CVE524: ENGINEERING MANAGEMENT

4 MANAGEMENT BY OBJECTIVES

4.1. Introduction

Launched in 1954 by Peter Drucker in "The Practice of Management" MBO - Management

by Objectives - is the management tool that enables the increase in performance of by
focusing on results, not on the work itself, providing cascade and aligning the company goals
with individual goals of managers who are at different levels within the organization
(Popescu, 2013).

Management by objectives is based on the rigorous determination of the objectives up to the

executors’ level, who participate directly to their establishment and the close link between
rewards and sanctions with the achievement of the established objectives (Deac, 2014). This
method was generated by the need to order actions based on the idea that the success in
implementing a development strategy for the unit depends on the correlation of the general
objectives with the ones of organizational subdivisions and the interest of the entire personnel
of the economic unit.

Management by Objectives (MBO) is a strategic approach to enhance the performance of an

organization. It is a process where the goals of the organization are defined and conveyed by
the management to the members of the organization with the intention to achieve each
objective. Considered to be one of the most complex and most widespread management
system and also controversial by some specialists, the management by objectives can be
defined as a "management tool focused on the rigorous determination and derivation of the
objectives to the posts and executants directly involved in their establishment and correlation
of rewards / sanctions with the degree of realization of these objectives (Nicolescu &
Verboncu, 2007). In essence, the management by objectives is a structured technique,
belonging to field of management sciences, through which you can fix goals for any of the
organizations that we know. Properly implemented and rigorously applied management by
objectives is a highly effective solution to the underlying problems that are facing the modern
organizations and is becoming more acute.

Over time, as a form of expression of the needs that define the very purposes for which
organizations exist have crystallized major components that characterize the management by
objectives (Guerras-Martin & Ronda-Pupo, 2013). Briefly, they are presented as:

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The objective system, that highlights the fundamental sets of goals, specific derived
objectives and individual targets;

 Action programs, by means of which are highlighted major decisions and actions to
be taken and initiated to achieve the objectives;

 Calendars deadlines, that specifies intermediate and final deadlines to achieve the
objectives;

 Guidelines, general or partial, resulting in methodological guidance on how to achieve

the objectives;

Budget developed for the firm and its components addressed as management centers

The main managerial tools used in the context of management by objectives are evidenced by
diagnosis, extrapolation, the method of scenarios, market research studies, delegation,
meeting, management through budgets, rules of organization and functioning, flow chart,
functions descriptors, job description etc. As any system or method of management, also the
management by objectives faces a set of limitations, mainly due to behavioral problems of
staff, commendable efforts directed towards applying management by objectives, the
difficulty of individual targets for all posts within the organization.

Being interconnected with the bonus system, MBO can become an effective tool for
motivation and development (Drucker, 2010).

According to Peter Drucker, MBO is a cyclical process, usually annual, that contains the
following 5 steps:

Figure 5.1: The process of MBO

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The MBO is linking the strategic thinking of the top management and the implementation of
management through the next levels strategy. Thus, the responsibility against objectives is
translated from the level of organization at the individual level.

For the MBO to achieve their goals is essential that the organization members to have a
common and unity understanding and on the organization's objectives, to realize the
important role they play in achieving these objectives.

Managers must clearly define the objectives and the evaluation system of the results, should
make them available to the team, to organize and motivate subordinates to forge ownership,
to provide / receive continuous feedback, to monitor partial results, to evaluate performance
and provide the conditions for their development and the team members.

A good manager stimulates, motivates, delegate tasks and responsibilities taking into account
the strengths of each individual. A good manager motivates by clearly defining the result to
be achieved, providing freedom of action and encouraging the discovery of the path to result.
The path imposed by the result often leads to failure and demotivation.

4.2. Characteristics of the MBO

The main characteristics of management by objectives are:

 The high complexity, given by the fact that the application to cover all procedural and
structural components of the organization and in its context can be used many
methods and management techniques according to the problems raised by grounding
components and achieving the goals;

 the managerial dimension, namely managerial decentralization within the company,

given the emergence of new "actors", called centers of administration, characterized
by the tasks, responsibilities and superior skills of the simple hypostasis of
organizational subdivision (activities or competent);

 The economic dimension, ensured by using the budget as an important managerial

tool. It develops, launches, executes and follows both the firm level and at the level of
middle administration. For it is facilitated to call other economic levers, with
outstanding motivational valences (profit, wages, prices etc);

 The participatory dimension, meaning that into the development of the objectives and
other budget components it is needed and it facilitates the active and responsible
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participation of management centers leaders and other managers and executives of

them;

 The motivational dimension evidenced by the correlation of rewards / sanctions with

the degree of achievement of individual objectives, management centers and company
as well as the degree of involvement and participation of each employee to achieve
them.

4.3 Steps in Management by Objectives Process

1. Define organization goals: Setting objectives is not only critical to the success of any
company, but it also serves a variety of purposes. It needs to include several different types of
managers in setting goals. The objectives set by the supervisors are provisional, based on an
interpretation and evaluation of what the company can and should achieve within a specified
time.

2. Define employee objectives: Once the employees are briefed about the general objectives,
plan, and the strategies to follow, the managers can start working with their subordinates on
establishing their personal objectives. This will be a one-on-one discussion where the
subordinates will let the managers know about their targets and which goals they can
accomplish within a specific time and with what resources. They can then share some
tentative thoughts about which goals the organization or department can find feasible.

3. Continuous monitoring performance and progress: Though the management by objectives

approach is necessary for increasing the effectiveness of managers, it is equally essential for
monitoring the performance and progress of each employee in the organization.

4. Performance evaluation: Within the MBO framework, the performance review is

achieved by the participation of the managers concerned.

5. Providing feedback: In the management by objectives approach, the most essential step is
the continuous feedback on the results and objectives, as it enables the employees to track
and make corrections to their actions. The ongoing feedback is complemented by frequent
formal evaluation meetings in which superiors and subordinates may discuss progress
towards objectives, leading to more feedback.

6. Performance appraisal: Performance reviews are a routine review of the success of

employees within MBO organizations.

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4.4 Benefits of Management by Objectives

i. Management by objectives helps employees appreciate their on-the-job roles and

responsibilities.

ii. The Key Result Areas (KRAs) planned are specific to each employee, depending on
their interest, educational qualification, and specialization.

iii. The MBO approach usually results in better teamwork and communication.

iv. It provides the employees with a clear understanding of what is expected of them. The
supervisors set goals for every member of the team, and every employee is provided
with a list of unique tasks.

v. Every employee is assigned unique goals. Hence, each employee feels indispensable
to the organization and eventually develops a sense of loyalty to the organization.

vi. Managers help ensure that subordinates’ goals are related to the objectives of the
organization.

4.5 Limitations of Management by Objectives

i. Management by objectives often ignores the organization’s existing ethos and

working conditions.

ii. More emphasis is given on goals and targets. The managers put constant pressure on
the employees to accomplish their goals and forget about the use of MBO for
involvement, willingness to contribute, and growth of management.

iii. The managers sometimes over-emphasize the target setting, as compared to

operational issues, as a generator of success.

iv. The MBO approach does not emphasize the significance of the context wherein the
goals are set. The context encompasses everything from resource availability and
efficiency to relative buy-in from the leadership and stakeholders.

v. Finally, there is a tendency for many managers to see management by objectives as a

total system that can handle all management issues once installed. The
overdependence may impose problems on the MBO system that it is not prepared to
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tackle, and that frustrates any potentially positive effects on the issues it is supposed
to deal with.

4.6 The Implementing Steps of MBO Within S.C. RELEE S.A.

S.C. RELEE S.A. is a company in the electrical and electronics industry that in the last years
is facing with several problems:

 The large number of complaints from customers;

 Lack of recent training and evaluation of employees and their powers;

 Exceeding delivery deadlines;

 Inefficient staff recruitment;

 The lack of a material base updated to the market requirements.

According the problems above, the operationalization of the method involves making a set of
actions that take place in a logical succession forming the next steps:

 The first phase coincides with setting the overall objectives. This step is carried out by
the making the plan and the strategy of developing the unit. It optimizes the final
economic results of the unit. A particularly important role at this stage, it has the
scientific validity of each target, their knowledge by all unit components, a clear
indication of the system of rewards and sanctions. Knowing the objectives by
managers and performers are realized by practicing specific methods of participatory
management.

 The second phase coincides with setting the derivate, specific and individual goals.
The general objectives set in the previous step are broken down by organizational
divisions depending on each specific activity, so that these can be allocated to each
lineup work and where is possible on each worker. After their scheduling follows
another moment of utmost importance: analyzing and determining the means and
ways of achieving the goals. At this stage is analyzed the capacity of serving the
sectors that will have to ensure the development of the activities according to the
performances required by achieving the goals.

 The third phase coincides with the development of the other components of the
method - the action programs, the reporting period, the list of methods, budgets etc.
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These components are developed at both the unit and each structural component part.
Is developing and scaling of revenue and expenditure budget. It reflects the actual
situation in each organizational subdivision.

 The fourth phase involves the adoption of a program of measures designed to ensure
the changes that are imposed on the organizational structure of the unit, and at the
decisional and informational subsystem.

Regarding the organizational structure shall consider the following: restructuring of

ineffective jobs and functions in order to increase the ability to streamline the
company.

Regarding the decisional subsystem is envisaged the delimitation of authority and

responsibility of each decision maker, specifying the system of decisions to be
adopted by each. It also sets the level of deviations to be communicated to the higher-
level decision maker.

To achieve the established objectives an important role is having the adoption of the
information subsystem to the new conditions. The informational subsystem, besides
the usual functions, must ensure the prompt information of the decision makers
regarding the achievements or deviations from certain reporting deadlines.

 The fifth phase is to follow the achieving of objectives. The essence of the activity
from this step is the decision center communication of the irregularities that have
arisen in achieving the objectives. It has a particularly important role because the
information relating to occurred deviations are initiated the correction decisions. Also,
through the discovery of some reserves that were not considered initially, new
decisions can be formulated to ensure higher performances achievement of the
objectives set.

 The sixth phase is to assess the achievement of the objectives and rewarding the staff.
The conclusion of the analysis in this phase is the starting point for establishing and
foundation new goals in the next period.

Experimentation and putting into practice of the method can be achieved at two levels: in a
sector of activity or at the levels of the economic unit. Also, it will precede some actions such
as specifying the sector to be held; training of all personnel from the sector regarding

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methodology for implementing and the objective pursued; staff information from the other
sectors and sectors with regard to experimentation method etc.

Experimentation and introduction of the method at the unit level has the advantage that all
personnel are involved in this activity. For the success of this method it is necessary that the
action program be kept as complete and his application to be tracked carefully in all work
phases.

The introduction and practice of management by objectives method, is experiencing some

difficulties both organizational and psycho-social.

Organizational difficulties concern: establishing correct the derivate objectives on

organizational subdivisions and especially between the production ones and serving ones, the
correct assimilation by all employees of the methodology required by applying the method,
the poor information of all staff from the unit etc.

Psychological difficulties relate mainly to the ones linked to personnel behavior from the unit
and, in particular, at the receptivity of managers at different hierarchical levels.

4.6.1. Management by objectives implementation stages within S.C. RELEE S.A.

Sequence 1: Fetching fundamental objectives from the organization's strategy;

Sequence 2: Outlining the categorical objectives system;

Sequence 3: Developing the organization's general budget;

Sequence 4: Delimiting and dimensioning management centers;

Sequence 5: Developing budgets for management centers;

Sequence 6: Developing the level of the normal cost per product or service, taking into
account both the direct costs (raw materials, direct salaries) and also its own operating costs
of functioning the management centers;

Sequence 7: Launching the control center budgets;

Sequence 8: Achieving budgetary execution, which involves operative recording and

transmission of deviations from expected normal expenses;

Sequence 9: Filling specific layouts of the dashboard for organization management that
include details on the results from achieving the goals;

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Sequence 10: Determining the amount of material rewards / sanctions to be given to

employees depending on the degree of objectives achievement.

4.6.2 Conclusions

After the implementation of this method at S.C. RELEE S.A., some advantages were
observed, but also some disadvantages that are shown below:

Advantages of implementing the MBO:

 focusing the efforts of all the components of the company to achieve the preset
objectives;

 managers skills development to scrutinize the future of the unit, to be flexible and
dynamic in action;

 improving interpersonal relations from the unit and broadening of accountability to all
components;

 ensuring the widespread application of participatory management techniques;

 amplification of the entire staff motivation level from the unit;

 rationalization of managers time in exercising the control function and in solving the
perspective problems of unity;

 closer correlation of the wages with the results obtained in achieving the objectives;

 the economic efficiency increasing of management activity and achieving better

results on economic activity as a whole unit.

Disadvantages of implementing the MBO:

 high consumption of time;

 possible conflicts between managers and subordinates;

 problems on various hierarchical levels;

In conclusion, the efficiency of the management by objectives depends to a very large extent
on how goals are setting, namely:

 objectives must be specific and measurable;

 in declaring the objectives should be included the temporal element;

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 objectives must be clear and unambiguous;

 all targets must be results-oriented;

 there must be agreement between the organization's policies and objectives.

The management by objectives is nothing but a tempting challenge for managers who
persuade them to "rediscover" their primary function: the one of creators and implementers of
strategies. The MBO is the way the modern manager can put up really strong and powerful
organizations with strong development opportunities.

By putting into practice this method, the managerial system of the organization becomes
more stable being updated annually when resuming the MBO cycle.

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5 PERSONNEL MANAGEMENT

5.1 Introduction

Management is a process whereby various resources are integrated into a total system for
objective accomplishment. It tries to bring about coordinated efforts of many individuals or
many groups to achieve specified goal. Management is a 'System of Authority', a legal right
to command or direct others to act in a prescribed manner. Qualified and trained personnel
selected as managers manage the organization. Management process is guided by definite
objectives; performance of organized activities; maintenance of certain definite relationships
(human, etc.). Management process involves decisions to get the tasks done through
resources. These decisions are the policies which help the organization and the personnel
work smoothly towards achievement of organizational goals.

The word 'personnel' in an organization is used as a synonym to 'manpower' or people.

Megginson defined 'Manpower' as the total knowledge, skills, creative abilities, talents and
aptitudes of an organization's work force as well as the value, attitude and beliefs of the
individuals involved. Manpower Management includes planning, selection, training and
development of human resources of the organization. Personnel management is the
management of manpower. This deals with planning, organizing, directing and controlling
the personnel functions of the organization. It is a major part of the managerial process.

To form an organization there is a need for more people. These people should be suitable to
accomplish the tasks specified to achieve the organizational objectives. The personnel
management as a major sub-system or an expanded area of the organization is concerned with
the recruitment, selection, development, utilisation and motivation of manpower towards the
success of the organization. To make the tasks easy, personnel departments are established
whose managers are entrusted with the responsibilities of managing the problems of the
personnel employed in that department.

Personnel Management is people-centered and its objective is the maintenance of better

human relations in the organization by development, application and evaluation of personnel
policies, procedures and programmes relating to the individuals in the organization to
optimize the contribution towards organizational objectives.

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Its aim is to make the best use of the human resources for which it includes the recruitment of
right kind of people according to jobs, their training and development to do the work, their
welfare to maintain their morale and incentives to boost their interest in order to reach the
ultimate objectives of the organization. It puts efforts to retain the competent staff, their
interest to work which is the most difficult task.

The term personnel management is also used as 'manpower management', including industrial
relation, labour relation, personnel administration etc. Altogether it conveys the meaning that
it is concerned with maintaining satisfactory human resources who obtain maximum
satisfaction out of their work to achieve best results in the organization.

Personnel management deals with the effective control and use of manpower or human
resources and it is concerned with the procurement and maintenance of a satisfactory and
satisfied manpower (personnel).

5.2 Definitions

Personnel management is defined in many ways by several writers. To understand its

meaning it can be simplified as:

Personnel means the body of persons engaged in any service and 'Management' applies to
'application of skills'. Walter D. Son defined personnel management as that activity in an
enterprise which strives to mould human resources into an effective organization, provides
opportunity for maximum individual contribution under desirable working conditions,
promotes individual development and encourages mutual confidence and understanding
between employees and the employers as well as among employees themselves.

Personnel Management is a responsibility of all those employed as specialists, who manage

people as well as the work of those who are employed. It is that part of management which is
concerned with people at work and with their relationships within an enterprise. Personnel
management is also defined as the planning, organizing, directing and controlling of the
procurement, development, compensation, integration and maintenance of people for the
purpose of contributing to organizational goals.

Personnel management is an important part of the management process which is primarily

concerned with the human constituents of an organization and the methods adopted are
focused on the development of the potentialities of employees for the success of the
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organization. The personnel get maximum satisfaction out of their work and put efforts for
the improvement of organization.

It is purely people or personnel-centred management and its main objective is effective

utilisation of human resources. It is an instrument to attain the established objectives of the
organization. It is described as a process of planning, organizing, team building, executive
action andcontrolling - the personnel with a view to attain maximum efficiency and to get
best results.

5.2.1 Scope of Personnel Management

Personnel management is the expansion of general management which shoulders the total
responsibility of human resources of the organization. The above definitions emphasize on
important areas which personnel management is interested to include in its scope. In a nut
shell personnel management as a management process includes planning, organizing,
coordinating, controlling and evaluation of the personnel. At the same time it is concerned
with the welfare, development and human relations of its manpower or human resources.
Since it deals with manpower it takes care of:

i. Staffing - selection, recruitment and retention

 Training and development
ii. Economic resources - wages and salaries
iii. Motivation for staff development - for personnel and organizational growth
iv. Creating favourable working conditions - for personnel welfare and, development
v. Human relations - respect to individuality and welfare of the individual,
communication processes - both formal and informal.
The scope is wide and in larger organizations the executives or managers cannot carry out all
the functions of personnel management. Hence to make the responsibilities easy, personnel
departments with 'personnel managers' as heads or supervisors are established.

The responsibilities are delegated to some extent to personnel departments, but on the whole,
the responsibility lies with the Managers/Directors of Personnel Management.

5.3 Elements of Personnel Management

Organization- Organization is said to be the framework of many activities taking place in

view of goals available in a concern. An organization can be called as a physical framework
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of various interrelated activities. Right from manpower planning to employees’ maintenance,

all activities take place within this framework. The nature of the organization is dependent
upon its goal-profit-making.

The goal of clubs, hospitals, schools, etc. is service. The objective of consultancy is providing
sound advice. Therefore, it is organizational structure on which the achievement of goals of
an enterprise depends upon. In personnel management, a manager has to therefore understand
the importance of organizational structure.

Job- The second element, i.e., jobs tells us the activities to be performed in the organization.
It is said that the goals of an enterprise can be achieved only through the functional
department in it. Therefore, seeing the size of organization today, the nature of activities is
changing. In addition to the three primary departments, personnel and research department
are new additions. Various types of jobs available are:

Physical jobs

Creative jobs

Proficiency jobs

Intellectual jobs

Consultancy jobs

Technical jobs

3. People- The last and foremost element in personnel management is people. In

organizational structure, where the main aim is to achieve the goals, the presence of
manpower becomes vital. Therefore, in order to achieve departmental goals, different kinds
of people with different skills are appointed. People form the most important element of the
organization without them structure is meaningless. It helps to achieve the goals of the
enterprise.

People help in:

manning the functional areas;

achieving the functional departmental goals;

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making a concern operational;

giving life to a physical organization.

The different types of people which are generally required in a concern are:

Physically fit people

Creative people

Intellectuals

Technical people

Proficient and skilled people

In personnel management, a personnel manager has to understand the relationship of the three
elements and their importance in organization. He has to understand basically three
relationships:

Relationship between organization and job

Relationship between job and people

Relationship between people and organization

Relationship between organization and job helps making a job effective and significant.
Relationship between job and people makes the job itself important. Relationship between
people and organization gives due importance to organizational structure and the role of
people in it.

5.4 Functions of Personnel Management

It includes both managerial and operative functions.

Managing Functions include

i. Planning
ii. Organizing
iii. Directing
iv. Controlling

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Operative Functions include

i. Procurement
ii. Employment
iii. Training and Development
iv. Remuneration
v. Working Conditions
vi. Motivation
vii. Personnel Records
viii. Industrial Relations
ix. Morale studies & Personnel Research
The operative functions of Personnel Management involve selection, recruitment and
placement of right kind of personnel in right places to accomplish organizational objectives.
The procurement of personnel is a difficult job for which it covers calling for applications,
scrutinizing the applications, conducting necessary interviews and inducting the right
personnel.

Personnel development and welfare are other important components in operative functions
which are essential for the success of the organization. The knowledge and skills are to be
refreshed and updated according to the changing scenario in terms of technology and changed
tasks.

The personnel need adequate and proper remunerations as compensation. In the planning
stage itself, the wages or salaries and the incremental rewards are to be decided upon. In other
words the economic compensation should be worked out and written in detail about wage
policies, systems and rewards as per the job evaluations.

Psychological satisfaction and maintenance of interest etc. are also part of the compensation
which needs to be taken care of by the personnel management. Personnel management has
other important challenging functions such as integration and maintenance of staff. Their
welfare is of great concern to the organization which includes physical facilities, health and
safety measures and boosting their morale and interest to have positive attitude towards the
organization and organizational objectives.

5.5 Role of Personnel Manager

Personnel manager is the head of Personnel Department. He performs both managerial and
operative functions of management. Personnel manager provides assistance to top

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management. The top management officials are the people who decide and frame the primary
policies of the concern. All kinds of policies related to personnel or workforce can be framed
out effectively by the personnel manager.

His role can be summarized as:

Planning – this involves formulating the future course of action. Planning includes
determining in advance the personnel programs and changes required that would contribute to
the achievement of organizational goals.

Organizing – it involves establishing an intentional structure of roles for people in an

organization. Structural considerations such as the chain of command, division of labour, and
assignment of responsibility are part of the organizing function. The organizing function
establishes relationships among employees so that they can contribute collectively towards
the attainment of an organization’s goals.

Staffing – This is the process of obtaining and maintaining capable and competent personnel
in various positions at all levels. It broadly encompasses manpower planning, recruitment,
placement, induction and orientation, transfer, career progression, promotion and separation.

Directing – it involves directing all the available resources towards the common
organizational goals. Thus, direction is a vital management function, which ensures
maximum employee contribution and also helps in establishing sound industrial and human
relations. It also involves coordination between different departments.

Advisory: He advices the line manager as a staff specialist. Personnel manager acts like a
staff advisor and assists the line managers in dealing with various personnel matters.

Counseling - As a counselor, personnel manager attends problems and grievances of

employees and guides them. He tries to solve them in best of his capacity.

Mediator - Personnel manager acts as a mediator. He is a linking pin between management

and workers.

Spokesman: He acts as a spokesman, since he is in direct contact with the employees, he is

required to act as representative of organization in committees appointed by government. He
represents company in training programs.

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5.6 Main Activities of Personnel Management

1) Recruitment of right personnel for the kind of jobs

2) Placement of employees

3) Developing and conducting induction training and orientation programmes

4) Developing job descriptions

5) Developing and implementing the procedures of job analysis and job evaluations

6) Planning and arranging for staff development training programmes

7) Identifying the potentialities in personnel and assigning jobs for maximum outputs

8) Organizing and arranging staff welfare programmes and facilities

9) Ensuring adequate human relations and human contacts between employees and employers

10) Encouraging co-operation among workers and seeing to the smooth functioning of the
organization

11) Developing the potentialities of each and every individual

12) Taking responsibility for protecting and maintaining physical, social and emotional health
of the individual

13) Creating and maintaining a high level of interest and morale among employees.

All these activities reveal that the Personnel Management has a responsibility and concern
with procurement, placement, training and development, maintenance of the personnel of an
organization to work with their maximum satisfaction with efficiency and economy to
accomplish the organizational goals to achieve the best results.

It has also some other important functions for the smooth functioning of the organization.
Some of them are:

1) Arranges welfare services: It not only takes responsibilities for the physical health of the
personnel but also arranges social well-being services of the employees such as pension
schemes, provident funds, group insurance scheme, loan facilities etc.

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2) Maintains records which help to obtain the statistical figures in relation to employees
development, turn over, absenteeism, etc. These records act as guide for future planning and
development.

3) Plans and provides safe and favourable working conditions to work smoothly and
satisfactorily to achieve maximum results.

4) Establishes sound policies according to the abilities and competencies of the personnel for
promotions.

5) Keeps in touch with the day to day changes in the society and tries to meet the economic,
social and psychological needs of the personnel and develops pay rolls with due
consideration to organization goals.

6) Tries to conduct research by identifying personnel areas to bring changes for improvement
in the personnel, functioning, policies as well as in the organization.

7) It maintains labour relations by resolving conflicts through collective bargaining and

settles the disputes favourably and looks after the grievances of the personnel with a view to
solve the problems.

5.7 Challenges of Modern Personnel Management

The following are some of the challenges of modern personnel management:

i. Changing Mix of the Work force

ii. Changing Personal Values of the Work force
iii. Changing expectations of citizen/employees
iv. Changing levels of productivity
v. Changing demands of government

Changing Mix of the workforce

The issues involved are as follow:

 Increased numbers of minority members entering occupations requiring greater skills.

 Increasing levels of formal education for the entire work force.
 More female employees.
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 More married female employees.

 More working mothers.
 A steadily increasing majority of white-collar employees in place of the blue-collar.

Changing Personal Values of the Work Force

 Better morale
 Better fit of work time to the employee’s “body clock”
 Improving handling of fluctuating workloads
 Increased customer service
 Reduced employee absenteeism
 Reduced turnover

Changing Expectations of Citizen-Employees

 Freedom of Speech
 Right to privacy

Changing Levels of Productivity

 Numerous laws
 Increase in new numbers of employees
 Adversial relations with labour unions

Changing Demands of Government

In procurement, development, compensation, integration, maintenance and separation.

5.8 Staffing the Project Team

There are a number of important factors that contribute to a successful project, but if one had
to single out the most important factor, it would be people. Good people always find a way to
make things happen—to overcome the many challenges inherent in any engineering or
construction project. The project manager’s ability to influence who is assigned to his or her

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project can have a significant impact on the success of the project. And over many projects,
that influence can range from very little (e.g., he or she inherits the project team members and
must forge a successful team with the people given to him/her), to being told he or she can
pick the best people for the job at hand.

Typically, however, the actual amount of influence the project manager has in selecting his or
her project team falls somewhere between these two extremes. As a result, the project
manager must employ a number of different strategies to obtain the best people for his or her
project, consistent with the overall objectives of the organization. In lining up people for the
project team, the project manager must be flexible, persuasive and assertive.

5.8.1 Whom to select

The right type of expertise

The people whom you select for your project team will depend on the nature of the project.
As a project manager or construction manager or someone who aspires to become an
engineering or construction project manager, you will want to select the right engineering
disciplines, construction trades, and support staff that will best help you lead and manage a
successful project.

Typical engineering and construction projects include some or all of the following
engineering disciplines, construction trades and support staff:

•Electrical • Financial/accounting

•Mechanical • Purchasing

•Process • Legal/contractual

•Civil • Insurance/risk management

•Structural • Cost estimating

•Plumbing • Purchasing

•Energy Engineering • Drafting/Computer Aided Design

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•Architecture

Each project, with its own unique requirements, will determine how many and which types of
these or other skills will be required to perform a successful project.

The right type of people

After you have determined what type of expertise is required for your project, you will want
to find good people who possess the right kind of expertise needed on the project. This is
where it is critically important that you do as much homework as possible on potential project
team members.

Assuming you have some say in who will be assigned to your project (and you almost always
will have some input as to who will be on your project team—it just varies as to how much
input you will have), you want to request the best possible people for your project. The best
electrical engineer, the best draftsperson, the best electrical installer, the best heating,
ventilating, air conditioning mechanic, etc. Good people solve problems before they become
problems, because they typically do things right the first time.

Below are some things you can do to identify the best people for your project team.

•Your own experience. If you have worked with someone previously and know he or she
performs good work, this is the best recommendation you can have because it’s first hand.

•Ask your boss. Your boss, unless he or she is new in the job, will be able to suggest good
people for your project team. In a recent engineering project managed by Barry for a client,
he relied heavily on his client (to whom he reported) for staffing recommendations which
turned out very well.

•Recommendation of colleague or friend. Ask people you trust whom they might recommend
for the job. A good recommendation from a trusted colleague is very valuable, especially if
that person knows the type of work to be performed better than you.

•Recruit from outside your organization. If there is no one within your organization whom
you can recruit to fill an open project team slot, you may need to hire a person from outside
your organization. The open position may be one requiring an experienced engineer,
craftsperson, CAD operator, etc., or one which could be filled by a new college graduate,
trade school graduate, union training program graduate or other entry level person. Special
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care must be taken in the recruiting process to ensure compliance with federal, state and local
regulations governing recruiting and hiring. Otherwise, you could end up with a lawsuit on
your hands (just what you and your company don’t need!). Recruiting from outside the
organization is the riskiest of the staffing options and will be discussed in considerable detail
in next section.

5.8.2 Staffing from outside the organization

Recruiting/hiring good people is one of the most challenging tasks of a manager. Oftentimes,
all you start with is a one-or two-page resume that is designed to highlight the best in a
potential candidate. Weaknesses are rarely mentioned. But before you even have a resume in
hand, you need to reach out to potential candidates and make them aware you have a job
opening you need to fill.

Recruiting

Depending on the size of your organization you will want to work closely with your human
resources department (HRD) to have them help you find the right people for your project. If
you have an HRD, by all means use it; if not, you will likely do most of the recruiting effort
on your own. Either way, the steps in this section will help you find and hire the right people.

1. Create a job description for the position you are seeking to fill. List the duties and
responsibilities of the position as well as the skills required to successfully perform in that
position. Make it job-specific and leave out attributes such as gender, age, race, physical
appearance, etc. which have no relevancy to the actual job and which could lead to a lawsuit.
See Table 5.1 for an example job description template.

2. Identify your sources for the position you are seeking to fill. Table 5.2 provides a listing of
potential sources. You can use these to help kickstart your search for that “right” employee
for the job. Your actual approach will depend on your specific needs, the size of your human
resources department, and other factors unique to your organization.

3. Receive and evaluate applications/resumes. After advertising the open positions, you or
your HRD will begin to receive a lot of resumes. Often, and especially in a tight job market,
you will receive resumes from people who do not remotely fit your position description. If

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possible, use HRD to prescreen the resumes before they send any to you. Some organizations
will have an HRD person review the applications/resumes and send to you only those
candidates that appear to warrant your further review. This will free you to concentrate on
revenue-producing activities for the company if you are a for-profit firm or other mission-
related activities if your organization is nonprofit or governmental.

In evaluating resumes, use a system with which you are comfortable. Your organization may
have a system already in place which you are required to use. If so, understand that this
system may seem over the top in terms of detail required, but it may have the benefit of
protecting you and the organization from equal employment opportunity (EEO) or
discrimination suits. You may choose to use a matrix to evaluate and rank potential
candidates based on their resume. Whatever system you use to rate the candidates, ensure it is
based on bona-fide job requirements. After your initial review, we recommend putting the
resumes into three stacks:

—Follow-up by you or HRD

—Possibles—if the Follow-up list does not produce a desirable candidate

—Return to HRD for a no-thank-you letter

Whichever method you use, you will arrive at a list of people who have made the second cut
(the first being the ones that HRD reviewed and sent on to you).

4. Call the people in your follow-up stack. To further winnow out potential interview
candidates, we recommend you call the candidates in the follow-up stack and discuss their
interests and capabilities as related to your open position. You can use this call to clarify any
issues the candidates may have and reiterate potential show-stopper job requirements such as
travel or irregular hours (“The job requires about 50% overnight travel. Will that be a
problem?” or “The job will require some evening, weekend and night work. Will that be a
problem for you?”). This phone call will help you avoid wasting your and the candidate’s
time in a face-to-face interview when you and the candidate already know he or she cannot
meet a fundamental requirement of the job. If your call results in this knowledge, thank the
candidate for his or her interest in your organization and wish him or her well in their job
search. Then process the resume in accordance with your organization’s policies.

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5. Setting up the interviews. Now that you have completed your phone screening, you are
ready to invite the candidates in for an interview with you and 2-3 members of your project
team. Set up a convenient time and place for you and your interviewee/candidate. Although
typically held at your office, an interview can take place almost anywhere—restaurant,
airport, hotel lobby or conference room, convention, etc.

Wherever the interview is held, ensure there are no avoidable interruptions, the interviewee is
comfortable and sufficient time is allowed—4-6 hours is typically enough time for a visit to
the organization, with about 45-90 minutes per interview. Be respectful of the interviewee’s
time and don’t keep him or her waiting longer than necessary to see the next person.

6. Preparing for the interview. In order to ensure you gain the information you seek from each
interview, you should plan carefully how you will conduct the interview. This includes
reviewing the Position Description of the job you are seeking to fill and preparing questions
that will help you determine how well qualified a particular candidate is for that position.

In preparing your questions, keep in mind that typically the best indication of a person’s
future performance is his or her previous performance. So you will want to develop questions
that will help you evaluate how well the candidate has performed in previous situations
typical of the ones he or she will face in your workplace. This is called “behavioral
interviewing” because it focuses on the candidate’s behaviors rather than fuzzy indicators
such as gut feel or hypothetical questions that may only reflect how good the interviewee is at
saying what you want to hear.

We recommend you use the STAF technique in formulating your questions and the
candidate’s answers. STAF means:

• Situation

• Task

• Actions

• Final result

The way you use this technique is to ask behavioral-type questions that are related to your job
needs. For example, you might ask a candidate for a mechanical engineering position:

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“Mary, your resume says you have performed several DOE 2.1 energy analyses. Tell me
about one of those analyses.” Tell me about the Situation (e.g., customer and facility), the
Task (e.g., run three scenarios for different HVAC systems), the Actions you took (Actions
are what people do—e.g., plan takeoff, data entry, ran the program for the three scenarios,
evaluated the results and recommended/selected the optimum HVAC system), and Final
Results (e.g., selected an HVAC system that met load requirements and resulted in lowest life
cycle costs for the customer)

Note: In the above example, the items in parentheses are prompts you might use to help the
candidate give you a complete answer. Allow the candidate time respond to your questions—
remember, you have spent time preparing behavioral interview questions and have a good
idea of what information you are seeking. The candidate may have never been asked these
questions. So, allow the candidate sufficient time to recall a specific instance which he or she
can relate to you. You should record the responses to your questions on a form similar to the
example shown in Table 5.3 or another document that you can review at a later date.

7. Conducting the Interview. Now that you have identified the candidates you will interview
and have arranged a mutually convenient place and time, you will want to continue the
careful approach to the interview process that you have already started.

There are several purposes of a job interview:

•Help you and your organization decide if this person is a good fit for the job

•Help the interviewee decide if the job and organization are good fits for him or her

•Foster a positive picture of the organization to those inside and outside the organization

Accomplishing these goals is not difficult. It’s basic common sense and courtesy. In bullet
form, here is a checklist of things you and your organization should do to help ensure they are
achieved:

•Ensure the interviewee is given good directions to the interview location. Provide a map if
appropriate or suggest an Internet web site to obtain directions and a map.

•Help out with flight, car and hotel arrangements.

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•Brief the receptionist that you are expecting “John Doe” and ensure he or she knows how to
reach the person within your company who will take charge of the interviewee first. This is a
critical point in the interview process. The authors have seen too many bad starts to
interviews caused by an organization dropping the ball because no one at the organization
knew the interviewee was coming that day, or simply forgot. It’s not a good way to start off a
potential relationship.

• Follow a procedure similar to that presented in Table 5.3.

Feel free to enter this figure into your word processor to use as a template to help you
conduct a good interview that meets your needs and is considerate of the interviewee’s
legitimate interests also. We recommend you modify it to meet your specific staffing needs.

• At the conclusion of the interview, ensure the candidate knows how to file an expense
report (if not already done so while at your office), thank him or her for their interest in your
organization and for coming to talk to you about the open position. Let them know about
when they can expect to hear from you about your decision. Also, encourage them to call or
e-mail you if they have any follow-up questions that may have arisen subsequent to the
interview.

• Follow your organization’s normal process to extend an offer to the top candidate. Hold off
sending no-thank-you letters to the others who interviewed, in case you do not land the top
candidate, and you need to move down the priority list to make another offer.

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Table 5.1: Job description for Electrical Engineers

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Table 5.2.: Search sources and methods

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Table 5.3: Example of Interview form

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