Retaining project managers--an empirical analysis of the antecedents to project manger's satisfaction and intention to quit

Abstract

Prior research has shown the importance of the project manager position for project success. Since organizations conduct more and more project-based undertakings, the demand for motivated, satisfied, and highly qualified project managers increases. Nevertheless, many project managers are unsatisfied and lack a feeling of support and recognition. Project managers consequently strive for positions in the line organization or even search for external opportunities. This induces a discrepancy between the demand and supply of project managers. However, there is little quantitative research about how different human resource management measures function in order to retain and satisfy project managers. Using a sample of 541 project managers and 135 portfolio coordinators nested in 135 firms, this study investigates how career paths and qualification opportunities for project managers affect project managers’ perceived support and how this is connected to their job satisfaction and their intention to quit. Integrating the project manager’s work environment, this study also analyzes the influence of the maturity of the project-oriented organization. The analysis shows that a valuable career path for project managers increases their perception of support and thus helps to retain and satisfy project managers—especially when it is accompanied by adequate qualification measures. Results further stress the significance of top management involvement and the support of project management offices (PMOs). Contrary to expectations, formalization of project portfolio management has a negative impact on perceived support.

Keywords: project manager retention; project manager job satisfaction; project-oriented organization; perceived organizational support; multi-level study

Extended Abstract

“Few individuals grow up with the dream of one day becoming a project manager” (Pinto & Kharbanda, 1995, p. 42). Since this quote from 1995 the project management profession developed quite rapidly as research, practice, and partly the educational systems recognized the importance of this management discipline. Nevertheless, the quote is still valid today. This is especially troublesome because the projectification of firms— in terms of conducting more and more project-based undertakings— is still an ongoing trend in many industries (Midler, 1995; Söderlund, 2005). The increasing number of projects requires an adequate provision with skilled project managers (Crawford, 2005). Hence, project managers are a critical resource for success (Ahsan, Ho, & Khan, 2013; Geoghegan & Dulewicz, 2008; Hauschildt, Keim, & Medcof, 2000) and an important management position in project-oriented firms (Bredin & Söderlund, 2013).

The organizational flexibility of a project-oriented organization and the temporary nature of projects lead to several specific implications for human resource management (hRM) in general and the project manager position in particular (Fabi & Pettersen, 1992; Hölzle, 2010; Huemann, Keegan, & Turner, 2007; Huemann, 2010; Pinto & Kharbanda, 1995). These challenges gained increasing prominence and attention in the last decade since researchers have been addressing the challenges of HRM in a dynamic project-oriented work environment (Huemann et al., 2007; Huemann, 2010; Söderlund & Bredin, 2006; Turner, Huemann, & Keegan, 2008). We can see an ongoing emphasis on human aspects of project management (Suhonen & Paasivaara, 2011) like career systems for project managers (Bredin & Söderlund, 2013; Hölzle, 2010; Turner et al., 2008), qualifications of project managers and competency guidelines for project management in different bodies of knowledge of corresponding institutes (Bredin & Söderlund, 2013; Crawford, 2005; Huemann & Turner, 2004; Morris, Crawford, Hodgson, Shepherd, & Thomas, 2006; Müller & Turner, 2010). The suggested human resource measures try to tackle the tension between the dynamics, flexibility, and instability of project work and the requirement to offer project managers perspectives and long-term competence development opportunities (Bredin, 2008).

Although project success depends on the performance of competent and highly committed project managers (Crawford, 2005; Hauschildt et al., 2000; Müller & Turner, 2010; Suhonen & Paasivaara, 2011), many firms fail to retain and develop project managers adequately (Hölzle, 2008). The retention of project managers is a special challenge since project managers by nature tend to maintain shorter tenures in certain positions or firms in general (El-Sabaa, 2001). Moreover, project managers frequently do not feel adequately respected and appreciated in their role in the organization and lack a feeling of acknowledgement, compensation, authority, power, and support for their work (Hölzle, 2010; Pinto & Kharbanda, 1995). Frequently, project managers lack a certain outline of their profession, a clearly defined job description (Hölzle, 2008), or as Pinto and Kharbanda) put it: “It is a neither well-defined nor a well-understood career path within most modern organizations” (1995, p. 42). These aspects lead to the serious problem for many project-oriented organizations in that they lack a sufficient number of competent and experienced project managers. Hence, retaining project managers becomes a critical issue for project-oriented organizations since their capabilities are a key source to sustain high performance and competitive advantage (Dong Liu, Mitchell, Lee, Holtom, & Hinkin, 2012; Maertz Jr., Griffeth, Campbell, & Allen, 2007). A certain degree of fluctuation is not preventable and may have its merits too (e.g., by integrating new knowledge and fostering innovation). But as it is more likely that high-performing employees with alternative opportunities will leave, fluctuation is likely to negatively affect future project and business performance (Holtom, Mitchell, Lee, & Eberly, 2008; Shaw, 2011; Trevor, 2001).

This raises the issue of which human resource (HR) measures should be taken to successfully increase project manager satisfaction and decrease their intention to leave. HR practices in general aim to support employees, and the perceived organizational support is often considered to be the mediating process by which HR practices impact more distal employee outcomes (Gavino, Wayne, & Erdogan, 2012).

This paper therefore addresses the following research questions:

Which are adequate measures to support project managers in their role?

Which are the influential factors to retain and satisfy project managers in their position?

Figure 1 depicts the underlying framework of this study. The mediated model suggests that a project manager’s satisfaction and his or her intention to quit project management are influenced by perceived organizational support. Providing perspectives through adequate human resource measures and the maturity of the project-oriented organization in turn affect perceived organizational support, and thus indirectly job satisfaction and intention to quit. For human resource measures we concentrate on giving project managers a long-term career perspective and enabling them to further develop their project management skills. The maturity of the project-oriented organization is captured using three representative constructs from project portfolio management research—the degree of formalization of the project portfolio management process, the support of a project management office, and finally the extent to which top managers are involved in project portfolio issues.

Research framework

Figure 1: Research framework

The results of our analysis show that perceived organizational support is significantly related to job satisfaction and intention to quit project management, which supports both hypothesis 1 and hypothesis 2. The overall model is significant and explains 24% of between-firm-variance in perceived organizational support. Contrary to hypothesis 3, there is no significant relationship between qualification and perceived organizational support. The existence of a valuable career path for project managers however is positively associated with perceived organizational support, reinforcing hypothesis 4. The three variables representing the maturity of the project-oriented organization are also significantly related to perceived organizational support. However, contrary to hypothesis 6, formalization has a negative influence. PMO support and top management involvement are both positively related and therefore support hypothesis 7 and 8, respectively. Hypothesis 5 suggested that qualification might positively moderate the influence of a career path on perceived organizational support. The coefficient of the interaction term is significantly positive, which supports the notion of a positive interaction effect. The overall model suggested that perceived organizational support mediates the effects of all independent variables on intention to quit project management and job satisfaction, respectively. We follow the procedure to test mediation proposed by Zhao, Lynch Jr., and Chen (2010) and evaluate indirect effects using a bootstrapping procedure. There are no significant direct effects; however, mediation analysis shows that all variables except qualification exert a significant indirect effect on both dependent variables, which supports mediation.

Since most of the studies on incentive systems investigate tangible incentives, are conceptual in nature, and do not consider the specifics of project work, the present study addresses an often neglected research field (Hölzle, 2008). This study showed quantitatively on a large scale that a comparable career path is appreciated by project managers and leads to an enhancement in the probability that they will further take on assignments as project managers. In this regard our results complement prior qualitative work of Hölzle (2010) or Bredin and Söderlund (2013). We could show that a career path for project managers is a possible human resource management practice to counteract the negative effects of project manager fluctuation. Practitioners may benefit from this result when promoting the implementation of a career path for project managers or trying to redesign the career system in order to make the path more acknowledged and appreciated compared to other career paths in the company. We additionally analyzed the combined effect of qualification opportunities and a career path and found a positive moderation effect. Aligned qualification programs create the perception that it is the project manager’s own decision and chance to be prepared for the challenges of more complex, important, and larger projects. Such a qualification program enables project managers to completely exploit the potential of a formal career path for their own career progress.

Hence, following our empirical results, we advise practitioners in project-oriented organizations to implement a career path for project managers and to simultaneously align the qualification programs to the different career stages, depending on the competences needed for differently classified projects. Contrary to our hypothesis, we found a negative effect of project portfolio management formalization on project managers’ perceived support. The controversial discussion on the merits of formalization might offer some explanations for this surprising result. Project managers are typically characterized by a higher degree of self-confidence and intrinsic motivation than other employees and are generally forced to work independently since projects are outsourced as separate units (Gällstedt, 2003). An over-bureaucratic work environment might limit the possibilities for project managers to manage projects independently. Their work will be affected by decisions regarding other projects that lie outside their own sphere of influence. This might lead to dissatisfaction and a feeling of inequity. Moreover, regarding portfolio management, project managers might appreciate a more informal decision making process. In this situation, they probably have a better opportunity to influence the decisions on a portfolio level. Formalization goes along with clear rules and responsibilities regarding portfolio decisions, and the responsibilities are rather assigned to line managers, special portfolio managers or top managers, than to project managers (Jonas, 2010). Without doubt, formalization, especially in project-oriented organizations with several projects running in parallel, has its benefits (Teller, Unger, Kock, & Gemünden, 2012). Nevertheless, it is important for practitioners to be aware of the downsides and to be able to counteract against these effects in order to ensure the management flexibility and influence project managers value and need. Furthermore, we found a positive impact of PMO support on perceived organizational support of project managers. Therefore the study contributes to research addressing the benefits of PMOs. Since literature has related a multitude of tasks to PMOs, this finding is highly dependent on how the PMO responsibilities are defined. We concentrate on three support functions of a PMO: supporting project managers, supporting portfolio management, and supporting senior management. It is a valuable insight for practitioners regarding the design of PMOs since they should concentrate on these functions in order to clearly support, satisfy, and retain project managers. Finally, the results show empirically that top management involvement in project portfolio management is perceived as supportive by project managers. Since top managers are involved in portfolio management issues and not directly project issues, this relationship is notable. Senior management involvement in a specific task is an expensive investment since the time of top managers is scarce and costly. Project managers recognize this investment of the organization. Top management involvement symbolizes an acknowledgement of the organization that issues regarding the project manager’s work environment are of high priority. This improves the image and standing of project managers in the organization. Consequently, it is more valuable for project managers to remain in project management and to strive for higher positions in this management profession. In addition, senior management involvement can strengthen the project manager’s position in resource negotiations with line managers. The study demonstrated from an organizational behavior perspective, the need to endow top managers with portfolio management responsibilities and enough time to execute the corresponding tasks. Practitioners in project-oriented organizations can use these results in order to define the task areas of higher management levels and to promote portfolio management as an important management activity for senior managers.

References

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Appendix: Item Wordings

Project Manager Constructs

Intention to Quit (Cronbach’s α = 0.75)

I often think about quitting my job as a project manager.

It is likely that within the next year I will actively look for another job in this company.

The project manager position is only a transit station for me.

Job Satisfaction (α = 0.78)

All in all, I am satisfied with my job as a project manager.

In general, I do not like my job as a project manager.

In general, I like working here as a project manager.

Perceived Organizational Support (α = 0.73)

The company values my contribution to its well-being.

The company fails to appreciate any extra effort from me.

The company provides me little opportunity to move up the ranks.

The company wishes to give me the best possible project for which I am qualified.

The company tries to make my job as interesting as possible.

Success of Previous Project (α = 0.79)

My last project was completed with a high degree of schedule adherence.

My last project was completed with a high degree of budget adherence.

My last project has met the defined specifications.

My last project was completed with high customer satisfaction.

Project Management Experience

Please indicate how long you have been working as a project manager.

Project Management Competence (α = 0.85)

I am confident about my ability to do my job as a project manager.

I am self-assured about my capabilities to perform my work activities as a project manager.

I have mastered the skills necessary for my job as a project manager.

Coordinator Constructs

Qualification Opportunities for Project Managers (α = 0.80)

Our project managers regularly make use of special training for project management.

The training courses for project managers are aligned with their career stage.

Our project managers receive certifications in the training courses.

Project managers make use of mentoring programs.

Career Path for Project Managers (α = 0.87)

There are clear career paths for project managers in our company.

With increasing experience of project managers, they are assigned to more challenging and complex projects.

There are distinct “job titles” for project managers (e.g. project manager to senior project manager or project director) in our company, reflecting experience and competences.

In higher career levels project managers have more budget and staff responsibility.

The average stay of project managers on a certain career level is comparable to that of managers in the line organization.

Project managers have comparable salary levels as managers in line organization.

The project manager career path is an adequate alternative to the career path in line organization.

PPM Formalization (α = 0.93)

Essential project decisions are made within clearly defined portfolio meetings.

Our project portfolio management process is divided in clearly defined phases.

Our process for project portfolio management is clearly specified.

Overall we execute our project portfolio management process very well structured.

PMO Support (α = 0.75)

The PMO strongly supports cross-project co-ordination.

The PMO provides intense governance support to the top management (e.g., project supervision, milestone controlling, monitoring, and standardization).

The PMO provides intense service support to projects/project leaders (e.g., during project planning, in the production of reports for projects, software tools).

Top Management Involvement (α = 0.84)

Top management invests a lot of time in steering the project portfolio.

Top management adhere to their own rules of multi-project management.

Top management delivers timely decisions when problem situations arise and reacts promptly to escalations.

Top management knows the substantive topic of multi-project and project portfolio management well.

Portfolio Complexity (α = 0.82)

A high degree of alignment between our projects is required with respect to the scopes.

Scope changes of individual projects inevitably impact on the execution of other projects.

Often projects can only be continued if the results of other projects are available.

Delays in individual projects inevitably impact on other projects.

Number of Parallel Projects

How many projects, on average, does a project manager lead at the same time?

Bastian Ekrot studied industrial engineering and management at the Technische Universität in Berlin with an emphasis on automobile technology, marketing, and innovation management. Since February 2012, he has been a research assistant and doctoral candidate at the chair of technology and innovation management of Professor Gemünden at the Technische Universität Berlin. He is responsible for lectures and seminars in technology management and project management. His main focus in research is human resource management and competence management in the context of project-oriented organizations.

Alexander Kock is a professor of technology and innovation management at Technische Universität Darmstadt, Germany and holds a diploma in business engineering and a doctorate in business administration from Berlin Institute of Technology. His research interests cover project portfolio management and organizational issues of innovation management and his work has been published in various journals, including Journal of Product Innovation Management, IEEE Transactions on Engineering Management, International Journal of Project Management and Project Management Journal.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

©2014 Project Management Institute Research and Education Conference

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