CHAPTER ONE

INTRODUCTION
1.1. Background of the study
Management is a set of goal-directed, interrelated and interdependent activities, aimed at
accomplishing organizational goals in an efficient and effective manner. Managerial activities
consist of what is known to be the functions of management: planning, organizing, directing, and
controlling. [2]

Human resources are nothing but the personals working in the organizations for achieving the
goals of the business and earning benefits for themselves for their survivals or for their specific
purpose. They may be skilled, semi-skilled or may be unskilled. In every type of business, the
key work has to be carried out by the personnel working within the organization. Employees are
largely a factor of production of any organization, whether it is construction or manufacturing. [4]

Human resource is required for an organization to conduct different business activities. Without
the support of human resource, the organization cannot exist or operate effectively. The success
Of any organization depends on the effective use of human resources. [5] Overall quality of HRM
can affect a range of issues, and in the context of construction, poor employment relations may
have an impact upon levels of work quality, innovation, project delays, and corporate reputation.
[6]
Human resources are the major risky to manage the construction field, as they are not mostly
permanent like other industries. They may change from project to project, place to place, time to
time and also with respect to the type of work.
Human Resource Management (HRM) is the process of managing people in a company or firm
as well as managing the existing interpersonal relationships. These two processes are keys in the
success and growth of a business. Human resource management is the management process of an
organization's workforce, or human resources.[2] It is responsible for the motivation, attraction,
selection, training, assessment, compensation, attending to their labor relations, health and safety,
and fairness concerns and rewarding of employees, while also overseeing organizational
leadership and culture and ensuring compliance with employment and labor laws.[7] A manager
is the person responsible for accomplishing the organizations goals, who does so by managing
the efforts of the organizations people. [1]
Most experts agree that managing involves five functions: planning, organizing, staffing,
leading, and controlling. In total, these functions represent the management process. Some of the
specific activities involved in each function include:

Planning:-Establishing goals and standards; developing rules and procedures; developing

plans and forecasting.
Organizing:-Giving each subordinate a specific task; establishing departments;
delegating authority to subordinates; establishing channels of authority and
communication; coordinating subordinates work.
Staffing:-Determining what type of people you should hire; recruiting prospective
employees; selecting employees; training and developing employees; setting performance
standards; evaluating performance; counseling employees; compensating employees.
Leading:-Getting others to get the job done; maintaining morale; motivating
subordinates.
Controlling:-Setting standards such as sales quotas, quality standards, or production
levels; checking to see how actual performance compares with these standards; taking
corrective action as needed.

1.2. Statement of the problem

The ability to attract, retain and develop talented employees is a key feature of successful
businesses. People are an organization’s most valuable asset and this is especially true in
relatively low-tech, labor-intensive industries such as construction. However, people also
represent the most difficult resource for organizations to manage. Unlike physical assets, people
have their own individual needs which must be met and idiosyncrasies which must be managed
if they are to contribute to organizational growth and development. People are individuals who
bring their own perspectives, values and attributes to organizational life, and, when managed
effectively, these human traits can bring considerable benefits to organizations [3].

However, when HRM managed poorly they have the potential to severely limit organizational
growth and threaten the viability of a business. There are countless examples of corporate and
project crises in the construction sector which have arisen as the result of people's behavior, and
it would seem that human resource management (HRM) has the potential to eliminate more
construction risks than any other management approach (Loosemore, 2000).
As recent researches, HRM problem in Ethiopia construction project shows the influence of
HRM and its effect largely vested at the three targets of projects i.e. cost, time and quality, all
companies must consider and assure the application of HRM since the planning phase.

The above mentioned literatures and research show that HRM has the key role in building
Construction Company. For this reason, today, companies must put a lot of effort and energy into
setting up a strong and effective human resource management. Therefore, this thesis focuses to
find major factor affecting of human resource management in the building construction in case of
Aksum town.

1.3. Research objective

Based on the problem stated, the research will be carried out in the view of achieving the
following objectives.
1.3.1. General Objective
The objective of this research is to assess the Human Resource Management practices in Aksum
construction industry. This research mainly aims to investigate important factors affecting
Human Resource Management system in building construction projects. Understanding these
factors is helpful for the construction professionals in order to efficiently deliver the project as
per the plan. Hence, the main goal of the study is to provide essential information about factors
affecting HRM to construction professionals to enable the project’s to be successful. This study
can also be used by other researchers as an input for further studies related to human resource
management system on construction projects.
1.3.2. Specific Objectives
 To identify the existing good practice of Human Resource Management in building
construction the case of Aksum city.
 Ranking of Factor affecting HRM in building construction project based on severity
index.
 To examine the interest of workers and the management system to improve their ways of
doing in human resource management.
 To suggest possible remedies towards the problems and challenges.
1.4. Research questions
The questions to be answered from the research are:-
1. What were the good practices of each firm in their day to day HRM in building construction
project?
2. How did the interest of workers and management to improve their ways of doing in HRM in
the building construction firm?
3. Employees’ ideas with existing HRM practice?
4. What will be the components of Factor affecting HRM in Building construction project?
1.5. Scope and limitation of the study
The scope of this research is limited to the study of factors affecting human resources
management on building construction projects. Poor human resources management affects all
contractors of different class and category. Then research topic is wide enough to be dealt with
detailed challenges and problems in the sector.
However, the researcher’s will focus is only on building construction companies and projects due
to the fact that construction of buildings uses much human resource with various positions.
On the other hand grade three and above building & general contractors will be selected by
taking in to consideration these contractors have more experience on many projects related to the
study area. Besides building projects located in Aksum which are under taking by grade three
and above contractors are the targeted projects of the study.
As it is studied by different researches most of construction projects fails to be completed within
the contract time, quality and budgeted cost. Poor human resource management is one of the
reasons for delay, poor quality and cost over run for the construction projects. Thus, this research
will study mainly the critical factors which affect human resource management on building
projects.
1.6. Significance and Application of the Research
Human resource management has a great significance in the construction industry. In the
construction industry, many external and internal factors are never constant and are difficult to
anticipate. This factor leads to a continuous effect in Human resource management system. It is
necessary to bear in mind that a poor human resource management system affects the schedule of
the work and causes delays. The consequences of these delays and poor work schedule could
result in serious money losses. Further, considerable cost can be saved if human resource
management system is improved because the work can be done with effetely and sufficiently
manpower, thus reducing overall manpower cost [8].
Improving human resource management system in the construction industry has benefits to the
two Contracting parties; the Client and the Contractor of the project. From the Clients’
perspective, increased productivity lowers costs, shortens construction schedules and achieves
better returns on investments. From the contractor’s perspective, good HRM system leads to a
more satisfied customer, faster turnover and increased profits.
1.7. Organization of the study
This thesis will be organized with major five chapters. The first chapter describes the basic
research information as an introduction part of the research. The second chapter will covers the
basic literature review on human resource management related issues to make up the conceptual
framework of the study. The third part covers the Research design and methodology. Analyses of
findings and discussion on the basis of results will be present in the fourth part. The last part will
be consisting of the conclusions made and recommendations forwarded.
 CHAPTER THREE
RESEARCH METHODOLOGY
3.1. Research strategy
The study aims to assess the practice of human resource management system on building
construction projects, mainly focuses to investigate critical factors affecting human resource
management in building construction projects and rank the factors according to their frequency
of occurrence, level of impact and the combination of the two. Different literatures related to this
research will be review, and in order to see the building construction practices in Aksum city the
following research methodology will be implementing. Therefore the actual data will collect and
analyze to find the actual practices in relation to HRM and the critical factors affecting HRM in
building construction projects.
The nature of the research is both qualitative and quantitative because of some of the data
collected is in descriptive form while the others of the data are in numeric form.
3.2. Population
The population for this research will be the Employers and Employee who participates on
Building construction projects in Aksum town.
3.3. Sample size
The sample will select using Judgmental or Purposive sampling method. Based on this sample
the construction company will be selected. Grade three and above contractors will be selected by
taking in to consideration these contractors have more experience related to the study area. The
sample Tries to make the sample representative, depending on his opinion or purpose, or they
think would be appropriate for the study. Thus being the Representation subjective. The target
groups in this study are Employer and Employee. The respondents will be projects managers, site
engineers, consultant group, office engineers, human resource administration staffs, daily labors
and interested groups as they have a practical experience in building construction industries field.
Their sufficient experiences are a suitable indication to find out the perceptive of the relative
importance of project performance indicators of the owner, consultant and contractor parties.
3.4. Methods of data collections
The researchers will be collect data from both primary and secondary source. The primary data’s
will be observation by direct contact. Secondary data will be collect from different construction
companies by questionnaires, reading documents, supervisors, contractors, foreman, owner and
other stakeholders.
In the thesis, methods of data collection will include Literature study, questionnaire and
observation. The data collection methods to be adopted in conducting the research are:-
3.4.1. Literature study
A full literature study is part of the research process itself. Such a literature review demonstrates
that a researcher is knowledgeable of the area under investigation, shows how previous research
studies support the current one and generate new research ideas through discovering what was
left behind by others. The literatures will be compiled mainly from textbooks, journals, thesis
and dissertations. These references are reliable sources of information and referenced in precise
reporting.
3.4.2. Questionnaire design
The questionnaire will be design based on the fact that they had to be simple, clear and
understandable for the respondents and at the same time they would be able to be interpreted
well by the researcher. The questionnaires will contain both close and open ended questions. The
close ended questions will had a number of choices of possible answers and the respondents
selected whatever they feel was most appropriate. The closed ended questions will be select
because they are easier to answer and assess. Open ended questions will be use only in few
places where the response options were relatively wide.
These questionnaires will be design with the description different level of scale for employee
(1=strong disagree,2=disagree,3=neutral,4= agree, 5=strongly agree) and for employer(1= very
low, 2= low,3=medium,4=high, 5= very high).The questionnaires will be structured to focus on
the practice and applicability of HRM in the building construction sector and to measure the
outcomes according to our country context. Moreover, their opinion and what should have to be
done to get the expected outcome.
Then after the initial prevalent, questionnaires will be design for different employers and
employees. These questionnaires will be distributed with preamble on the topic as objective of
the research.
The questionnaire contains three sections.
Section A: Profile of the company.
Section B: Conception of company towards to Human resource management methods.
Section C: Factors affecting Human resource management problems in construction projects.

3.4.3. Observation
The researcher will be made sites visit in Aksum city construction projects and will take sample
measurement that used to identify the factors affects human resource management problems,
taken the variables that are cited in the literature review to prevalent factors that affects human
resource management problems.
3.5. Data Analysis Method