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Managing human resources in the project-based organization

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INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 25 (2007) 315–323
www.elsevier.com/locate/ijproman

Human resource management in the project-oriented company:


A review
a,* b,1 c,2
Martina Huemann , Anne Keegan , J. Rodney Turner
a
Project Management Group, Vienna University of Economics and Business Administration, Franz Klein Gasse 1, A-1190 Vienna, Austria
b
Amsterdam Business School, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands
c
Groupe ESC Lille, Avenue WillyBrandt, F59777 Euralille, France

Received 21 March 2006; received in revised form 18 August 2006; accepted 3 October 2006

Abstract

Human resource management (HRM) can be viewed as core processes of the project-oriented company, affecting the way the orga-
nization acquires and uses human resources, and how employees experience the employment relationship. Knowledge about HRM is
produced by researchers and theorists who, through publishing their work in books and journals, construct knowledge in particular ways
and in so doing frame the way HRM debates take shape in the academic and practitioner literatures. In most of the extant literature
HRM is framed primarily in terms of large, stable organisations, while other organisational types, such as, those relying on projects
as the principle form of work design, are marginalised in discussions about what HRM is and how it should be practiced. The authors
argue that due to specific characteristics of the project-oriented company, particularly the temporary nature of the work processes and
dynamic nature of the work environment, there exist specific challenges for both organisations and employees for HRM in project-ori-
ented companies, and that these have – been neither widely acknowledged nor adequately conceptualised in the extant mainstream HRM
or project management literatures. The aim of this paper is to provide an overview of past research on HRM in the context of projects,
published in the project management, general management, and HRM literatures. We develop a model of what we see as the critical
HRM aspects of project-oriented organizing, based on prior research and use it to structure the review. Finally we summarize what
we see as the major shortcomings of research in the field of HRM in the project-oriented company and outline a research agenda to
address outstanding areas of research on this topic.
Ó 2006 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Project-oriented company; Managing of projects; Managing by projects; Human resource management

1. Introduction fore important in any organization [6]. The project-oriented


company is no different in this regard. However, we suggest
Human Resource Management (HRM) is of strategic that specific features of the project-oriented company create
importance in all organizations. It contributes to the success specific challenges for HRM in that context, which are not
of the organization [1] and creates competitive advantage widely recognized in the general management, HRM or
for the organization [2,3]. The way HRM practices and pol- project management (PM) literatures. This paper reviews
icies take shape also affects the employee’s experiences of literature in the project management, general management
work and the employment relationship [4,5]. HRM is there- and mainstream HRM literatures.
Our basic assumption is that project-oriented companies
do have specific requirements regarding HRM. Yet
*
Corresponding author. Tel.: +43 1 4277 29405; fax: +43 1 3687510. research in this field is limited. We have examined the
E-mail addresses: martina.huemann@wu-wien.ac.at (M. Huemann),
a.e.keegan@uva.nl (A. Keegan), jr.turner@esc-lille.fr (J.R. Turner).
extant literature in the project management, general man-
1
Tel.: +31 20 525 5499; fax: +31 20 525 5092. agement and HRM literatures to underpin our assump-
2
Tel.: +33 3 2021 5972; fax: +33 3 2021 5974. tions and thoroughly review the extant literature on the

0263-7863/$30.00 Ó 2006 Elsevier Ltd and IPMA. All rights reserved.


doi:10.1016/j.ijproman.2006.10.001
316 M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323

topic of HRM in project-oriented companies. The reviewed the stable line organization and the temporary organiza-
journals include: tions, carried out in the project-oriented company. Thus
the project-oriented company is a construct. An organiza-
 in the Project Management literature: International tion may choose that project-orientation is the adequate
Journal of Project Management, Project Management working form for them as a whole (as in a construction
Journal, Construction Management and Economics, Engi- company) or only for some of their organizational units
neering, Construction and Architecture Management, (as in the product development department of a manufac-
IEEE Transactions in Engineering Management, Journal turing company, or the organizational development unit of
of Management in Engineering; a municipality).
 in the General Management literature: Administrative Some writers have identified some specifics of HRM in
Science Quarterly, Academy of Management Journal, companies that carry out projects [7,10]. These studies sup-
Academy of Management Review, Journal of Manage- port the assumption that the project-oriented company has
ment Studies, Organization Studies, Organization; specific features that in turn produce special requirements
 in the HRM literature: Human Resource Management, in terms of HRM policies and practices. Some specific fea-
Human Resource Management Journal, International tures of project-oriented companies which we see relevant
Journal of Human Resource Management and Personnel for HRM are
Review; Human Resource Planning. Employee Relations.
 ‘‘Managing by projects’’ as the strategy of the project-
In the next section we provide arguments for why we oriented company.
think that there are specific requirements regarding HRM  Temporary nature of projects.
in the project-oriented company. We then report the gen-  Dynamism.
eral findings of our literature search into HRM in pro-  Project-portfolio resource and multirole demands.
ject-oriented companies as published in leading journals.  Specific management paradigm.
Then we introduce a simple model of HRM which is based
on prior research [7]. The model serves as the structure for
the remainder of the review. We finally conclude with a 2.1. ‘‘Managing by projects’’ as the strategy of the project
future research agenda. oriented company

2. Specific requirements for HRM in the project-oriented Within the mainstream HRM literature, there is a long
company tradition of research arguing that in order to make an
optimal contribution to firm performance, HRM policies
Gareis [8,9] suggests that project-oriented companies are and practices should be integrated both with firm strat-
ones in which the people of the organization: egy, so-called vertical strategic integration [11] and with
each other, so-called horizontal integration [2]. The orien-
1. define ‘‘management by projects’’ as their organizational tation of the HRM function, its goals and aims, need to
strategy; be aligned with the strategy of the organization [12]. If
2. apply projects and programs for the performance of we consider ‘‘managing by projects’’ as the strategy of
complex processes; the project-oriented company [8] this would imply that
3. manage a project portfolio of different internal and the HRM policies, processes, and practices in the pro-
external project types; ject-oriented company are in some way supportive of pro-
4. have specific permanent organizations like a project ject-oriented working and are different from more
portfolio group, or a PM office to provide integrative traditional HRM processes and practices [13] which are
functions; designed for the classically-managed organization where
5. view the organization as being project-oriented. the emphasis is not on projects but instead on routine
products and services and where the job requirements
The ideal project-oriented company is often described as are well defined and stable [14].
a flat organization with a strong project management cul-
ture. In essence, what defines a company as project-ori- 2.2. Temporary nature of projects
ented is that these companies perceive themselves as
being project-oriented and shape their policies and prac- Projects and programs are temporary organizations
tices for working, for organizational culture and for strat- [9,15,16]. Thus every time a new project or program is
egy towards the challenge presented by managing projects. started, the human resource configuration of the organiza-
Project-oriented companies may be found in many different tion must change. This might create pressure. It certainly
industries including the public sector. Organizations can impacts the work organization, and creates the need for
vary in the degree of their project-orientation, depending new processes like assigning personnel onto projects, dis-
for example on the size, the number and the types of pro- persement from projects, and processes for linking project
jects they carry out. These impact the relation between assignments to careers.
M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323 317

2.3. Dynamism 3.1. Shift from technical to more human project management

Project-oriented companies have dynamic boundaries In the project management literature, a limited amount
and contexts. The number and the sizes of the projects of research has considered HRM [23–25]. Conceptualizing
performed are constantly changing, permanent and tem- HRM in the project context is still rudimentary [26,27]. If
porary resources are employed, and cooperations with cli- HRM is considered, it is mainly at the project level
ents, partners and suppliers are organized in teams, some [18,28], or from a multi-project resource allocation perspec-
of them are virtual [9,16]. Projects have been described as tive [29,30]. Langford et al. [31] and Loosemore et al.[32]
temporary organizations to bring about change [15,17]. consider HRM in construction, a typical project-oriented
Thus projects and programs entail greater uncertainty, industry. But both take standard HRM and ask how it
creating a more dynamic environment with more discon- applies to the construction industry, rather than ask if
tinuity. The degree of dynamism may also depend on the construction industry needs something extra or differ-
the size of the projects; industries like construction and ent. Further we find literature on specific issues like compe-
engineering with long project durations will be less tence development [33] or project leadership [34] but broad
dynamic than IT or product development with short pro- theorizing on HRM in project-oriented companies is lack-
ject durations, where the projects create even more ing in the current literature, with some exceptions [14].
dynamic. In this dynamic environment in which the HR Along with the broader recognition of projects as tem-
configuration is constantly changing, the challenges of porary organizations [15,17], there has lately been a shift
ensuring employee well-being and ethical treatment of from technical to more human project management [35]
workers is important. with particular attention to team aspects (for an overview
see: [36]). Further a critical mass of organizational and pro-
2.4. Project-portfolio resource and role demands ject management research has rapidly evolved regarding
the management of projects [37], the project based com-
At any time a project-oriented company holds a project pany [38], or the project-oriented company [9]. Aspects of
portfolio of different internal and external project types knowledge management [39] and governance are being
[8,18]. That means at any time more or less projects and researched [40,41]. However, so far, specific research on
programs are carried out. A person has multiple roles. A HRM in project-oriented companies is rare. While there
person can work in different projects at the same time, is increasing interest in the maturity of project-oriented
maybe even in different project roles. In one project he or companies and specific maturity models have been devel-
she is a project manager, in another a project team member oped [42], only one considers personnel management as a
or sponsor. Or a person can carry a role in a project and at specific dimension of the project-oriented company [9,43].
the same time carry another role in the permanent organiza- This is all the more problematic when we consider issues
tion, for example in the PM Office. Challenges arise from of employee wellbeing. In the dynamic environment that
this in many areas, including multiresource allocation characterise project-oriented companies, the HR configura-
[19,20] and role conflict at an individual level [21]. tion is constantly changing, as is the relationship between
company and groups of employees. The challenges of
2.5. Specific management paradigm ensuring employee well-being and their ethical treatment
in rapidly changing organizational settings in which the
The ideal project-oriented company has a specific man- transience of work-projects and the configuration of
agement culture expressed in the empowerment of employ- work-teams and even entire organizations is paramount
ees, process orientation and teamwork, continuous and is both important and overlooked. Recent case studies have
discontinuous organizational change, customer orienta- indicated evidence that companies have problems in grasp-
tion, and networking with clients and suppliers [9]. There- ing the work and emotional situation of the individual [10]
fore specific competences and skills are needed by the and multirole assignments [20] that may lead to burn out
project personnel to successfully work together in projects. for younger employees that are not able to achieve an
These may be formally supported by the company or infor- appropriate work-life balance [7] or to manage the damag-
mally demanded by the nature of the project business. ing consequences of role overload and role conflict. Fur-
Summarizing, HRM policies, practices and processes thermore, from an organizational and managerial
need to be designed to meet the specific needs of the pro- perspective, failure to address the role conflict facets of
ject-oriented company [7,22]. project work may damage efforts to retain workers as both
have been shown to cause job dissatisfaction and in
3. Different perspectives and missing links in literature extreme cases physical, psychological and behavioural job
withdrawal and voluntary turnover [21]. Failure to con-
In this section we review what has been written about sider the specific requirements of HRM in project-oriented
HRM in the project-oriented companies in each of the companies may mean theorists overlook these issues, fail to
project management, general management and HRM consider the effects, positive and negative, of project-ori-
literatures. ented work practices in individuals.
318 M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323

3.2. Focus on temporary employment pay most attention to routine organizations with stable
structures, although modern flexible organizational forms
To the extent that the general management literature have been discussed [57]. The leading HRM literature
considers the project-oriented company as a research topic, neglects projects as a new working form and the specific
authors have mainly been interested in the overlap between implications of project-oriented work for HRM. The role
new organizational forms and knowledge management of the project manager is rarely discussed [58], and the role
[16,44,45] and, from a critical perspective, the continuities of HRM in the project-oriented company is generally
and discontinuities between knowledge based project-ori- ignored. We found some exceptions.
ented organizing and bureaucratic forms of organizing There are a few recent studies that explore HR issues like
[46,47]. Alvesson [48] for example describes the challenge career, related to project-oriented structures, but they do
of managing the disintegrative tendencies of complex pro- not explicitly consider the project-oriented companies as
ject-oriented work as a major challenge in the management the basic context [59,60]. Söderlund and Bredin [10], and
of knowledge intensive firms. Bredin and Söderlund [61], have carried out case studies in
Typically, articles on project-oriented working and R&D based companies. They mainly discuss the challenge
knowledge based working refer in passing to HRM, but of linking HRM practices to the changes made in the orga-
do not address the HRM requirements of project-oriented nizational and management structures to become a project-
companies in depth. So for example Morgan [49] discusses oriented company. Their research mainly concentrates on
the holographic organization and mentions the ubiquity of Organizational Behaviour in R&D based companies.
project-oriented working, but does not discuss the specific Blair et al. [62] report on employment in the project-ori-
requirements either flowing from or induced by the use of ented film industry. Clark and Colling [63], who have con-
projects for HRM policies and practices. In describing ducted in depth case studies in the engineering contracting
knowledge intensive firms, Starbuck [50] also refers to the industry, find that the role of the HRM function is chang-
customized nature of problem solving and organization ing and that these changes are not reflected in the HRM lit-
of work within projects (called task-forces) in a case study erature because there is a lack of engagement between
on knowledge intensive firms, but does not explore the project management literature and HRM literature on
more detailed aspects of the specific requirements of pro- the role of HRM practices in project-oriented companies.
ject-oriented companies for human resource policies and We share these observations, as for example in the litera-
practices. ture on HRM in flexible firms such as the network organi-
To conclude, the combination of research or theorising zation [64], where there is no explicit mention of projects or
on project-oriented companies and HRM in the project their impact on HRM in project-oriented companies. The
management and general management literature is rather HR implications of project management as a core business
rare [51] and often focuses on the temporary employment process of organizing work and the project-oriented com-
[52]. pany as such are not objects of consideration in the leading
HRM publications we have investigated which is surprising
3.3. Emerging interest in project-oriented companies given increasing evidence that project oriented working is
becoming increasingly important [16,65,66], and that this
Publications in HRM journals have a powerful a effect is a development that need to be considered carefully and
on the way HRM is constructed, as HRM is a social con- critically in terms of the implications from non-managerial
struction [53]. The use of language by theorists and as well as managerial perspectives [67].
researchers to describe HRM is a form of social action, cre-
ating understandings about what HRM is and the effect it 4. HRM practices and processes in the project-oriented
is presumed to have on social life and in structuring company
employment relations [53,54]. This is relevant to our study
because, as currently constructed in mainstream journals, Based on previous research [7] as well as our review of
HRM is strongly framed in terms of the problems of large, the project management, general management and HRM
stable organisations. The emphasis on big, multinational literatures as they deal specifically with project-oriented
companies dominates and produces a narrow perspective companies, we have developed a simple model of HRM
on how we conceive of HRM and the appropriateness of processes in the project-oriented company, Fig. 1b.
different types of HRM practices. Project-oriented compa- Fig. 1a illustrates the processes familiar from mainstream
nies are not the only neglected area of mainstream HRM HRM literature such as recruitment, employment and
theorising. The literature is frequently criticised for its release. In addition, there are additional HRM processes
neglect of small organisations [55,56] and for privileging in project-oriented companies: assignment to projects,
managerial perspectives on HRM practices, a trend engagement on projects, and dispersion after projects have
increasingly challenged by researchers from a more critical finished. What we understand by employment by the orga-
and ethical perspective [53,4]. When it comes to project-ori- nization and engagement on projects can be expanded by
ented companies specifically, little has been published on adapting the Michigan model of HRM [68], Fig. 2. This
the topic in mainstream HRM journals. These journals still shows appraisal, reward and development on the project
M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323 319

Selection Employment Release

2a: HRM in the classically managed company

Selection Employment Release

Dispersement
Dispersement
Dispersement
DispersementAssignment
DispersementAssignment
Assignment
Assignment
Assignment
fromfrom
project
from
project
from
project
from
projectto project
projectto project
to project
to project
to project

Engagement
Engagement
Engagement
Engagement
Employment
on project
on project
on project
on project
on project

2b: HRM in the project oriented company

Fig. 1. HRM in the project-oriented company versus HRM in the classically managed company.

contributing to appraisal, development and reward in the We now discuss each of the steps in the process in turn,
organization. starting with the three steps at the organizational level and
Consistent with our commitment to studying the impli- then the three at the project level. We use this model to
cations of HRM in the project-oriented company from structure the remainder of the review.
non-managerial as well as managerial perspectives, all these
processes can and should be researched from both an indi- 4.1. Selection
vidual and an organizational perspective [69], something
which is only recently an explicit focus in the mainstream Keegan and Turner [14] describe the selection processes
HRM literature [5]. used by project oriented companies. They suggested that

Reward

Selection Performance Appraisal Release

Development

Employment in the organization

Reward

Assignment Performance Appraisal Dispersement

Development

Employment on the project-oriented

Fig. 2. Employment in the company and on the project.


320 M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323

such organizations tend to use organic selection processes. supports the professionalism and thus the competence
Search and selection can be done for the company in gen- development of project management personnel [76].
eral or for a specific project or program. Hauschildt et al.
[70] report on the selection of project managers by identify- 4.3. Release
ing types of project managers and their further develop-
ment in a project manager pool. Next we consider release of the employees and tempo-
rary workers from the organization. There are two key ele-
4.2. Employment ments of the release process [7]:

Sveiby [71] argued that a key to retaining personnel in  Organizational learning.


knowledge based organizations was ensuring that employ-  Individual review and feedback.
ees had the opportunities to work on interesting projects
providing interesting career challenges. In project-oriented With the release of freelance workers it is also important
companies the comfortable certainty of climbing the ladder to remain in contact to maintain the organization’s net-
up the functional silo does not exist and arguably such cer- work and to make future cooperation possible [7].
tainty is a thing of the past in most organisations. The
mainstream HRM literature has indeed begun to conceptu- 4.4. Assignment to the project
alise careers in more dynamic terms [72], describing initia-
tives such as the network-path career [73]. While it is true This is the process of assigning project personnel (pro-
that the HRM literature now recognises the necessity for gram managers, project managers, and team members) to
increased flexibility in career development ‘in today’s new projects and programs. It has similarities to recruit-
dynamic organizational environment’ [59,74], the dyna- ment of people to the parent organization, but also sub-
mism and flexibility of career development in project-ori- stantial differences, even when appointing external
ented companies is intrinsically related to the fact that contractors to be peripheral workers on the project. Esk-
projects, being transient, cannot provide careers. While erod and Jepsen [77] have researched new staffing proce-
each project can be a learning opportunity in a career built dure, in which enrolment is dependent on employees
on successive and overlapping projects providing a broad voluntarily responding to internal advertising of projects.
sweep of learning experiences, this requires careful manage- The assignment to the project may also be during the pro-
ment and therefore the study of career management in pro- ject live cycle [78].
ject-oriented companies commends critical attention. The appointment of personnel to projects takes on stra-
Keegan and Turner [15] introduced the idea of the ‘‘spiral tegic significance and may influence the ability of organiza-
staircase career’’ to reflect the idea that people will move tion to retain personnel. We anticipate, based on previous
through a series of varied and wide-ranging jobs in project- research [51] that the career dynamics of allocation to pro-
oriented companies. Turner et al. [74] reported that project jects will be visible and that organizations consciously seek
managers tend to stay longer with one organization than to make project personnel allocation decisions based on an
other project participants, because they feel committed to assessment of what personnel are available and what pro-
one firm as a way of achieving career development. jects may provide – for each prospective appointment –
Project-oriented companies arguably therefore provide specific development needs, expertise, experience to work
the kind of varied and interesting careers to which the with particular clients, etc. These processes should of
HRM literature is increasingly alluding. However, to the course be explicitly considered from both an individual as
extent that employees rely on continuous movement from well as an organizational perspective.
project to project to develop their careers, the processes
linking employees to projects and project to careers should 4.5. Employment in the project
be critically examined. For example, it is important to con-
sider the manner in which processes are put in place to This is probably the most readily recognized of the three
ensure outcome justice as well as procedural and interac- additional processes. Within a project a lot of development
tional justice in project allocation. The way these processes of personnel takes place. It is strongly linked to the leader-
are (mis)managed may have an effect on the legitimacy of ship function of the project manager [79,38]. But what is
career development processes in project-oriented compa- becoming clear is that project owners and project managers
nies, employees perceptions of fairness, and the effective- may have duties for the care of individuals not previously
ness of the processes from a managerial perspective [75]. recognized, such as project appraisals and support for
Turner et al. [74] describe development of project per- career development. Additionally, the project owner has
sonnel in the project-oriented company. The objective of duties to care for the development of, for example, the pro-
personnel development is to improve the competence of ject manager. Methods used are training on the job, feed-
project management personnel by offering the possibility back, etc. [22]. These processes should be explicitly
of gaining knowledge and experience. The establishment considered from both an individual as well as an organiza-
of the profession ‘‘project manager’’ in an organization tional perspective.
M. Huemann et al. / International Journal of Project Management 25 (2007) 315–323 321

4.6. Dispersement from the project significant in understanding the HR dynamics of project-
oriented companies.
This is a process whose need is not widely recognized in While most HRM research is undertaken from a mana-
the literature on projects or on HRM. It has similarities to, gerial and prescriptive perspective, we argue that research
but also substantial differences from, the release from the on HRM in project-oriented companies must take the per-
parent organization. At this point the organization needs spective of the individual employee as well as the organisa-
to decide whether the employee will be [7]: tion. Ensuring employee well-being and ethical treatment of
workers in the project-oriented company is an issue that is
 immediately assigned to a new project; vitally important but which has not been widely studied in
 assigned to a project starting sometime in the future the extant HRM literature. Despite the fact that there has
where their skills will be better used; been a change from technical-task issues to more people-
 held in abeyance because there is no project for them to oriented issues in project management research, the impor-
be assigned to. tance of HRM has not yet been widely recognized. The
HRM perspective especially as a specific function in the
It is at the end of a project that core workers are most project-oriented organization is still a blind spot in project
vulnerable to leaving the organization, especially if faced management, general management, and HRM literatures.
with a period of ‘‘sitting on the bench’’. At the end of the For reasons outlined in Sections 2 and 4, we propose that
project, core workers should be debriefed about their expe- the HRM requirements of the project-oriented company are
riences and counselled about the future. If they do not have different than those in the classically managed organization,
another project to go to straight away, they can do many and that these requirements have not been addressed in the
things: literature. We therefore propose to undertake further
research to identify the HRM policies, practices and pro-
 Sitting on the bench. cesses adopted by project-oriented companies, with the twin
 Going through training or other personal development. objectives of:
 Going to the project management office to do technical
and process development. 1. exploring to what extent, the distinctive characteristics
of project-oriented companies, including the temporary
This period is one in which we might expect project per- nature of the work processes and the dynamic nature
sonnel to be more anxious, and having practices in place to of the work environment, lead to the necessity for spe-
recognize and manage that is clearly important for both cific HR strategies and specific HR practices;
individual and organisational wellbeing. The choices made 2. considering the implications for both organisations and
about what to do with project personnel at the end of the individuals of these emergent policies and practices.
project need to be made in consultation with them to
ensure employee well-being and procedural fairness in pro-
ject allocation decisions, and from an organizational per- Acknowledgement
spective to avoid valued personnel leaving. Peripheral
workers also need to be counselled and debriefed. If they This research has been sponsored by the Project Man-
have performed well, the organization may like to retain agement Institute (PMIÒ), as well as the three institutions
them. The organization can advise them on training, even we work for. We are grateful for their support.
involve them in training, invite them to attend social activ-
ities, and work at keeping them with the network of poten- References
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