Hiring, training, developing, rewarding, and measuring project personnel

goodbye, HR--hello, PMO ; a PMI Congress discussion forum

Abstract

Ever felt that HR didn’t “get it” when hiring, training, or rewarding project personnel? New PMO roles that transfer crucial HR tasks to project-savvy people are on the rise. This paper provides background for the forthcoming discussion form on PMHR in the PMO, to take place at the 2007 PMI Congress. Audience members will share their PMHR issues and practices in an interactive facilitated discussion; we will attempt to capture their thoughts and share the results post-Congress.

Introduction

Something’s happening here … as the old song says. Two functions long divided into separate (and often warring) silos seem to be merging, blurring roles, responsibilities and areas of expertise. While HR is increasingly turning to PM for expertise in systems implementations, and even implementing HR PMOs, PMOs on the other hand, are taking over “people management” roles that once were the purview of HR. This is a good thing, as it promises to reduce friction, yield better qualified project teams and managers, and relieve HR of tasks that it is ill-prepared to carry out.

Old-Time HR; Brand-New Organizations

As two realities of the modern marketplace converge—projects as the engines of growth, and people as the engine of projects—we find our traditional methods of dealing with human resource issues becoming dated. The old economy view of “employees as a cost center to be rigidly contained” is incompatible with the knowledge economy. What can replace it? Experience on projects has shown us that:

  1. Management by projects has the potential to be a winning strategy for most, if not all, organizations, but
  2. The ability of project managers and team members to do their best is often constrained by organizational models and structures not suited to the project environment.

In a shift that has been compared to the Industrial Revolution in terms of its far-reaching consequences, the majority of workers, from entry-level service jobs to professionals, have moved from concrete tasks based on making things, to more abstract work based on thinking problems through and designing solutions. This paradigm shift changes everything, and business is still grappling with the fallout. How to educate, recruit, reward, manage, and retain the knowledge worker is a subject that fills volumes. Concepts like self-managing teams, the community of practice, pay-for-performance, intangible rewards, and intrinsic motivation are all outgrowths of our economy’s shift from what has been termed a “make-and-sell” orientation to a “sense-and-respond” model. Make-and-sell, an industrialage model based on capital assets and mass production, contrasts sharply with the sense-and-respond informationand service-age model, which emphasizes relationships and intellectual assets (Haeckel, 2003).

Over the past decade, businesses have paid a lot of lip service to the idea that “people are our greatest asset.” Yet actual human resource practices often lag far behind the current ideas to which people ascribe. It’s not unusual for a CEO to say he wants greater engagement and passion from employees, while the organization pursues a cost-cutting initiative that replaces the most engaged workers with a cheaper alternative. Projects are often high-profile, while the people who make them happen remain stuck in split roles, their performance judged on functional metrics unrelated to project success.

Most HR professionals care about people—that’s why they pursue this discipline. But often their best intentions are undercut by organizational structure and policies unsuited to the project- and knowledge-based organizations. The status quo structures and policies of organizations lag behind the ideas held by many of the people that comprise them. In many companies, knowledge workers—the majority of them also project team members—continue to be managed and rewarded as though they were units of labor on an assembly line. There’s a lot of HR-blaming that goes on as a result—just look at the hundreds of responses to Fast Company’s 2005 article “Why I Hate HR” posted on the magazine’s website (Hammond, 2005). But it isn’t really HR’s fault. When human resources are not treated as a strategic resource, that mistake is made at the level of strategy—not at the level of a particular function. Companies continue to try to measure the value of knowledge work as though it were the same as widget manufacture. They use industrial-era models to measure corporate performance. They focus on tweaking operations and “automating the cowpath” while ignoring the breakthrough projects and new competencies that are central to future success. When these antiquated policies fail, companies still act as though labor were nothing but a cost center, and try to downsize their way to greatness.

Yet, there is a vast amount of research to support the notion that truly acting as though people are the greatest asset brings significant bottom-line rewards. As just one example, human resource research firm Watson Wyatt’s Human Capital Index (HCI) demonstrates the link between workforce-management practices and financial results (Watson Wyatt, 2007). And research specifically on more projectized companies also points to the fact that implementing the right HR practices, in the right way, makes a tangible difference in project and organizational success (Center for Business Practices, 2007; Sauer, Liu, & Johnston, 2001).

Managing by Projects: An HR Best Practice

The HCI broke ground when it established a correlation between a company’s human capital practices and corporate profitability. The practices with the strongest links to financial success fall under what the report terms “Communications Integrity and Value Creation.” These include easy access to technologies for communicating and employee input into how work gets done. Other high-payoff practices are those that create a “Collegial, Flexible Workplace.” In this area, more project-oriented organizations have the advantage, since the management of projects is founded on some of the high-value practices noted in the HCI, such as a culture that encourages teamwork. Other research has identified project-friendly HR practices within the research and development field:

  • Design work arrangements to provide sustained opportunities for interesting work; for example, through job rotation.
  • Provide training and development to build new competencies or to broaden business knowledge or managerial skills.
  • Employ HR practices that reflect concern for individual employees such as employee participation, community building (such as via a community of practice), and lifestyle accommodations.
  • In recruiting posture, focus influencing the “joining behavior” of knowledge professionals, who prefer collegial, team-based workplaces (Crawford and Cabanis-Brewin, 2005, p. xxx).

Organizing the enterprise around projects can also contribute to solving some thorny people management problems. Projects, due to their temporary and unique nature, provide the “zest factors” that drive high performance on a more consistent basis than an operations management setting is able to provide. These factors include:

  • A clear challenge
  • A specific goal
  • A sense of urgency
  • A sense of teamwork
  • Cooperative action that crosses boundaries
  • The pressure of necessity
  • Flexibility in work arrangements that creates innovation and new leaders (Neiman, 2004, p. 154).

Organizing work into short-term initiatives (projects) with goals, deadlines, and achievable visions, keeps the “zest factor” current. Because projects are performed by teams, it also facilitates knowledge creation and transfer. When project managers and teams work within an organizational system that supports the project paradigm, the resulting work environment is one that energizes people, achieves goals, and promotes flexible responses to organizational challenges and opportunities.

In both IT and R&D, significant amounts of research scholarship exist to show the importance of both human factors and project-based work in the management of knowledge professionals. Like many project team members and project managers from every discipline, scientists and engineers solve problems, find information, and discover relationships among phenomena that may lead to the development of new products, services and processes. As time-to-market and project cycle time reduction have grown more critical than before, intellectual capital development is increasingly being treated as a core competency; teamwork has become widespread, and the emphasis has changed from commanding and controlling people to leading them. About 75 percent of R&D laboratories now rely on cross-functional teams for new product development; one advantage of these teams is that they increase quality of work life (James, 2002).

Some surprising, not-so-obvious HR and business effects can result from project management activities. For example, consider the roles of project management leaders in communicating the costs of IT to top management. Where project management activities are performed well, the workload is better balanced among IT professionals, resulting in a greater sense of equity; there is also a greater sense of accomplishment, and better morale leads to more open communication with management, a key issue in the formation of trust. Since trust between IT and senior leadership plays a role in the accuracy of estimates and the rationality of resource allocation, the costs of IT are communicated better and projects are either funded at appropriate levels or the demand for IT services are better matched with available resources. Thus the lowered stress level within the IT work force is less likely to lead to burnout—and its expensive twin, turnover (Crawford & Cabanis-Brewin, 2005, p. xxix). This finding was supported by a 2000 study, which found that implementing project management improvement initiatives improved seven HR metrics (including things like employee satisfaction, empowerment, productivity, and turnover) an average of 27% for the reporting companies (Pennypacker, 2002, p. 85).

HR in the PMO: An Emerging Best Practice

New research on trends in the PMO reveals that top-performing companies (as measured by a battery of eight project and organizational performance metrics) are those that implement enterprise PMOs, and pull into the PMO a number of roles and responsibilities related to human resource management. For instance, the top performers in the study, far more frequently than low-performing companies, perform resource identification, develop processes for assigning resources,manage a staff of project planners and controllers within the PMO, and do their own training, professional development, and performance evaluations. Among the Top Ten PMO functions, according to the study, coaching and mentoring project managers ranked third, with 81% of the responding PMOs performing this function (Center for Business Practices, 2007, p. 6).

One way to empower people is to remove the barriers that keep them from succeeding. These barriers are generally structural: functional silos, chains of command, restrictive job descriptions, cultures that hoard information and power rather than sharing it, incentives that inadvertently reward the wrong behaviors. In the project management field, these barriers are more visible than they perhaps are to people working in more operational jobs within functional areas, because project managers and teams are by nature “boundary spanners” who operate outside the usual organizational hierarchy. In this, project management is a natural ally with HR. After all, people reside everywhere in the organization … and so do projects.

What Project Leaders Say

Action research from the Center for Business Practices, conducted twice a year at benchmarking events, collects data about how projects actually get done in organizations. At Benchmarking Forums in 2006, participants—high-ranking project management leaders in their organizations—discussed human resource challenges on their projects and in their organizations. When asked to list their biggest challenges, they readily supplied a lengthy catalog. In addition, they identified best practices for addressing those challenges. Their insights are summarized in Exhibit 1.

Challenges and Best Practices in PMHR

Exhibit 1. Challenges and Best Practices in PMHR.
These statements were recorded from practitioners during Benchmarking Forum roundtable sessions in June and Sept. 2006 focusing on human resource management issues (Center for Business Practices, 2006).

Facilitated Discussion Forum

One of the problems for improving project management practice in organizations is the paucity of usable research. Many forces conspire to make data hard to find when it comes to the ins and outs of project management in practice—the quickly changing business environment; for-profit companies’ reluctance to share intellectual capital (or confess to problems on projects), and the “accidental” nature of the discipline. Thus many project managers struggle along, never knowing that problems similar to the ones they face have been addressed successfully in other organizations. At the Center for Business Practices, we are firm believers in action research: that is, collecting data from the “boots on the ground.” At our Benchmarking Forums, we facilitate best-practice sharing around issues of common interest to project management leaders. Interactive, facilitated discussion of participants’ current problems and solutions can be extremely enlightening and result in practical take-aways that participants can put immediately into practice on the job. At the Global Congress session, we will attempt to reproduce such a best-practice sharing environment (albeit on a larger scale, given the usual number of attendees in the room). As at the Benchmarking Forums, the results from this discussion will be compiled and emailed to all participants, or posted with the slides on the PMI website (if possible). Exhibit 2 shows the worksheet that will be used in the session; please print a copy to bring with you. You may want to think about the items in the issue/task column ahead of time and jot down a few notes. There will also be a handout available in the presentation room.

Worksheet for Facilitated Forum Discussion with Congress Attendees

Exhibit 2. Worksheet for Facilitated Forum Discussion with Congress Attendees

References

Center for Business Practices. (2007) The State of the PMO 2007. Havertown, PA: Center for Business Practices.

Center for Business Practices. (2006, Sept.) Government Project Management Benchmarking Forum: Results from Break-Out Sessions - Roundtable 1: People on Projects. Washington, DC.

Center for Business Practices. (2006, June.) Project Management Benchmarking Forum on the Project Office: Results from Break-Out Sessions - Roundtable 1: Resource Management. Philadelphia, PA.

Crawford, J. K. & Cabanis-Brewin, J. (2005) Optimizing Human Capital with A Strategic Project Office. Boca Raton, FL: Auerbach Books.

James, W. M. (2002) Best HR Practices for Today’s Innovation Management, Research Technology Management, January-February: pp.57-60.

Haeckel, S. H. (2003) How to Create and Lead an Adaptive Organization. CIO Insight, July 17, 2003. Accessed June 20, 2007 at http://www.cioinsight.com/article2/0,3959,1193225,00.asp

Hammonds, K.H. (2005, Aug.) Why We Hate HR. Fast Company online edition. Accessed June 20, 2007 at http://www.fastcompany.com/magazine/97/open_hr.html

Neiman, R. (2004) Execution Plain and Simple: Twelve Steps to Achieving Any Goal on Time and On Budget. New York: McGraw-Hill.

Pennypacker, J.S. (2002) Justifying the Value of Project Management. Havertown, PA: Center for Business Practices.

Sauer, C., Liu, L.I., & Johnston, K. (2001, Dec.) Where project managers are kings. Project Management Journal 132 (4) 31-37.

Watson Wyatt, Inc. (2007) The Human Capital Index. Retrieved on June 15, 2007 from http://www.watsonwyatt.com/research/resrender.asp?id=w-488&page=1

©2007 Jeannette Cabanis-Brewin
Originally published as part of proceedings PMI Global Congress 2007 – Atlanta, GA

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