resources management system. We now feed back organizational and individual performance appraisal information to the human resource planning system for adjustment. In addition, performance appraisal of the HRS becomes part of the input to the system for evaluating company capabilities.
We Desire the Commitment of People’s Minds
Jerry Kramer played football for both Coach Vince Lombardi and Don Shula. He now produces films based upon their concepts of total commitment. He says,
. . . There are so many parallels in winning in sports and business. It’s hard to define this thing . . . It’s that burn . . . that pain . . . that itch . . . that hunger ... to succeed. It’s total commitment.
The record of the Miami Dolphins in winning game after game demonstrates that it is possible to maintain commitment over time.
Employees have been conditioned by experience to withhold commitment at work. The best leadership at the top cannot change them over night; but behavioral research shows the way to modify the work climate and develop a much greater commitment. What we should be striving for is a psychological contract, not just a job contract. Project management offers a much better opportunity for such change than traditional organizations, as we shall see.
Basic Concepts from Behavioral Research
In the 1950’s Chris Argyris began writing about the failure of “human relations” programs. He pointed out that there is a basic conflict between the needs of normal, mature individuals and the demands of the formal organization.3 Highly structured organization, increasing directive leadership, increasing management controls, and the fostering of internal competition produce responses from employees that bring about further repressive management controls. Argyris was criticizing management’s negative view of human performance.
Douglas McGregor expanded on this opinion with his Theory X and Theory Y propositions.4 In Theory X, management is responsible for getting the work done. People are indolent or resist work and management must pursuade, reward, and punish them. His Theory Y states that management is responsible for organizing resources. People are not basically passive; they have become so as a result of Theory X management. The motivation and potential for growth are latent in most people. Management’s job is to provide conditions so that people will direct their own efforts toward organizational objectives.
R. H. Schaffer, M Scott Myers and Frederick Herzberg have identified specific needs of workers which produce motivation. They did this by changing the work climate for experimental groups of workers in such companies as Texas Instruments, American Telephone & Telegraph, Imperial Chemicals, Ltd., a department store, and a government agency. Attitudes and productivity of the experimental groups were compared at the end of the experiment with those of the rest of the company or of other control groups. Gains in productivity of from 12% to 20% were reported.5
Herzberg has gone further and identified two classes of factors, “hygiene factors” and “motivators.” Hygiene factors such as physical work conditions or relationships with peers may produce dissatisfactions but do not motivate. Motivators such as opportunity for achievement, recognition of a job well doen, the character of the work itself, and opportunity for growth and advancement are guides for management action. Thus management may create a climate for motivation by enriching jobs in the following way:
1. Removing some controls while retaining accountability
2. Increasing the accountability of individuals for their own work
3. Giving a person a complete, natural unit of work (module, division, area, and so on)
4. Granting additional authority to an employee in his activity; job freedom
5. Making periodic reports directly available to the worker himself rather than to his supervisor
6. Introducing new and more difficult tasks not previously handled
7. Assigning individuals specific or specialized tasks, enabling them to become experts.
Applications in Project Management
Some of the problems in project management which lead to poor management of human resources and absence of motivation are:
1. A tight line-project organization structure with emphasis on power instead of motivation and leadership
2. A staff or matrix project-management organization structure where the worker is caught in power struggles among project managers and functional managers
3. Projects of short duration with rapidly changing work groups so that workers feel like unknown cogs in a complex machine
4. Project planning and control typically means that objectives are decided at the top and control rather than flexibility is designed into the project
5. Communication of ideas upward is not encouraged. Progress reports are demanded regularly and frequently by superiors as inputs to PERT programs.
Despite the traditional approach above and assumptions of project management, project work and organization offer unique opportunities for motivating people and securing their total commitment. Let us list these opportunities.
1. In many companies, payroll turnover is caused by lack of position turnover. In project organizations, new projects start up as old ones are completed. People who perform well on a project may be given recognition, opportunity for growth, and more challenging work on their next project. This contrasts with static organizations and permanent work assignments.
2. The people who are attracted to project-type organizations are usually those seeking opportunity rather than security. If management provides challenging opportunities, they are apt to respond affirmatively rather than resist change.
3. During the life of a project, the work assigned to a position usually changes. If management allows change in terms of job enrichment — increased vertical responsibility — the opportunity for growth will motivate the workers.
4. If management communicates regularly with all project workers as a group, encourages a strong team spirit and supports free cross-communications among workers, a total commitment to the project’s success may be realized.
5. Management By Objectives with worker participation in developing his changing objectives is facilitated by the nature of project definition.
6. Often, projects are developmental in nature and require considerable innovation. If management seeks and utilizes ideas from everyone in the project, then opportunities for recognition, challenge, and growth will be provided.
7. Projects often require task forces to handle problems that arise. This is because of tight scheduling and the developmental nature of the work. Task forces to solve tough problems allow management to provide variety, challenge, recognition, and growth as factors for increasing motivation.
8. The project manager as well as the other managers in line-project organizations have unique opportunities to put into practice the results of behavioral research. They are measured by their project’s progress and success in contrast to the traditional functional manager. The latter is usually restricted to stabilized bureaucratic procedures, methods, and behavior.
Projects have generally been managed as technical systems instead of behavioral systems. As s result, the rational/technical aspects of project management have been highly developed, while the equal or greater gains to be achieved from effective human resource management have not been realized.
Our object in this article has been to present the human resource system as an important part of the project. We have summarized a few of the results of behavioral research which are readily applicable to project management. We have then listed opportunities for applying this research to increase productivity in projects by 20-50%.
1 Marvin R. Weisbord, “What, Not Again! Manage People Better?” Think (IBM) January-February 1970.
2 Bruce N. Baker, Dalmar Fisher, and David C. Murphy, “Factors Affecting the Success of Project Management,” paper presented to the annual meeting of the Project Management Institute, Toronto, Canada, October 1973.
3 Chris Argyris, Personality and Organization: The Conflict Between System and the Individual, New York: Harper & Brothers, 1957.
4 Douglas M. McGregor, “The Human Side of Enterprise,” Management Review, November, 1957.
5 See, for example, William J. Paul, Jr., Keith B. Robertson, and Frederick Herzberg, “Job Enrichment Pays Off,” Harvard Business Review, March-April, 1969.