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Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
9Communication
Figure 5.5 Communication in Construction Industry
communication
in construction industry
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
Chapter 5 - Human Resource Management
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
17Manager’s Attitude
Figure 5.8 Manager’s Attitude Towards People in Construction Industry
Manager’s attitude towards people
in construction industry
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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)
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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.
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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.
Chapter 5 - Human Resource Management
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.
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
48Resource Leveling
Resource Demand Compared to Resource Availability
Chapter 5 - Human Resource Management
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.
Chapter 5 - Human Resource Management
50Resource Leveling
3AF
3-C
3-B
6-A
3BE
3FG
3CD
DurationsPredecessorActivity
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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
Chapter 5 - Human Resource Management
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