Changing Patterns of Human Resource Management (HRM) in Construction Industry

Contemporary HRM Practices and Policies

In the realm of human resource management within construction projects, three distinct management practices stand out: soft, hard, and Harvard styles. As Gill (2007) outlined, the Soft HRM approach strongly emphasises optimizing the workforce's alignment with organizational objectives by first meeting their own needs and expectations. This approach takes inspiration from Maslow's (1954) hierarchy of needs and posits that a robust organizational environment can be achieved when management actively addresses the specific requirements of each employee. In contrast, Noe (2006) contends that optimal performance within construction projects hinges on strong motivation and a sense of belonging among individuals within the organization. Consequently, this model places great importance on fostering employee engagement and nurturing positive relationships to enhance overall project performance and success.

However, the Hard HRM approach favours the notion that organizations should deploy human resources structured and systematically, just like any other resource. Therefore, as in additional resources, cost-effectiveness and maximum output should also be desirable in HRM. Kleiman (2000) asserted that using this model assures the achievement of performance through effective management control of HR activities to sustain the competitive advantage. The structured HR strategy is designed in this model to fit the business strategy that includes strict performance management measures, workplace flexibility, outsourcing, and other important initiatives to operate the workforce efficiently.  This management perspective is more prevailing in the construction sector as the management designs the workforce practices merely in line with the project requirements and is not considerate of the worker’s needs.

On the other hand, within the sphere of HR support for construction companies, the Harvard model offers an equilibrium between the soft and hard HRM approaches. This model perceives employees as invaluable assets while concurrently acknowledging their human dimensions in organizational decision-making and employee relations, all while harmonizing business objectives with societal expectations. It particularly suits contemporary learning organizations in the construction sector and encompasses vital elements such as workflow management, reward structures, performance evaluations, initiatives to foster employee commitment, competence development, alignment with organizational aims, and the cost-effectiveness of workforce management. Nevertheless, in the construction industry, the predominant tendency leans toward applying hard HRM practices, often due to project managers' hesitance in embracing contemporary HRM concepts. Given the project-centric nature of this industry, long-term HR planning and investments are frequently regarded as a luxury with uncertain returns for the organization, as underscored by the insights of Ness and Green (2012).

• A Critical Review of HRM Theories' Implications in Construction

The construction industry globally faces significant HR challenges, characterized by practices often perceived as inconsiderate, informal, and casual regarding workforce management. This aligns with observations made by scholars such as Lingard et al. (2008) and Townsend et al. (2011). Additionally, the construction sector reports widespread occupational health and safety issues, as noted by Loudoun (2010), and these issues are closely intertwined with workforce management and labour relations, as emphasized by the International Labour Office (2001). When we consider management theories and models, it becomes apparent that management styles in the construction industry differ from those in other sectors, highlighting the industry's unique challenges. The primary concern revolves around the limited impact of long-term and visionary management planning. The construction industry often struggles to adapt to contemporary human resource management approaches, as observed by Townsend et al. (2011).

Learn the Effect of a Project Manager’s Leadership Style on the Performance of Employees

However, the main theories of HRM are geared around outcomes such as performance and increase in efficiency; the literature suggested MRM models as a way to obtain best practices that lead to achieving competitive advantage in human capital management (Torrington et al.2008; Storey 1995). Though the symbolic nature of discussions contradicts the above-discussed HR models, this critical review is not found in the literature related to the construction sector (Wilkinson et al., 2012). Furthermore, Belout and Gauvreau (2004) debated that the contemporary approaches in HRM are based on effective ways to manage and deploy human resources and consider the factors of personnel management.

Similarly, Lin et al. (2011) suggested that the cost-effectiveness of HRM is also an essential attribute for construction companies that lead to a lack of long-term HR planning and development initiatives. Hence, the construction industry needs to change the standpoint of treating people as a resource and deploy them according to the factors of production, as evident from the fact that a considerable proportion of the construction workforce is non-native / multi-lingual. Although this industry is more labour-intensive, it needs a more human relations approach to HRM in which employees are treated as individuals with unique attributes and qualities and should be managed according to their skills and willingness (Huemann et al., 2007; Townsend et al., 2011). Consequently, Dainty and Chan (2011) also argued that critical perspectives are essential for existing HR theories on their implication to project-based settings like that in the construction sector. Therefore, evaluating the application of existing HRM perspectives in the construction sector can provide an insightful and important judgment on their applicability in this sector.

Management Focus of HRM in Construction

In the context of HR strategies for a construction company, the management focus chosen for this paper aligns with one of the three HR perspectives introduced by Wilkinson et al. (2012), which encompasses human, resource, and management orientations. This particular perspective holds substantial significance within construction industry operations, as it entails pivotal management practices capable of effectively bolstering organizational and project performance. Contrarily, the human and resource perspectives predominantly revolve around addressing employees' specific demands and needs. In contrast, the management focus is grounded in the viewpoint of leadership and its proactive endeavours to enhance employee performance. Fleetwood and Hesketh (2007) have pointed out that, in the construction industry, the correlation between HRM practices and organizational performance lacks robust theoretical underpinning. Consequently, it becomes apparent that the interplay of employee-related factors and management requisites can considerably influence the overall performance of construction projects, as noted by Dainty et al. (2007).

Health and Safety in Today’s Construction Industry

The changing role of HRM in the construction sector is underscored by Raja et al. (2014), who highlight a significant management concern. Given the market's fluctuating demands for substantial projects, construction companies are increasingly inclined to prioritize a cost-benefit strategy in HRM, often sidelining long-term employment and development opportunities for their workforce. The prevailing approach mandates that training and development be incorporated as essential components, with workers expected to possess the necessary training and experience as prerequisites for project-specific hiring. This shift in operational dynamics has raised substantial HRM concerns within large construction firms. Without a secure and supportive work environment and the prospect of long-term career growth, the industry grapples with issues such as high employee turnover, extensive outsourcing, and sub-contracting, as evidenced by Green and May (2003).

Additionally, the involvement of multiple stakeholders in the construction industry also affects management strategies in a project. The diverse interests of management and workers make HRM more complicated due to the mismatch of employees and organisational goals; for instance, the issues of salaries and overtime affect employee relations differently in different geographical rejoins (Forde et al. 2009). Also, Wilkinson et al. (2012) declared that HR managers in the construction industry have a more strategic role in managing macro and micro-level changes and cultural management in international projects. Also, in management focus, enhancement of skills and attitude of employees need to be addressed to meet the diverse changes in different parts of the world.