1 Fundamentals of Project Management: Part 1b APEGGA Annual Conference April 24 & 25, 2003 Dr....

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Fundamentals of Project Management: Part 1b

APEGGA Annual Conference April 24 & 25, 2003

Dr. George F. Jergeas PEng.

University of Calgary

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ScheduleDay 1a Introduction 5-Step PM Planning and definitionDay 1b Estimating cost and

time Video Organize project team Selecting PM and team Effective teams

Day 2 c Project procurement Bidding process Building & sustaining project team Contract administration

Day 2 d Schedule control Cost control Project Close-out Claims and disputes

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5-Step Project ManagementPLANNING IMPLEMENTATION

DEFINE

Identifyproject activities

Estimate time and cost

Quality and Communication management

Write Project Proposal

ORGANIZE CONTROL PLAN CLOSE

State the Problem

Identify ProjectGoal

List theObjectives

Determine PreliminaryResources

Identify Risks and stakeholders

Success criteria

Determine Personnel Needs

Recruit Project Manger

RecruitProject Team

Organize Project Team

Bidding

Assign Work Packages

Define Management Style

Establish Control Tools

Prepare Status Reports

Review ProjectSchedule, cost,team report

Issue Change Orders

Obtain ClientAcceptance

Install Deliverables andCommissioning

Document theProject

Issue Final Report

Conduct Post-ImplementationAudit

Project charter WBS Recruit Criteria Variance Reports Final Report Project network Define Work packages Status Reports Audit Reports Project proposal Assign Work Packages

Decision

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Project Charter Project Name - PM Conference Project Manager:

Problem/OpportunityMembership in PM Association has declined in the past four years and attendance at conference has declined in past three years. The viability and financial stability of

the organization depends on maintaining membership and successful annual conference.

Goal Reverse the downward trend in membership and annual conference attendance

Objectives1. Develop the Program2. Set the Conference Site and Date3. Design and Implement the Marketing Plan

Success Criteria1. At least 50 of previous years conferences attendees will attend2. At least 150 of 450 members will attend3. At least 1.5% of the non-members receiving conference brochure will attend4. At least 5% of the non-member attendees will join PM

Assumptions and Risks1. Interest in PM can be renewed through the annual conference2. A quality professional program will attract members and non-members3. Key speaker(s) fail to show up or submit written paper.

Stakeholders Attendees, Speakers, Hotel, PM Association, Organizing team

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Risk Quantification Technique: High, Medium, Low (HML)

H HHM Impact

L L M H Probability

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STAKEHOLDER

Objective

How They Operate

Where they gain Support

Potential Impact

How to Manage them and plan for

mitigation

Stakeholder Analysis

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Hierarchical RepresentationCONFERENCE PLANNING

SITE MARKETINGPROGRAM

DATE PLACETHEME MATERIALS SPEAKERS LISTS BROCHURE REGISTER

OBTAIN MATERIALS

PREPARE KITS

DESIGN BROCHURE

MAIL BROCHURE

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Estimating Time and Cost

Once the WBS is completed then time and cost estimates for each activity can be started.

With experience this becomes an easier task.

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Time Management

Purpose: Create a realistic schedule with the team

Identify the activities (tasks) Use the WBS and scope statement Develop activity lists and revise

the WBS Sequence activities

Consider dependencies

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Time Management

Estimate durations (time) Top down, bottom up estimates, Monte Carlo

simulations Estimating formulae (PERT estimates) Expert opinion Consider resource capabilities Look at similar projects

Develop the schedule (Gantt chart) Document assumptions and decisions Use project management scheduling software

e.g. MS Project

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Estimating formulae

PERT Estimate (weighted average) [Pessimistic + (4 x Likely) + Optimistic]/6 Pessimistic time to get to work = 30 min Optimistic time to get to work = 10 min Likely time to get to work = 15 minutes PERT Estimate = 30 + (4x15) + 10/6 100/6=16.6 = 17 min

Quick and dirty formula [Worst + best + most likely]/3 55/3=18.3 min

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Estimating Activity TimeOptimistic Completion Time - is the time the

activity will take if everything goes right

Pessimistic Completion Time - is the time the activity will take if everything that can go wrong does go wrong but the project is still completed

Most Likely Completion Time - is the time required under normal circumstances. It can also be the completion time that has occurred most frequently in similar circumstances

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Estimating Activity Time

Time to complete a task is uncertain: Skill levels and knowledge of the

individuals equipment variations Material availability Unexpected events

Illness Employee turnover and accidents

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Estimating Activity Time

We know unexpected events and occurrences will happen but are unable to predict the likelihood with any confidence

We must however account for the possibility of the occurrence of these events

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Estimated times for conference planning

ACTIVITY TIME IN WEEKS(O) (M) (P) (E)

A Set conference date1.0 2.0 3.0 2.0

B Establish theme & program2.0 5.0 8.0 5.0

C Select conference site4.0 5.0 6.0 5.0

D Obtain mailing labels4.0 6.0 8.0 6.0

E Develop brochure3.0 10.0 11.0 9.0

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Estimated Times for Conference Planning

ACTIVITY TIME IN WEEKS(O) (M) (P) (E)

F Obtain mailing labels3.0 4.5 9.0 5.0

G Mail brochure1.0 2.0 3.0 2.0

H Obtain speaker materials3.0 3.5 7.0 4.0

I Receive registrations4.0 6.0 8.0 6.0

J Confirm arrangements0.5 1.0 1.5 1.0

K Prepare conference kits1.0 2.0 3.0 2.0

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Scheduling Activities

Bar chart and RACIProduce a Logical NetworkCritical Path Method

Arrow Diagrams Precedence Diagrams

Identify Critical ActivitiesLocate the Critical PathFloats

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Bar Charts/Gantt Chart

Most projects, however complex, start by being depicted on a bar chart. The principles are very simple:

Prepare list of project activities Estimate the time and resources needed Represent each activity by a bar Decide logical sequence Plot activities on a chart with horizontal time

scale showing start and end

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Project Schedule - Sample

ID Task Name Duration

1 Develop the Program 0 days

2 Theme 1 wk

3 Obtain Material 4 wks

4 Speakers 3 wks

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6 Conference Site 0 days

7 Set date 1 day

8 Select site 1 day

9 Confirm Arrangements 1 day

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11 Marketing 0 days

12 Obtain lists 2 wks

13 Design brochure 2 wks

14 Mail brochure 4 days

15 Register participants 8 days

3/1

3/1

3/1

2/27 3/5 3/12 3/19 3/26 4/2 4/9 4/16 4/23 4/30 5/7March April May

Project: ____________________ Project Manager: ____________________ Date: _____________

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RACI Charts

Responsible - Accountable - Consulted - Informed Identify the roles of participants in

each element of a project Effective communications road map 4 to 8 weeks look ahead

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RACI Charts

Update weekly to: Reset expectations Ensure right people involved in detailed planning

Ensure everyone knows what needs to be done by whom

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RACI Chart

2

1

Informed

ConsultedAccountable

Responsible

Task

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Deliverable:_____________________ Manager:___________________ Project:_________

ACTION DATES

ActivityAnother activityBuild something

Another ItemYet anotherDesign a bitDesign moreSneezeGesundheitAnother thingWait for itemMore stuffFinish

A C G C F M J W B D M H F W L S W ER A A C I I - I C 120 400- R C I A A I A - 50 50R - A C I I - C - 345 1,500- R C I A A I A - 127 -R A A C I I - I C 90 9,000R - A C I I - C - 55 1,700

- A R I C C A I I 455 875R C A A I C I - - 200 7,785- R I I C - - - - 65 -

A C R - C I C - - 20 100,000- I C A A R I A I 655 -R A - I C I A A A 80 -A I C I I A A A R 12 100

Budget Actual Budget ActualW/Hrs. W/Hrs. Cost Cost

2.4.5 Major Element Amelia Drover Fred 2-5

RACI Charts (F. T. Hartman, 2000)

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CPM: Critical Path Method

Graphic network based scheduling technique Arrow Diagrams Precedence Diagrams

Use activities created by the WBS process

Analysis of timing and sequencing logic Aids in identifying complex interrelationship of

activities

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CPM: Critical Path Method

Allows for easy revision of schedule and simulation and evaluation of the impact of changes

Also used as a control tool during execution of the project

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Producing a Logical Network

The sequencing identifies activities that must be completed before another activity can start and which activities can occur simultaneously. Different methods:

1. “Low-tech” approach: use post-it labels Each label has one activity written on it Through iterative process the labels can be

arranged and rearranged

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2. Ask yourself the following: Which activities must be completed

before this activity starts? Which activity cannot start until this

activity is completed? Which activities have no logical

relationship with this activity and therefore take place at the same time (concurrent activities)?

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3. Identify immediate predecessor activities, which are activities that must be completed before another activity can begin

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Activity Sequencing: Training Example

ACTIVITY IMMED. TIME(WEEKS)PREDECESSOR (E)

A Set conference date - 2.0B Establish theme/program - 5.0C Select conference site A 5.0D Obtain speakers B 6.0E Develop brochure C,D 9.0F Obtain mailing labels C,D 5.0G Mail brochure E,F 2.0H Obtain speaker materials D 4.0I Receive registrations G 6.0J Confirm all arrangements H,I 1.0K Prepare conference kits J 2.0

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start

b d

a c

f

e

g i

h

j k end

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Start

b5 d6

a 2 c

f5

e

g i

h4

j1 k2 End

0 2 2 7 11 20

5 9 20 22 22 28

2 6 28 29 29 31

4 6 6 11 11 20

20 22 22 2811 16

0 5 5 1111 15 28 29 29 31

0 5 5 1124 28

15 20

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Critical Path

The longest path is the Critical PathCritical path is where there is zero

slack timeIf an activity takes longer than

estimated on the critical path then the project will be delayed

The critical path can change if there is a delay that make an alternative path longer

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Float (Slack)

Slack or float time is amount of delay that could be tolerated in the start or completion time without causing a delay in completion of the project

Total float or calculations to determine how long each activity could be delayed without delaying the project

Total float = LF - ES - duration

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Should be able to:

Develop a complete project plan: WBS listing all activities Project organization and communication Project schedule using Post-it notes and

bar charts RACI Chart(s)

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Video

The Power of scheduling

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Plan the Project: Basics of Cost Estimating

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DEFINE






State the Problem


List theObjectives



Success criteria



RecruitProject Team


Bidding






Issue Change Orders



Document theProject

Issue Final Report



Decision

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Introduction

Cost estimates:

Key to successfully conceived, managed and completed projects

An approximation procedure Mistakes can be very costly!

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What is a Cost Estimate?

AACEI Definition “A compilation of all the costs of the elements of a

project or effort included within an agreed upon scope”

To the contractor “To forecast cost required to complete a project in

accordance with the contract, plans and specifications”

To the owner cost includes: Administering the contract Contractor's charges, consultants and suppliers fees Price of land, financing and operating costs

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What Constitutes a Good Estimate?

A clear, sound basisAn agreed upon realistic

execution planGood estimating methods and

data baseGood experienced estimator

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Order - of - Magnitude Estimates

A quick method of determining an approximate probable cost of a project due to the following specific situations: Time constraints High cost of a detailed estimate

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Order - of - Magnitude Estimates

Prepared without detailed engineering data Square feet of floor area Cubic feet of volume Plant capacity for input and output Km of road surface type

Use: In feasibility studies of a project and screening several types of alternatives or proposals

Accuracy: +/- 30%

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Definitive Estimates

Prepared from very defined engineering dataRequires as a minimum:

Plans and elevations Piping and instrument diagrams Single line electrical diagrams Equipment data sheets and quotations Architectural and structural details Soil data and sketches of major foundations A complete set of specifications

Accuracy: +/- 5%

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Components of a Cost Estimate

Direct Cost Labour: actual amount paid to field

personnel Materials: essential to constructing and

operating a facility including equipment installed permanently

Equipment: used to perform a contract Subcontracts

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Components of a Cost Estimate

Indirect Costs Overhead

Home office overheadSite overhead

Taxes Risks

ContingencyProfit

Escalation

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Profit

Is the amount of money included by the contractor in its price as compensation for risk, effort and endeavor in undertaking a project. It is the money left after a contractor has met all

costs (both indirect and direct). Profit amount included is very subjective and

depends on:Size of projectExtent of risk involvedNeed for workExtent of competition

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Contingency

An amount added to cover any additional costs that may occur. To determine the amount of

contingencies desirable, an estimator should rely on:Personal judgment, orThrough statistical analysis of past project

costs

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Training Example: Estimated Conference Planning BudgetCONFERENCE PLANNING

$243,325

Program

$41,100

Site

$170,425

Marketing

$31,800

Theme

$600

Materials

$13,300

Speakers

$27,200

Date

$1,000

Location

$169,425

Lists

$2,000

Brochure

$29,800

Registration

3 conf calls with pgm comm

Travel/expenses for 16 speakers @ $500 per speaker

Deposit3 site visits @ $800/visit food @$50 per person/day for 3 days for 1100 meeting rooms @ $225/day/room for 3 days for 3 rooms

25,000 labels @ $80/1000

Obtain Speaker Materials $800

Prepare Conference Notebook $12,500

Design Brochure $12,800

Mail Brochure $17,000

Edit/format @ $50/speaker

1100 binders @ $5/binder photocopy materials 350,000 pages @ $0.02/page

Layout: 16 pages @ $50/page

Printing: 30,000 copies @ $0.40/copy

25,000 pieces @ $0.68/piece

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Writing a Project Proposal

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DEFINE






State the Problem


List theObjectives



Success criteria



RecruitProject Team


Bidding






Issue Change Orders



Document theProject

Issue Final Report



Decision

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Writing a Project Proposal

Represents the transition from the planning (define, plan) to implementation (organising, control, close)

Used as an information source to decide whether the project should proceed to the implementation phase

Different terminology used DBM, Brief, Scope Definition Statement

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Purpose

The project proposal provides:A statement of the need, the approach

being taken and the expected benefitsDescription of project activities,

timelines and resources requiredProject costsDocumentation for project controlBriefing document for new team

members and others in the organisation

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Purpose

Tool for decision making, managing, controlling, training and reporting

Written for: Senior management Project team Other managers who are indirectly

involved Consultants

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Step 3. Organising the Project Team

Projects are only as successful as the project manager and team who implements them

Building an effective team takes a lot of work

Must consider more than just a person’s technical skills

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Organising the Project Team

The selection of team members is based on skills, availability and personality

There needs to be a commitment and chemistry among the team members

Team building is not a perfect art, there is always the risk of conflict

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Organized and located to facilitates open continuous communication This does not mean they have to be

physically located together

Team members may be reallocated for the duration of the project or remain in their function areas

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Large projects Dedicated core team Structured More defined roles Need for open and continuous

communication lines Self contained

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Small projects Part-time commitment from team

members Team members remain in their

functional units Conflicting priorities/demands exist Conflicts may arise from having more

than one boss or more than one team involvement

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Be sure all parties understand the need to: Build the team What the priorities are within in the

organisation and Their assistance is appreciated

Project manager to ensure that the cross functional relationships are maintained and supported

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Opening a Project

Owner schedule a kick-off meeting: Meet contractor and other key personnel Identify areas of responsibility Establish job philosophy (set the ground rules) Set up requirements for on-or off-site meetings and

set the frequency of such meetings, who should attend Discuss problems anticipated in execution Discuss special sequence of operations or scheduling

limitations

Issue written Notice to Proceed Set precise start date - good practice

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Characteristics of an Effective Project Manager

Understands purpose of the project

Has the necessary background and experience

Effective leader with proven managerial ability

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Characteristics of an Effective Project Manager

Communication skills Consistent behaviour Has credibility with team and client Sensitive to project and corporate

politics Excellent Facilitator rather than a

dictator

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Selection of Project Manager

Key position on the project Selection of appropriate individual is

essential to success of the project

Selection criteria should be established based on the skills required to carry out project

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Project Manager Selection Criteria

1. Background and Experience Should be consistent with the nature

and needs of the project Education should be compatible with

nature and expectations of the project Look for a individual with a mix of

conceptual, analytical, operational and practical experience

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2. Leadership Ability to design, co-ordinate, control

and implement project plan Stay the course until completion Ability to see the big picture and

understand the details

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3. Technical expertise

Ability to direct, evaluate, and make decisions on technical alternatives

Does not and can’t be an expert in all areas of the project

Should have expertise in project management, team management and training

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4. Interpersonal skills

Should be able to: Motivate, inspire, and coach Actively listen, give and receive feedback Empathise, relate feelings, needs and concerns

in a positive manner Prevent and resolve conflicts, negotiate Keep team, senior management and

stakeholders informed through effective communication channels

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5. Proven Managerial Ability

Good track record, excellent indicator of the future

Knowledge of the organisation and its operation

Ability to effectively interface with all levels of the organisation

Ability to link project goals to corporate mission and goals

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Selecting the Team

Selection of team members depends on a number of factors: Nature of the technical work to be done Level and type of expertise required at

each phase of the project Availability of staff in the organisation

and reporting relationshipsSometimes you cannot always choose

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Team Selection Criteria

Similar to those of the project manager

More emphasis on the technical skills

Interpersonal skills essential Ability to function as a team member

with shared goals and objectives (us instead of me)

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Effective Team Characteristics

Commitment to the project goals and completion

Ability to communicate, share responsibility and power

Flexible willing to change or try some new methods

Technically competent Willing to:

Admit mistakes Admit not have all the answers Accept feedback

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Effective Team Characteristics

Politically astute Team players Creative and open to suggestions High self esteem, can do attitude Willing to work for more than one

boss, across formal structure and authority system

Results oriented

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What Makes Teams Work

Successful Projects:The team has fun Have the support of senior

management Everyone understands the reason for

the project Conflicts are addressed and dealt withThe entire organisation is committed

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What Makes Teams Work

Successful projects:Team understands the organisation’s

mission and how the project fits within that mission

Team understands what is to be achieved and when it is achieved

Trust and communication

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Human Resources Management Tips

Listen to understandBe responsive

Provide positive feedback Act on problems in a timely manner

Deal with problems They won’t go away, but will get BIGGER

Provide constructive criticismDocument appropriatelyTake time to have FUN

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