Chapter 5 - Human Resources...

Chapter 5 - Human Resource Management

1Communication CycleCommunication Cycle


2Challenges of Managing People

Table 5.1 The Challenges of Managing People in Construction Industry

Nature of Industry’s products and services (pg. 2-3)

The project based nature of construction activity and devolution

of the hrm function to the project manager (pg. 4)

The variable demand for construction products and services (pg. 5)

The shrinking labor market & image of the construction sector (pg.6)

Employer turnover and retention (Pg. 7)

Subcontracting and self-employment in construction (Pg. 8)

Training, employee development and knowledge creation

Communication (Pg. 9)

Employee relations

Equal opportunities and diversity

Health, safety and welfare

1

2

3

4

5

10

9

8

7

6

11


3Nature of Construction Industry

Unique, one-off nature

Unlike other sectors, where prototypes can be tested

before real production gets underway

Lead to significant risks for workers, largely arise from

learning-curve problems associated with:

new work activities, and

ever-changing workplace relationships

Tendency to be awarded at short notice

The resourcing function may need to respond to sudden

changes in workload

No guarantee of how much work will be being undertaken at

any particular time


4Nature of Construction Industry

Reliance on a transient workforce

Constructed in situ

Necessitates the employment of a transient workforce which

can move from one project to the others.

Transient workforce poses many problems for workers:

More expenses in traveling to work and managing work-

life balance issues

The composition of teams normally changes during

different project stages

Longer working days

Increasingly demanding clients

A male-dominated culture


5The Devolution of HRM Function

Figure 5.1 The Devolution of HRM function to The Project Manager

Nature of

Construction industry

Human resource

management

function

To:

Project managers

- More Focused on technical and financial

aspects than human resource factor

- Lack of knowledge about human resource

management

- No time for training

- Three main constraints: time, cost and quality


6Variable Demand for Construction

Figure 5.2 The Variable Demand for Construction Products and Services in Relation to Economy Activity

Construction industry

Construction use more workforce on temporary contracts or as

subcontracted labor

Very difficult for companies to retain directly employed workforces

and make long-term investments


7Construction Image Vs Shrinking Labor

Figure 5.3 The Shrinking Labour Market and The Image of Construction Sector

No interest in

construction as a career

shrinking of

labor market in

construction

Bad image of

construction sector

- The site-based and hence itinerant work patterns

- The poor on-site working conditions, health and safety record and employee welfare

- The male-dominated and discriminatory ‘macho’ culture


8Subcontracting & Self-Employment

Figure 5.4 Advantages and Disadvantages of Subcontracting and Self-Employment in Construction Industry

many

Subcontracting and

self-employment

in construction industry

- Less to have well-developed

operational HRM policies

- Less to manage occupational health

and safety risk

advantages

disadvantages

- Favorable tax reforms

- To avoid fluctuating

workloads


9Communication

Figure 5.5 Communication in Construction Industry

communication


Managers

Vs.

Workersin different parts of the organization, particularly project staff and

central HRM departments

Managers

Vs.

External interest groups such as governments, pressure groups, local

communities and unions

internal

External


10Maslow Theory

Figure 5.6 Hierarchy of Needs (Abraham Maslow)

Physiological Needs

Safety Needs

Belonging Needs

Esteem Needs

Self-Actualization

Deficit Needs

Being Needs

(1908-1970)


11Douglas McGregor Theory

Figure 5.7 Theory X and Theory Y (McGregor)

Theory YTheory X

- Dislikes work and attempts to

avoid it

- Has no ambition, wants no

responsibility, and would

rather follow than lead

- People who is self-centered and

therefore does not care about

organizational goals

- Resists change

- People who is gullible and not

particularly intelligent

- Work can be as play and rest

- People will be self-directed to

meet their work objectives if

they are committed to them

- People will be committed to

their objectives if rewards are

in place that address higher

needs such as self-fulfillment

- Under these conditions, people

will seek responsibility

- They can handle responsibility

because creativity & ingenuity

are common in the population

VS


12Definition of H R M

‘Human Resource Management (HRM) emphasizes the development of the

management team (with line management having responsibility

for employee-related issue) and has a more strategic emphasis

(i.e. is considered as a senior management activity)’

Legge, 1989

‘Human Resource Management (HRM) is a managerial perspective, with

theoretical and prescriptive dimensions, which argues for the

need to establish an integrated series of personnel policies

consistent with organization strategy, thus ensuring quality

of working life, high commitment and performance from

employees, and organizational effectiveness and competitive

advantage’

Huczynski and Buchanan, 2001


13Definition of S H R M

‘Strategic Human Resource (SHRM) is concerned with the development and

implementation of people strategies which are integrated with

corporate strategies and ensure that the culture, values and

structure of the organization and the quality, motivation and

commitment of its members contribute fully to the achievement

of its goals’

Armstrong, 1991

Difference between HRM and SHRM

HRM : it emphasis on relationships between people,

structures, strategy and the environment external to the

organization (Fombrun et al. 1984)

SHRM : it comprises a set practices designed to maximize

organizational integration, employee commitment,

flexibility and quality of work (Guest, 1987)


14Definition of S H R M

According to Mullins (1999), these activities below are a part of SHRM implementation in construction industry

Designing an effective organization structure

Staffing the structure with suitable people, it also known

as employee resourcing

Recruitment and selection

Deployment and team formation

Performance management

Retention and training

Career development

Dismissal and redundancy

Managing the employment relationship effectively

Taylor, 1998


15Developing SHRM Strategy

According Anthony (1996), six key characteristic of a strategic HRM approach must be complied to provide

a framework of requirements for SHRM formulation :

Recognizing and responding to the environment

Recognizing and responding to labor-market dynamics

Considering all organizational personnel

Taking a long-range view

Focusing on choice and decision-making

Integrating SHRM with overall corporate strategy


16Formulating SHRM Strategy

Table 5.2 Example of Human Resource Strategy Formulation Matrix (Armstrong, 1991: 86)

core competency area

management system as azero-defects cultureimproved performance

the performanceof quality targets andbusiness throughManagement

Build in IT literacy to Reward the achievementRewards for repeat Performance

project-based staff

for operations staffline management andbusiness developmentDevelopment

Specialist IT training TQM training for allCustomer care andTraining & Staff

skills in existing staffmanagersneedsRequirements

Retain and develop ITRecruit qualitySpecialist skills Resource

organizational approacheswith niche markets

alignment ofdivisions for coping

the integration andthe quality managerand specialist sub-

divisions to ensure and defined roles fordivisional structureStructure

IT specialists withinProduct specializationDevelop a fluid Organization

of ICTon QualityExpansion

Increased UseIncreased EmphasisMarket Share


17Manager’s Attitude

Figure 5.8 Manager’s Attitude Towards People in Construction Industry

Manager’s attitude towards people


Manager Focus onthe task rather than the people doing the task

Managers Focus on People rather than job & recognize their

needs are not completely satisfied by monetary rewards

Task oriented

People oriented

For non-routine, complex task with low

technology, un-mechanized procedures in

an uncertain, ever-changing environment

For routine, stable environment with

highly mechanized technology (e.g.

scientific, mechanistic)


18The SHRM Cycle

Figure 5.9 The Strategic Human Resource Cycle in Construction Industry

Local/national Government Regulations

Reward

management

Human resource

development

Organizational objectives

And employee expectations

Employee

resourcing

Labor Markets Pressure Groups

Technology Competitors Economy


19Employment Relationship

Figure 5.10 Types of Employment Relationship

78

Employment relationship

Formal Employment contract Psychological

contract

Six areas of mismatch between a person and his or her job that can lead

to disengagement and reduced organizational effectiveness

- Work overload - Breakdown of community

- Lack of control - Absence of fairness

- Insufficient reward - Conflicting values

According to Maslach and Leiter (1997)


20Employee Resourcing

Figure 5.11 Activities of Employee Resourcing

78

Human Resource Planning

Recruitment and

Selection

&

1

2

- Needs analysis

- The evaluation of current resources

- Job analysis

- The analysis of internal availability

- Analyzing employee turnover and throughput

- Preparing job descriptions &

specifications


21Human Resource Development

1. Orientation program

2. Staff training and development

On the job training

Common training (lectures/discussion)

Job transfer or rotation

Mentoring or coaching

Intranets

Off the job training

3. Performance management

Plan goals, targets and standards

Monitoring progress

Providing support where necessary (coaching and/or

counseling for poor performance or praise, recognition

and increased responsibility for effective performance)


22Human Resource Development

4. Management development and career management

Identify the nature of career-progression dynamics within

an organization

Identify certain individuals who has reached a plateau in

their development

Identify training and development needed

5. Performance appraisal systems

Establishing the performance criteria

Who, when and how often


23Reward Management

Figure 5.12 Types of Rewards in Construction Industry

Intrinsic Rewards

&

1

2

Extrinsic rewards

- Tangible rewards

- Such as: salary, bonuses, commissions payments, working

conditions, company cars and pensions

- Intangible rewards

- Such as: lifestyle, comfort, a sense of achievement, status, acclaim,

challengeTYPES

OF REWARD


24Elements of Human Resource

Figure 5.13 Elements of Human Resource To Be Considered in Managing This Area

Element of human resource

To be considered

Time to managebenefits

Salaries fees

- Paid leave- Life and health

insurance- Retirement plans- Training - Supporting, etc.

- Skill set

- Expensive or Cheap ?

- Fallout with other

employee- Time to manage- Maintenance

- Charge of recruiters

(specialist)


25Human Resource Planning

Figure 5.14 Human Resource Planning

Analyze the distribution of typical labor

1

2

Estimate the types of labor, time period and quantity

- Factors that influence the labor productivity

- Method to estimate the labor needed for each phase

of project

1

Finding the source based on their quality and quantity

3


26Productivity

Unit :

Man-hour, man-month, etc.

Productivity Index :

X : Real amount of man-hour to finish an activity.

Y : Needed amount of man-hour to finish the same activity in

standard or normal situation.

IP =X

Y


27

Factors influence the productivity :

Geography location (site situation), weather, tools, cabin

for workers

Project size

Skills

Experience, learning curve

Overtime works should be no more than 40 hours per week

Supervising, planning and cooperation

Rules

Types of workers (permanent workers or subcontractor)

Productivity of subcon (5-10%) > than permanent workers

Cost of subcon > than cost of permanent workers

Productivity


28

Density of workers

:Area for each worker

It depends on technical complexity of the project and

types of contract.

Composition of workers (labor mix)

The composition of supervisor and workers

The composition of workers in a group for each activity

or work.

Productivity


29


30

Table 5.3 Example of Labor Mix in a Project

Productivity

Oil compa ny (%) P u l p (%) G a s C ompa ny (%)

Carpenter 8.2 10.9 8.2

Blacksmith 6.2 7 5.3

Piping workers 40.9 25.5 38.7

Mason 1.1 2.5 1

Electrician 10.2 17.6 13.8

Helper 12.8 4.2 12

Operational Engineer 7.6 10.8 5.6

Etc. 13 21.5 15.4

Total 100 100 100

T y pe s of p r oj e c tT y pe s of wor k e r


31Productivity

Productivity profile in general :

Mobilization period (10 - 15 % of total project period)

: productivity drops for about 10%

Upward period : productivity increase

Peak period : optimum productivity

Downward period : productivity drops once again

It can be caused by:

Improper planning

Psychological attitude

Slow demobilitization


32

Figure 5.15 Productivity Profile of Human Resources in a Project

ProductivityProductivity index

% completion time

0 10050

0.4

1.2

0.8

Mobilization

upward

PEAK

downward


33Estimation of Quantity

Figure 5.16 Estimation of Human Resource Quantity

Practical

2

Theoretical

1

Average quantity of labor

needed

= Total quantity of labor

Project duration

0 5 15 2010

Quantity (man)

Average Quantity = 350 man

Duration (month)

Total Quantity = 7000 man-month

350

Project Finish


34Resources at Peak Period

Peak period

: a busiest period of time where human resources needed is on

maximum capacity.

amount and time period of human resources needed is very important to be known for planning:

The capacity of worker’s place

Transportation

Project cash flow

Methods for estimating the need of human resources in peak period

1. Bell graph

2. Trapezium method


35Bell Graph

Disadvantage

It can only show the need of human resources in peak

period of time

Steps to determine the human resources in peak period of time:

Determine the average quantity of human resources needed

along project duration (= AB = CD)

Sketch the bell graph

The need of human resources in peak period (= OE)

= 1.5 – 1.7 x average quantity of human resources

The total human resources needed in a project

= area of ABCD = area of AED


36Bell Graph

Table 5.17 Determination of Human Resources Needed using Bell Graph

Amount of workers

Period (month)

0 105

200

1000

800

600

400

Front Loaded Back Loaded

A

E

B

D

C

O


37Bell Graph

Example 5.1

A government office building is estimated to finish in 10

months period of time. Considering the human resources needed

in this project, 5000 people will work along the time.

Determine the average quantity needed every month

Sketch the bell graph

Determine the amount of human resources needed in peak

period


38Bell Graph

solution 5.1

Average quantity of human resource in a month

= 5000 : 10

= 500 man-month

Quantity of workers

Period of time (month)

0 105

200

1000

800

600

400

The quantity of human

resources in peak period

= 1.6 x 500 man-month

= 800 man-month


39Trapezium Method

Advantages

: it can be used to estimate the quantity of human resources

needed and also its peak period of time.

Profile of human resources needed (trapezium method) :

Build up period

Peak period

Run down


40Trapezium Method

Design stage

Figure 5.18 Profile of Human Resources Needed using Trapezium Method

Construction

stage

quantity

durationA

B

C

D

a = 20% b = 20% c = 60%

C

A

B C

Da = 50% b = 25% c = 25%

0 2010 30 40 50 60 70 80 90 100

quantity

duration


41Trapezium Method

Example 5.2

In a construction project, it has been known that the total

of human resources needed in 30 weeks is 24.000 man-hour. If

effective work hour in a week is 40 hours, determine the

quantity of human resources need in design stage and its

period of time.


42Trapezium Method

Solution 5.2

Effective hour : 40 hours per week

Peak period of time

= BC = 6 weeks

quantity

Duration = 30 weeksA

B

C

D

6 weeks 6 weeks 18 weeks

C

t

Total duration = 30 weeks

a = 20%

= (20/100) * 30

= 6 weeks

b = 20%

= (20/100) * 30

= 6 weeks

c = 60%

= (60/100) * 30

= 18 weeks

Human resources in peak

period = t


43Trapezium Method

solution 5.2

Quantity of human resources per week

= 24,000 man-hour

30 x 40 hour

= 20 workers per week

Total of human resources needed = area of trapezium

= 24,000 man-hour

= 24,000 man-week = 600 man-week

40

Human resources in peak period

600 = 0.5 t (30 week + 6 week)

t = 66.7 workers per week


44Human Resource

Construction workers :

Supervisor (5-10%)

Labor

Type of workers based on relationship with contractor:

Direct hire

Labor supplier

Problem faced with contractor

In a period of time where quantity of works is not in

maximum condition, it will be a waste to have a large

amount of workers along the project duration.

In contrary, where quantity of works is in maximum

condition, it is not easy to find construction workers in

a short time.


45Human Resource

TO overcome this problem:

Multi-craft system

A worker is trained and upgraded in terms of knowledge and

skill. The objective is to produce workers who can be an

expertise in variety of works.

Resource leveling

Adjusting the schedule of works which have a float, so

that the change does not interrupt the total project

duration.


46Resource Leveling

Resource leveling

The reallocation of total or free slack in activities to

minimize fluctuations in the resource requirement profile.

The Resource leveling can be shown on graph

Create a graph representing the need of human resource in

correlation with time or period

Find the critical path and float for each activity

Sketch the need of human resources for each activity

Adjust the need of human resources based on its float. The

need of human resources in critical activities can not be

modified.

Try to adjust until there is no steep fluctuations


47Resource Leveling

Figure 5.19 Typical Project Resource Profile

- At a time, the resources

needed are higher than what is available in maximum

limit

- ‘Hurry up and wait’ effect

- Excessive expenses due to overtime, training and

hiring or firing

- Frequent assignment and

priority changes for team

membersDuration

Resources

Maximum limit


48Resource Leveling

Resource Demand Compared to Resource Availability


49Resource Leveling

Example 5.3

A project consists of seven activities which are arranged as

a network in Figure 7.19. The resources that needed in each

activity are as follow:

Activity A = 20 person per day, for 6 days

Activity B = 15 person per day, for 3 days

Activity C = 15 person per day, for 3 days

Activity D = 10 person per day, for 3 days

Activity E = 15 person per day, for 3 days

Activity F = 35 person per day, for 3 days

Activity G = 5 person per day, for 3 days

Do a resource leveling in this project.


50Resource Leveling

3AF

3-C

3-B

6-A

3BE

3FG

3CD

DurationsPredecessorActivity


51Resource Leveling

Figure 5.20 Network for Example 6.1

B1

0

0

33

93

43

9

26

6

59

9

612

12

A

C

F

G

6

3

3

3

E

3

D

3


52Resource Leveling

Figure 5.21 Network for Example 5.3

0 2 4 6 8 10 12

DURATION (DAYS)

10

30

40

20

50

Human Resources (person)

A

B

D

F

C

E

G


53Resource Leveling

Figure 5.22 Network for Example 5.3 After Resource Leveling

0 2 4 6 8 10 12

DURATION (DAYS)

10

30

40

20

50

Human Resources (person)

A

B

D

F

C

G

E


54Resource Leveling


55Resource Leveling

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