Human Resources Management in Construction

Dr. Nabil I. El Sawalhi

Construction Management

1 HRM Ch 2

Human Resource Management in The Construction Context

• No single theory of management exists and it is common for managers to view the individual components of management through isolation.

• The subsequent integrating of those divided parts in order to achieve better productivity.

• Human resource management (HRM) is explained in the context of the construction industry.

HRM Ch 22

The Relationship Between HRM & External Environment

• The construction industry is responsible for the production of the built environment.

• It designs, manufactures, maintain, and demolishes all the man-made lives.

• Without human, there would be no built environment.

• There is a need for planning, organizing, forecasting, control and co-ordination for every stage of building.

HRM Ch 23

Capital & HR: Fundamental Definitions for Management

• Human management is different than capital management .

• Although capital equipment may be complex, it does tend to be essentially consistent and dependable.

• Humans do not behave in a regimented or mechanistic manner, therefore create a number of difficulties that are not apparent in the management of plant and machinery.

HRM Ch 24

• The major resource input to construction is human.

• It is important to understand the peculiarities of this entity in terms of how it effect the managing of building process.

• Human behavior is governed by a unique kind of mental programming which arises from a combination of three broad sources of influence.

HRM Ch 25

• We can refer to these influences as:

– General

– Genetic

– Group influences

• 1. General influences: are those that affect all humans.

HRM Ch 26

• 2. Genetic influences: are those that we inherit through breading and from our grandparents.

• 3.Group influences: is the most significant area of mental programming is that which drives from group influences.

• Because we all have different life experiences.

• We will tend to view ourselves and our world differently.

HRM Ch 27

• The behavior of human is individually conditioned by their history, surroundings, schooling, upbringing, financial position , social grouping, kind, the law etc..

• The human react to a variety of motivation that induce certain kinds of behavior and these stimuli(motivation) are the product of environment.

HRM Ch 28

The System View

• Whilst human are affected by their environment, so their behavior have an influence on that environment.

• The theory used is “System Theory”.

• Understanding of the process of interaction between subject and environment has led to changes in the way that managers in all fields approach their task.

HRM Ch 29

• Managers see the resource and outputs is completed building.

• Survival for the firm depends on its ability to interact with this external environment.

HRM Ch 210

• We can identify four general facet of environment:

– 1.economic,

– 2. social,

– 3.political,

– 4.technical.

HRM Ch 211

HRM Ch 212

Production processesInputs

capital land labor

Outputs production

services ideas

environment

Feedback

• 1. Economic: Interest rate , inflation, unemployment level , competing, firms for market share.

• 2. Social: attitudes and values of employees towards works , attitudes and values of clients towards business and products , employee, level of education & training.

HRM Ch 213

• 3. Political : Laws, and regulations, governing the firms operations, industrial relation, health & safety.

• 4. Technical: availability of raw material, plant and machinery, market demands for particular manufactured material inputs.

• Firms success depends on the ability to interact between complex and conflicting objectives , culture and expectation and external environment.

HRM Ch 214

Environmental Scanning

• Human resource are one of the major input for the external environment.

• One means devised for purpose of increasing insights into the character and outcome of changes in the external environment is “environmental scanning”.

• Environmental scanning represents the starting point for planned pattern of objectives and policies that shape a firms present activity toward future superiority competitions.

HRM Ch 215

Combined Environmental Trends: Identifying and Analyzing

• Changes are brought about as a result of combined trends.

• It is necessary to take holistic view of the remarkably interconnected environment in order to get a meaningful picture that equips a firm meet the future environmental challenges.

• Scanning include the monitoring of publications /broadcast media, attendance at conferences.

HRM Ch 216

• Typical of the areas that a firm would scan are

• 1.socio-economic

• 2.Political

• 3.Legal

• 4.Demographic,

• 5. Educational trends.

HRM Ch 217

Demographic changes

• Will effect the size of workforce as change occurs in birth and death rate .life expectancy, migration

• Changes in education– This is called macro-environmental trends

– For success HRM , firms, have to consider the micro-economic.

– More important is the competitive position in the industry

HRM Ch 218

General Implication for Construction Firms

• Knowing when and how to scan is important.

• Should scan be an irregular, regular , or continuous.

• The answer depends in many factors (size, individual, circumstance, and environment) .

• Sure, continuous scanning is better.

• Small to medium size would prefer to perform irregular or regular basis.

HRM Ch 219

• With scanning, the implications should be analyzed and integrated with the organization over all objectives

• Analysis involves:

• Identification HR implication of environmental events.

• Setting up HR objectives.

HRM Ch 220

Human Recourse Management within Organization

• It is important to understand HRM within the context of organization.

• It is a system within the environmental supra-system concerned with the combination of org-structure, planning, and org-performance.

HRM Ch 221

What is the Purpose of the Organization

• We have private organization and publicorganization.

• The purpose of private organization is to satisfy the effective demand to undertake for which they will be paid by clients.

• Public sector: the purpose is the fulfillment of the needs of individuals or the public at large as identified and funded by government.

HRM Ch 222

What is the size of the organization

• Small organization would have less than 200 employee.

• Large ones over 1000

• Vast majority of firms are small

HRM Ch 223

What is the Structure of Organization

• Structure of the organization is seen as one of the influences of external environment on HRM .

• Structure is a fairly loose in construction.

• Tall structure with line manages overseeing a small group .

• Flat structure with a large number of employees reporting directly to the line managers.

HRM Ch 224

• Organizations can be structured according to:

• geographical area,

• product or function.

• The project structure, team structure consist of members from different functional area.

• The choice of structure depends on: – Degree of formality

– Level of supervision

– Extent of centralized decision making.

HRM Ch 225

What is the Role of Technology in Organization

• The effects of technology on the organization has a definite influence on both culture & structure .

• There is a very little change in technology used in construction.

• The component used “windows, precast concrete, doors, roofing, tiles” are results of high technology production.

HRM Ch 226

• The head office “finance, administration, estimating & planning” functions are becoming ever more computerized.

• Technology has made the human factor more important not less.

• Changing technology require HR managers to give advices and lead the others in this regards.

HRM Ch 227

What is the Philosophy underpinning the Org Culture

• All org have different ideas, beliefs and values.

• This will be demonstrated in the amount of freedom accorded to individuals.

• The org culture will affect its structure and will have been molded by the history, nature of business and environmental conditions.

•

HRM Ch 228

• HR managers can successfully perform his function only through understanding organizational culture.

•

HRM Ch 229

What Effects will the Employees and their Jobs have?

• Jobs: are created by the organization and constitute the activities and tasks identified as necessary for the achievement of the organization functions.

• Employees: are the people hired specifically for the purpose of carrying out the jobs identified as necessary by the organization.

HRM Ch 230

• Satisfaction of the employees will depend on subjective view of an individual which may effected by the following factors:

• 1. independence or freedom from direct supervision or control.

• 2. challenge or difficulty affected by the task.

• 3. diversity or heterogeneity of the work.

HRM Ch 231

How Each Employee Respond to job Factor

• Depends on unique combination of personal characteristics.

• Consider the following factors:

1. The employee suitability for a particular job in terms of capability, education, training, dexterity, competence.

2. The employee’s preferred type of work and employer based on his goals, ambitions(hopes), priorities, inflations, and character.

HRM Ch 232

The Success or Failure of an Org.

• Depends on :

• Ability of HR manager to :

– understand,

– control problems and

– employee characteristics through organization life cycle.

HRM Ch 233

• What is the life cycle of an organization and how does it affect HRM?

• Life cycle of an organization :

– 1. first creation

– 2. develop and grow(expand workforce, increase market share, diversity of products and growing return to shareholders.

– 3. maturity (settled period of consolidation) , the size is stable, concern is directed to maintain current position.

HRM Ch 234

– 4. decline and eventual death (sales & profits falling, turnover of labor is too high, are current product and markets relevant.

• Who should do human resources management

• Two main options

• 1. internal employee or external consultant

• 2. by an individual or a team

HRM Ch 235

• For small companies , the employment of a specialist is cost effective managing director is used.

• HRM should be integrated into strategic management of the firm.

• HRM should exhibit the following qualities:

• 1. be an effective manager

• 2. be well informed about all function of the business.

HRM Ch 236

• 3. be a good problem-solver and planer able to make decisions and implement them.

• 4. have the ability to sell his ideas to senior management of the firm.

• 5. have an understanding of all level of the org and the ability to communicate

• 6. have a flexibility of mind capable of adopting to the changing environment whilst Retaining an independence of mind & well developed system of personal values

•

HRM Ch 237

Constraint for HRM

• HRM has traditionally been undervalued and therefore underdeveloped in the industry.

• The constraint responsible can be identified at two levels :

– The macro/ industry level and

– Micro or firm

HRM Ch 238

Cost of HRM

• For small firms, they predominant in the industry can not afford a formal, separate human resource function within the firm.

• The cost being prohibitive in relation to pay-roll and other operating costs.

• HRM for small firms is insignificant and can easily be absorbed within the general administration cost or be shown as an office overhead.

HRM Ch 239

• There is simply no incentive to introduce the function .

• For medium & large firms: there is concern over the cost of introducing a formal HRM policy.

• Line manager have carried out the HRM function in an informal manner, this has a cost in that it detracts from their prescribed job and lowers their efficiency as they have to spend time accumulating the skills and knowledge to perform this extra work.

HRM Ch 240

• Only when this cost in higher than cost of introducing formal approach will a firm consider introducing the skills and knowledge required to perform with extra work.

• Fragmented nature of industry

• Large firm may have HRM department at HQ.

• The site project based impose that each site has its team of management.

HRM Ch 241

• The usually object to be controlled from out side the site by HQ.

• The site manager prefer to recruit workers at site citing the need to meet production requirement .

• Managers will urge for convenience of recruiting workers at sites.

• Having selected employees and being closely aware of their individual of Performance &local condition.

HRM Ch 242

Labor Mobility

• The variation of supply in site labor demand make centralized human resources policy difficult to implement.

• The temporary nature of project-based employment has led to a traditional mobility of labor in the construction industry.

• The labor are faced to move from project / firm to another upon completion of work.

HRM Ch 243

Shallow Management Structure• In small firms, shallow management structure

with few hierarchical levels exist.

• Manager can make direct discussions with workers , got some feeling of the employees and their problems

• Manager should not use such relation to negotiate disputes of labor about wages and holiday.

• The informality should be kept in perspective & not used in argument.

HRM Ch 244

Subcontracting & Casual Employment Practices

• Most of firms prefer to use sub-contractor for several trades rather than direct employment of labor.

• This will release the company from direct HRM expenses and reduce self employment.

HRM Ch 245

Varity of Work

• There is an inherent variety of works in construction that voids the monotony associated with other industries.

• This may result to reduce the need of rarity of specialist HRM.

HRM Ch 246

The Attitudes & Education of Const Managers

• Traditionally, Managers comes from trades.

• They are promoted from foreman to site manager to area manager by education and training.

HRM Ch 247

• The problem is that the traditional project managers reluctance to accept other expertise from academia unless it is unavoidable, while they accept an accountant or a lawyer meet these conditions.

• It is less likely that they will see HRM in the same light.

HRM Ch 248