This chapter is based on our:

• Analysis of the needs of the project-oriented organization, and particularly the temporary nature of the work processes and the dynamic nature of the work environment;
• Review of the project management, general management, and human resource management literatures; and
• Prior work.

We propose that project-oriented organizations will require both additional and different HRM practices and processes than those suggested by the traditional HRM theory, based on the large, classically managed organization, as follows:

• Additional processes specific to the project and programs they adopt to undertake their work. Projects and programs are temporary organizations, and so HRM practices and processes will be required specific to those organizations.
• Different practices to deal with the dynamic nature of the working environment in the project-oriented organization.
• The dynamic nature of the work environment will also create additional stresses for employees, as the demands for different projects peak together. There can also be uncertainties about future work environments and work colleagues, which can create further stresses.

In this chapter we describe our research methodology. First we describe the epistemological approach adopted, and then we describe the steps in our research project. We conclude by describing the research model that influenced our thinking, although we had to be very careful that it did not constrain our thinking.

AIMS AND APPROACH

We undertook this research project with the dual purpose of:

1. Exploring if, and to what extent, the distinctive characteristics of the project-oriented organization led to the need for specific HRM practices.
2. Considering the implications for organizations, projects, and individuals of these emergent practices.

We adopted a radical, constructivist approach to our research (von Glasersfeld, 1995). This means we formulated a set of hypotheses or proposals. Then after each stage of our research, we met to discuss what was learned from the work just completed, and to develop and update our hypotheses accordingly. The first two sets of proposals were developed during the previous research projects (Huemann, Turner, and Keegan, 2004a), and four more sets were developed during this project as follows:

1. December 2003: The first set was developed at the start of the previous research project
2. July 2004: The second set was developed at the end of the previous research project and was presented at the PMI Research Conference in London in July 2004
3. June 2005: The third set was developed for the proposal submitted to PMI for this research project and was taken as the starting set of hypotheses for this project.
4. January 2006: The fourth set was developed following the literature review and was presented at the IRNOP VII Conference in Xi'an China (Huemann, Keegan, and Turner, 2006).
5. May 2006: The fifth set was developed after the interviews.
6. March 2007: The fifth set was developed in March 2007 following the final case study.

All six sets of hypotheses are provided in Appendix B. The following set was used as the starting point for this research project, developed in June 2005:

Hypothesis 1: HR management is a core process of the project-oriented organization, and of the classically managed organization. However, because every time a new project is created the HR configuration of the organization changes, it is more invasive in the project-oriented organization. This is not yet recognized by many project-oriented organizations.

Hypothesis 2: Because every time a new project is created the HR configuration of the organization changes, the environment in a project-oriented organization is more dynamic and discontinuous. This creates different needs for HRM in the project-oriented organization. This is not yet widely recognized, but where it is, different processes are being adopted.

Hypothesis 3: The project-oriented organization needs additional processes for HRM, particular assignment to projects, development within projects, and dispersion after projects.

Hypothesis 4: The project-oriented organization needs different practices for HRM; different practices within the traditional processes of recruitment, development, deployment, and release; and different practices within the additional processes of assignment to projects, development within projects, and dispersion after projects.

Hypothesis 5: The role of the HR department continues to be setting policies, standards, rules, and guidelines for HRM; delegating the operation to those parts of the organization where the decisions have the greatest effect (under a principle of subsidiarity); and providing support in their operation as necessary. However, the policies, standards, rules, and guidelines need to reflect that different processes and practices are required.

The final set of hypotheses is given in Chapter 7 as an introduction to the overall conclusions of our research.

PROCESS

Our research was conducted in four stages, Figure 4-1:

Phase 0—Review of the Literature on Project-Oriented Organizations

First we reviewed the literature on the project-oriented organization to identify pressures in that work environment which might require new or different HRM practices. This work commenced as part of our prior work, so at the start of this project it remained only to finalize our findings into a set of proposals. The findings of this phase are described in Chapter 2.

Phase 1—Review of the Management Literature

Next we reviewed the literature on the subject of HRM in project-oriented organizations. We reviewed journals and books from the project management literature, the general management literature, and the HRM literature. The journals we reviewed included the following:

• In the project management literature: International Journal of Project Management, Project Management Journal, Construction Management and Economics, Engineering, Construction and Architecture Management, IEEE Transactions in Engineering Management, Journal of Management in Engineering.
• In the general management literature: Administrative Science Quarterly, Academy of Management Journal, Academy of Management Review, Journal of Management Studies, Organization Studies, Organization.
• In the HRM literature: Human Resource Management, Human Resource Management Journal, International Journal of Human Resource Management and Personnel Review; Human Resource Planning. Employee Relations.

Using the online system Scopus (www.scopus.com), developed by Elsevier Science, the publishers of the International Journal of Project Management, and the online database of the University of Amsterdam, which includes Business Source Premier and JSTOR, we were able to search using keywords through thousands of journals. We cannot guarantee we discovered every paper on the subject of HRM in the project-orientated organization, but we can be reasonably confident we found most. We did not find many papers on the subject. The findings of this second phase are described in Chapter 3. Based on the findings of the first two phases, we also developed a research model, which we describe in the next section.

Phase 2—Interviews

Thirdly we conducted qualitative, semi-structured interviews with HR managers, project office managers, project, program and portfolio executives, and project managers from POCs in different countries and industries. We interviewed 22 people from 13 companies. The interviews are shown in Table 4-1 with the names of the companies kept anonymous. The companies (units) interviewed varied in their maturity as project-oriented organizations, but they mainly had a relatively high maturity. All of them except one had a project management office (PMO) or similar structure. To make the results of interviews comparable and to ensure a transparent and high-quality interview process, we developed a common interview guide (Patton, 1987), which was applied to all interviews. The interview guide is shown in Appendix C. We used purposive sampling to identify information-rich respondents on the topic of HRM in POCs (Cresswell, 1994; Patton, 1987). We also used maximum variation sampling (Strauss and Corbin, 1990) at this point by seeking a wide range of project-oriented companies, and thus likely to vary in terms of project management maturity. In line with the research approach described above, we sent interview accounts to respondents after each interview and asked them to check our accounts and suggest refinements or changes to ensure as far as possible the internal validity of our study. Key earning messages from the companies interviewed are given in Table 4-2.

Phase 3—Case Studies

Finally we conducted four, in-depth case studies in companies with medium to high project management maturity. We selected four organizations from a range of industries, from both the public and private sector. The four companies are shown in Table 4-3. Again we have tried to preserve their anonymity. From these companies, we interviewed a range of people including:

• Project team members
• Project managers
• Managers of large and major projects
• Program managers
• Portfolio managers
• Project office managers
• HR managers
• HR directors

We also inspected relevant documentation. We prepared a protocol to invite potential case study companies to participate. The case study protocol is shown in Appendix D. Key learning messages from the case study companies are given in Table 4-4.

RESEARCH MODEL

Based on our findings from the two stages of the literature search and our prior research, we developed a model of what we thought HRM might look like in the project-oriented organization. There are two elements to our model:

1. Where we expect to see HR practices: As in any organization, we expect to see HRM practices in the line organization. However, given the needs of the project-oriented organization, we expected to see a different application of these practices than in a classically managed organization. Given that the project is a temporary organization, we also expect to see HRM practices specific to the project. We would not expect to see these practices specific to the project in a routine, classically managed line organization. Figure 4-2 shows a very simple model of HRM in the classically managed organization, and Figure 4-3 shows an equivalent model of HRM in the project-oriented organization, showing HRM practices in the line and HRM practices specific to the project. It should be noted that although this latter set of practices are specific to the project, they may be performed in the line. Particularly, assignment to the project starts in the line and dispersement ends in the line.
2. What practices we expect to see: There are many views for the HRM practices in any organization, with potentially quite extensive lists. Boselie, Dietz, and Boon (2005) conducted a survey of the HRM literature to identify what HRM practices have been identified by the HRM community, and how often the different practices are studied. We have decided to limit ourselves to a reduced list of the most commonly studied practices:

• Selection and recruitment to the organization
• Appraisal of performance
• Reward for performance to meet the requirements of the job, or better
• Development to meet the requirements of the organization
• Release from the organization

As we have seen from our research model, these practices need to be applied in the line organization and on the project, Figure 4-4. This produces a model for the line organization reminiscent of the Michigan model (Devanna, Fombrun, and Tichy, 1984), repeated for the project. The elements of the model are discussed in the next section.

Practices Specific to the Project

Assignment to the Project

This process of assigning project personnel (program and project managers and team members) to new projects and programs is the equivalent of selection and recruitment to the parent organization. It is similar to that process, but has substantial differences, even when appointing external contractors to be peripheral workers on a project. The appointment of personnel to projects takes on strategic significance and may influence the ability of the organization to retain personnel. We anticipate, based on previous research (Jones and DeFillippi, 1996), that the career dynamics of allocation to projects will be visible; and that organizations consciously seek to make project personnel allocation decisions based on an assessment of what personnel are available and what projects may provide—for each prospective appointment—such as specific development needs, expertise, experience to work with particular clients, etc. These processes should be explicitly considered from both an individual as well as an organizational perspective. Eskerod and Jepsen (2005) have researched a new staffing procedure, in which enrollment is dependent on employees voluntarily responding to internal advertising of projects. The assignment to the project may also be made during the project life cycle (Eskerod, 1998; Eskerod and Blichfeldt, 2005).

Appraisal on the Project

Organizations may also need to apply HRM practices on the project, delegating responsibility to the project manager. For instance, project appraisals may be conducted. Graham (1989) and Turner (1999) consider on-the-project appraisals an important part of motivating people working on the project. Turner says that it is not only important for the present project, but also future projects that the staff member may work on with the project manager, to receive recognition for his or her contribution on the project, and for that to be recognized in the formal appraisal in the line. Graham (1989) and Turner (1999) also suggest that, for cohesiveness of the project team, team members from different parts of the parent organization should feel their contribution is being assessed in the same way. Turner also says that people who have not performed well on the project should be given feedback so they can improve performance on the next project they work on, thereby helping them with their future career development. As Hamlet said, “You have got to be cruel to be kind.” It is not fair that somebody should continually underperform on projects, and so continually disappoint, and not be given feedback and guidance on how to improve their performance. This corresponds with evidence that feedback is an essential characteristic to motivate workers.

Reward on the Project

We do not expect somebody's primary pay to come from the project, unless they work in a project hierarchy. However, we might expect project staff to receive bonuses for achieving milestones on time or ahead of schedule. Turner (1999) suggests that social events while projects are ongoing are important, especially the end-of-project party to reward people for superior performance, not just to motivate them on this project, but also for future projects. In a survey in PM Network (February 2007, p. 12), 55 percent of people reported that their organization never or rarely gave project-specific rewards to encourage achievement of project goals or in recognition of the completion of project milestones, and only 45 percent did sometimes or always. Beel (2007) surveyed rewards on projects and found that the appropriate rewards were specific to the type of project. He identified six reward questions and showed that the answers to these questions were dependent on 12 project characteristics:

1. Uniqueness and outcome clarity
2. Risk impact
3. Change
4. Complexity
5. Organization structure
6. Relevance
7. Success criteria
8. Project stages
9. Member fluctuation
10. Duration
11. Urgency
12. Project management tools used

Development on the Project

Within a project, a lot of personnel development takes place. It is strongly linked to the leadership function of the project manager (Raiden et al., 2004; Müller and Turner, 2005). Jones and deFillippi (1995) also suggest that projects are stepping stones in an individual's career. We will not only look for people to develop on the project, but also look at how the project contributes to their overall development. Individuals may also require project-specific development to learn new skills to work on this project. These may be language skills, cultural skills or to learn new (or even old, legacy) software.

Dispersement from the Project

Dispersement is a process whose need is not widely recognized in literature on projects or on HRM. It has similarities to, but also substantial differences from, the release from the parent organization. It is at this time that the organization needs to decide whether the employee will be:

• Assigned immediately to a new project
• Assigned to a project starting sometime in the future when his or her skills will be better used
• Held in abeyance because there is no project for him or her to be assigned to
• Released from the organization in the case of temporary or peripheral workers

It is at the end of a project that core workers are most vulnerable to leaving the organization, especially if faced with a period of “sitting on the bench.” At the end of the project, core workers should be debriefed about their experiences and counseled about the future. If they do not have another project to go to straight away, they can do many things:

• Sit on the bench
• Attend training or other personal development
• Be assigned to do technical or process development

This period is one where we might expect project personnel to be more anxious, and having practices in place to recognize and manage that period is clearly important for both the individual and organizational well-being. The choices made about what to do with project personnel at the end of the project need to be made in consultation with them to ensure employee well-being and procedural fairness in project allocation decisions and from an organizational perspective to avoid valued personnel leaving. Peripheral workers also need to be counseled and debriefed. If they have performed well, the organization may want to retain them. The organization can advise them on training, even involve them in training, invite them to attend social activities, and work at keeping them with the network of potential peripheral workers.

Keegan and Turner (2001) also identified the need to capture knowledge during and at the end of projects. As temporary organizations, projects come to an end, and if the learning from the project is not captured by the end, it is lost forever. It is especially important in the case of peripheral workers who may be released from the project at the end of the project, that their learning is captured for the parent organization.

Practices in the Line

Selection into the Parent Organization

Keegan and Turner (2003) described the selection processes used by project-oriented companies. We discuss their work in Chapter 3.

HRM Practices in the Parent Organization

Sveiby (1997) suggested that a key to retaining personnel in knowledge-based organizations was ensuring employees had opportunities to work on interesting projects providing interesting career challenges. In project-oriented companies, the comfortable certainty of climbing up the ladder of the functional silo does not exist and arguably such certainty is a thing of the past in most organizations. The HRM literature has indeed begun to conceptualize careers in more dynamic terms (Mayrhofer et al., 2004), describing initiatives such as the network-path career (Mondy, 2005). While it is true that the HRM literature now recognizes the necessity for increased flexibility in career development (Mondy, 2005), the dynamism and flexibility of career development in project-oriented companies is intrinsically related to the fact that projects, being transient, cannot provide careers. While each project can be a learning opportunity in a career built on successive and overlapping projects providing a broad sweep of learning experiences, this requires careful management. Therefore, the study of career management in project-oriented companies commands critical attention. Anne Keegan and Rodney Turner (2003) introduced the idea of the “spiral staircase career” to reflect the idea that people will move through a series of varied and wide-ranging jobs in project-oriented companies. Project-oriented companies provide the kind of varied and interesting careers to which the HRM literature is increasingly referring to. However, to the extent that employees rely on continuous movement from project to project to develop their careers, the processes linking employees to projects, and projects to careers, should be critically examined. For example, it is important to consider the manner in which processes are put in place to ensure outcome justice as well as procedural and interactional justice in project allocation. The way these processes are (mis) managed may have an effect on the legitimacy of career development processes in project-oriented companies, employees’ perceptions of fairness, and the effectiveness of the processes from a managerial perspective. Turner et al. (2003) describe development of project personnel in the project-oriented organization. The objective of personnel development is to improve the competence of project management personnel by offering the possibility of gaining knowledge and experience. The establishment of the profession “project manager” in an organization supports the professionalism and thus the competence development of project management personnel (Huemann, 2005).

Release from the Parent Organization

There are two key elements in the release process:

• Organizational learning
• Individual review and feedback

In project-oriented organizations, there is a high risk of knowledge loss as people leave the organization. This is especially true where there is high use of peripheral workers. Most of the learning on projects is not captured during the project, and as a peripheral worker leaves at the end of a project, there is a high chance that any learning specific to the project will be lost when that worker leaves.

Caveat

We have developed a model of what we expect to see in the way of HRM in the project-oriented organization. We expect this will enlighten our path. However, to reduce the risk that we use the model in ways that prevent us from acknowledging emerging counterevidence or alternative practices, we explicitly look for counterexamples and divergent cases in the analysis and interpretation of our data.

Tables

4-1      Companies Interviewed

4-2      Learning Message from the Companies Interviewed

4-3      Case Study Companies

4-4      Learning Messages from the Case Study Companies

Figures

4-1      Process of the research project, with timings

4-2      A simple model of HRM in the classically managed organization

4-3      A simple model of HRM in the project-oriented organization

4-4      HRM practices in the line and specific to the project

TABLE 4-2. Learning Message from the Companies Interviewed

Company No.	Organization interviewed	Learning messages
I 1	IT consulting industry Subsidiary of an American company	Building up a global database of skills, but hindered getting people when they need them because of local employment law and strict head count imposed by American parent Project managers should complete a feedback form used in appraisal, but it does not always happen
I 2	Business unit of an IT consulting company Subsidiary of an American company	Employees never know where they will work next. Every project needs new competencies. Because Austria is a small market, there are few repeat projects
I 4	Global electronic company	At project assignment, matches project competence of project manager to complexity of project Clear procedures for assigning personnel to projects including interviews and assessment centers Systems in place to identify when project managers are about to be released from projects Project managers can have sabbaticals
I 5	Telecommunication company	Consciously using projects as vehicles to develop people
I 6	Management consultancy	Appraisals and development in the line linked to the annual budgeting cycle, and people are given their personal development budget. HRM department of two people for a company of 300 people
I 7	Information systems consultant	Making decisions on completion of one project about where an individual's competence will be best used on their next project, rather than assigning them the next available project
I 8	Company specialized in IT and business process outsourcing	HRM Department is quite small, but has a significant role in setting policies and standards, and ensuring a match between policies set by the American parent and local employment conditions. Utilization is a core issue which runs through the employment relationship
I 9	Company specialized in IT and business process outsourcing	More than 50% of employees were acquired rather than hired Formal project appraisals conducted at the end of every project or at least once every three months HRM provides a contact point for employees who need counseling
I 10	ICT vendor Subsidiary of an American company	360-degree appraisals ensure project performance formally taken account as part of appraisal in the line Achievement of personal development objectives included in assessment of annual bonus High use of temporary workers, even for internal development projects
I 11	Construction consulting company Subsidiary of a British company	High use of temporary workers; same people used repeatedly and almost treated like staff People complaining about lengthy, overseas appointments Feedback from client formally sought at the time of annual appraisal
I 12	Gas turbine and aero-engine manufacturer	Use of development centers and Program Management Council to develop project management competencies to meet the needs of the organization Project assignment conducted as part of annual budgeting cycle
I 13	Medical and security assistance Global operation	Project assignment conducted as part of annual budgeting cycle Project staff have longer tenure than staff in the line

TABLE 4-4. Learning Messages from the Case Study Companies

Company No.	Organization interviewed	Learning messages
C 1	Company specializing in IT and business process outsourcing	High focus on utilization runs through the employment relationship Tries to be a good place to work with reduced barriers to advancement Problems with managers should be resolved locally, not by referring to HRM department Priorities strongly derived from business demands
C 2	Telephone operating company	The appointment of project managers can be based on political pressures On projects lasting more than one year, people formally transferred to the project People not performing on projects are rather coldly returned to the line, but this reflects a swing against the previous practice of tolerating nonperformance Line managers rigidly guard their authority. Appraisals not conducted on projects. Development always paid by the line, even to develop project-specific competencies; and reward always paid from the line, even for project social events celebrating project achievement
C 3	Engineering design and construction management	Projects lasting more than one year established as a quasi-business unit, and people transferred to the project. The project is given HRM support through the secondment of HRM managers to the quasi-business unit On small assignments, the assignment is assigned to the person, not the person to the assignment
C 4	Aerospace research and development	There is a very strong task focus, because people enjoy the science. At project assignment there is an attempt to ensure that the project management team of three has at least one people-focused person Future project managers are identified and developed as part of the appraisal process Projects run by the projects department. Project professionals appraised in the project hierarchy Experts (engineers and scientists) seconded from expert pools and appraised in the line. Project manager's opinion only informally sought as part of the appraisal. There is recognition of the need for diversity management, but they recognize that the dominant culture tends to be self-perpetuating.