AR 542: BUSINESS MANAGEMENT AND APPLICATION FOR ARCHITECTURE 2

PRELIMINARY LECTURE HANDOUTS

Specific Learning Objectives:

1. Identify basic concepts of Human Resources Management in an Architectural Firm

HUMAN RESOURCES MANAGEMENT OVERVIEW

Barbara Irwin
This overview provides a snapshot of the most important characteristics of human resources management in an architecture firm .
Whether a sole proprietorship or a firm of 5, 10, or 50 employees, it is important to have a human resources infrastructure in place that
aligns with the firm’s business philosophy, vision, and values.

THE FUNCTION OF HUMAN RESOURCES IN ARCHITECTURAL PRACTICE

To best use a firm’s talent, it is necessary to understand the function of human resources (HR) within architectural practice. While
architects focus most of their energy on being creative, productive, and serving the clients’ needs, success does not happen without giving
attention to the people doing the work. It is necessary to have infrastructure in place to ensure that the HR details of a successful operation
are implemented. Even in a firm with only one employee, HR issues must be given attention. From the basics of personnel selection to
more complex HR programs that are aligned with the firm’s strategic goals, a clear understanding of what is involved in attending to
people is critical.
A well-defined and developed understanding of the HR function will help firm leaders select the individuals that will contribute fully to
the firm, be aligned with its culture and mission, and potentially lead the organization into the future. Recruiting talent, completing
reference checks on potential candidates, and preparing clear offer letters are all necessary steps to building a strong staff. In addition,
HR processes include identifying programs that ensure the talent selected continues to develop professionally and establishes a
commitment to the firm and its vision.
In a perfect world, once the talent is in place there is a successful relationship between employee and employer. However, this is not
always the case. Much like creating a design for a client, handling people can require adjustments to make a perfect fit. A well-operated
HR function will develop performance management measures that protect the firm’s investment in talent, support the employer and the
employee when a sensitive situation occurs, and prepare an exit strategy addressing any type of employee separation from the
organization. Developing an HR toolkit will assist in creating and implementing the appropriate programs for firm staff.

Value of Human Resource Management

As the U.S. workforce continues to change, focusing on future leaders, generational
differences, baby boomers retiring, and many other similar issues, architecture
firms will increasingly depend on human resources knowledge and processes.
Whether in a small firm or a firm with 20+, 50+, or 100+ employees, human resource
management is critical to the success of the firm. HR adds value to an organization
by creating programs that meet the needs of all staff, such as benefit programs,
training and development, and onboarding processes. These programs will help the
organization retain its most talented and effective people, and keep in-house the
firm’s investment in their development.
Focusing on tactical human resources means putting together the appropriate
processes and procedures. An example of tactical HR is the creation of a process
that can assist in orienting new staff in a consistent manner. Transactional human
resources refer to all of the various administrative tasks related to a particular
process. For instance, when a firm hires a new employee, there are insurance
documents, tax documents, enrollment forms, etc., that need to be completed.

With changing laws and regulations, a firm’s HR management processes must continue to provide transactional and tactical support, in
addition to continuously staying abreast with guidelines that affect a firm’s legal obligations. However, knowledge about human resources
can provide much more to the success and growth of an organization. Just as the people charged with the responsibility for finance and
marketing provide insight to an organization, those responsible for HR bring their own unique and necessary perspective to the
organization.

Human Resource Management as a Strategic Issue

As a strategic component in architecture firms, HR can provide input on the growth of an organization in terms of the people that power
it. Strategic input means, for example, determining whether the right programs are in place, understanding HR trends in the industry, and
identifying firm capabilities that need to be strengthened. A strategic HR function will foster a true understanding in the firm of what

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employees are looking for in a professional environment. Conducting employee surveys and addressing issues identified in the results
lets employees know that the organization is truly listening and working to provide an environment conducive to creative engagement.
Providing employees with the most up-to-date technology available to enhance innovation in design is an example of the kinds of actions
that help prevent talented employees from looking elsewhere for opportunities.

Many firms go through a strategic planning process. It is advisable to include HR management as an important component of the strategy.
Strategic issues such as looking at new market sectors, for example, may involve hiring new talent and a number of other human resource-
related issues. In larger firms, involving the HR director during strategic business planning increases the likelihood that there will be
consideration of the investment needed to attract the best and brightest as workload increases. Similarly, if those responsible for
researching possible hires know when staff demands are expected to increase, early identification of the most talented prospects can be
accomplished. Offers can then be made quickly, so that there is little lag time between an identified need and the start date of a new
hire. Positioning the HR function as a strategic partner helps firms plan their business strategy and sees that they have the right personnel
infrastructure in place to move forward. Responsibility for the various components of HR can shift according to the size of the firm as
demonstrated in the HR responsibilities chart (Table 8.1).

THE MAJOR COMPONENTS OF HUMAN RESOURCE MANAGEMENT

The following are nine major components in a strategic and operational human resources function. Each component affects the success
of a firm. Administration of the necessary requirements and regulations for each and seeing that they align with the strategic plan for the
firm will be handled by the individual responsible for human resources (human resources manager, managing principal, CEO, etc.).
• Recruitment and Selection
• Onboarding
• Performance Management
• Legal Compliance
• Employee Relations
• Rewards and Recognition
• Training and Professional Development
• Leadership Development
• Retention Programs

Recruitment and Selection

Recruitment activities are cyclical in the design industry, as is the need for talent. When the economy is booming, so is th e demand for
talent; when the economy is slow or stagnant, recruitment tends to decrease. However, slow economic times are good for recruiting
strategically. By examining what other market sectors or business models a firm is exploring, it is possible to identify what type of talent
will be needed as the business changes. A solid recruitment and selection program will assist the firm as it ramps up for new projects and
economic shifts.

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Any firm, regardless of purpose, is only as good as its people. As leadership works with clients to deliver the creativity and quality of the
firm’s services, the need for additional creative and talented staff may grow. A strategic HR leader will make certain that the recruitment
and selection of additional staff lives up to the reputation of the firm (hopefully, stellar) and the reputation of its people. In larger firms,
HR will handle the details of the recruitment and selection process to the point where leadership makes the final selection. This removes
the burden of finding the right people from firm leadership so that they may focus on excellent client service and project delivery, thereby
continuing to expand the reputation of the firm. Even in smaller firms, administrative assistance in the recruiting and hiring process is
advisable. (See Figure 8.1.)
Onboarding
Many studies have shown that when an employee establishes a
connection with the people, work, and culture within the first
six months, the chances of long-term retention improve.
According to Shawn Abraham, Corporate Recruiter from The
Structural Group, an individual’s first impression can be lasting,
so it is critical for companies to take a proactive approach
toward easing their transition. A correct onboarding can make
this outcome more likely, and senior management, in
conjunction with HR leadership, should be involved in the
design of an effective program.
Although an onboarding program in larger firms is typically
coordinated by HR, it involves the entire organization. The
following components and timeline are critical to any successful
onboarding program (see Table 8.2):
• Preparation prior to new employee start:
o Identify workspace
o Provide necessary supplies
o Provide computer and phone
FIGURE 8.1 Recruiting Process o Prepare onboarding packet

• Welcome and greeting by top leadership

• History of the firm
• Sharing of the organizational mission and vision
• Tour of the facility
• Transactional activities associated with new hire and benefits
• Introduce a peer partner (aka buddy) to assist new employee in assimilation into the organization
• Lunch with a member of organization (should be established prior to start date)

Performance Management
Performance management encompasses every aspect of the manager/employee relationship with respect to job performance. It entails
discussions with a firm leader to help guide an employee’s performance and encourage ongoing communications between the employee
and supervisor. It also includes a structured performance appraisal/assessment program that is applied consistently throughout the
organization.
Performance management programs usually involve periodic feedback (both formally and informally) throughout the year. Most
architecture firms, big or small, have some type of communication mechanism in place to see that supervisors and/or managers are
providing feedback on the employee’s work performance. A typical performance management program would include an annual
performance appraisal program. (See Table 8.3.) This provides an opportunity for the manager to assess the employee’s performance,
identify strengths and opportunities, and create goals and objectives for the upcoming year.
A comprehensive performance appraisal will include input
from the manager, the employee, and peers or coworkers of
the employee. This 360-degree program provides the
employee with the necessary information to analyze their
performance with an eye toward career advancement and
contribution to the organization. This wide-ranging form of
appraisal will also help managers identify areas in need of
performance coaching and career development coaching.
The manager appraisal gives an opportunity to formalize the
observations that the manager has made on the employee’s
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performance throughout the year. Although this may be the

first time that this information has been officially recorded, it
should not be the first time that the employee is hearing
input from the manager. It is important to remember that
effective “performance management” does not happen with
input just at review time. Timely input from a manager
allows employees to plan for and to gauge their own
professional growth and development.
This informal input of information from the manager helps
the employee recognize what the firm’s expectations are and
how they are meeting those expectations. This information
is then the foundation for the goals that the employee will
set for professional development and the goals that are set
by the firm for performance management. A performance
review appraisal typically consists of evaluating performance
on core competencies or areas of an individual’s work
attributes, key accomplishments, and goals and objectives.
Setting the goals is only the first step in planning for
professional development and identifying career
development opportunities. It is the shared responsibility of
both the manager and the employee to explore the
opportunities that will assist the employee in continuing in
their professional development and assist the firm in
identifying career opportunities for the employee that will fit
with the strategic plan of the organization. (See Table 8.4).

Legal Compliance
Human resource management requires staying up to date in
the area of employment laws, legislation, and compliance.
Employers need to ensure that they are following the various
federal, state, and local laws, which depend on many factors,
including the size of the firm. There are different laws or
variations of the laws for firms with fewer than 20
employees, over 50 employees, etc. In addition, if a firm is a
federal contractor, there are further laws that need to be
adhered to if the contract is over $50,000 and over 50
employees. Table 8.5 provides a breakdown of some of the
most critical laws with which firms need to comply.

Employee Relations
Employee relations are an important aspect of HR. This
entails providing consistent messages to staff, which is
imperative to see that all employees are treated in an
equitable manner. Sensitive issues arise in the workforce on
a regular basis. An example might be one in which an
employee approaches a member of the management team about another manager who is making inappropriate comments, either directly
to the employee or in the office at large. Because in most firms all members of the management team are in close working relationships,
this can be an awkward situation for all parties involved.
To provide every employee with a comfortable working environment, it is critical that the manager who is approached knows how to deal
with this situation in a confidential and efficient manner. Because the decision on this issue will have an immediate impact not only on
this employee but also on other members of the firm, it is important to handle a situation such as this in a professional and unbiased
manner. Such issues must be handled with a consistent and compassionate process so that if such a situation occurs in the future,
management has a clear process in place that assures equitable and fair treatment.
The first step in equitably dealing with employee relations is to put in place the right policies and procedures to communicate and enforce
expected and acceptable behaviors at work. The best way to guarantee this unbiased treatment and to provide employees with a clear
understanding of the policies and procedures is to produce a comprehensive employee handbook. See the sidebar for an example of a

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a table of contents from a standard employee handbook. This

document outlines management’s expectations and
employee and management responsibilities. Creating a
comprehensive handbook will eliminate any uncertainty
among staff and provide management with a “go to” resource
to explain to staff why one policy or another is in place.
Even with the necessary tools in place to ensure equity,
problems will still arise. An employee may not be happy with
management’s decision on a specific situation, and this may
lead the employee to take legal action against the firm. HR
input into such sensitive matters as discrimination or sexual
harassment will help leadership keep the response to such
issues fair and consistent. Therefore, if a firm does not have
an HR professional, hiring an external HR or legal consultant
for guidance on how to proceed will assist the firm in
minimizing the risk to the organization.

Rewards and Recognition

When most individuals see the words “rewards and recognition,” the quantitative awards come to mind. However, rewards and
recognition take many forms, such as an annual firm retreat acknowledging staff for a job well done, team and individual awar ds for
projects and/or client successes, and various communication vehicles acknowledging individuals’ hard work and effort going into a project.
There are many qualitative and quantitative examples of how firms acknowledge their staffs for successful performance. Spot awards,
pay-for-performance awards, annual bonuses, employee-of-the-month awards, and team awards are just a few examples of how firms
can provide recognition for a job well done. There are also many external awards that firms can receive as recognition for these efforts,
such as the AIA Firm of the Year Award and Best Firms Contests that many areas conduct.
Every firm has a compensation philosophy, whether formal or informal. The establishment of base pay salaries, incentive plans (bonuses),
and awards is common in the professional services industries. The challenge for any firm is finding a formula that works for a particular
firm, based on variables such as firm location, culture, and management approach.
For example, a firm may have a compensation plan for new-hire salaries in the form of salary ranges within each position and level. Some
firms may have a more informal plan that will focus on the market demand for individual positions and salaries.
Bonus or incentive compensation plans are another example of a quantitative award program. This type of program identifies and rewards
individuals in the firm who have performed above and beyond the typical duties of their positions. Many firms identify a specific time of
year for this program (end of the year or the end of a quarter). Some firms provide measurable expectations such as meeting utilization
rate target or client’s tangible satisfaction on a project. Other firms identify and reward individuals based on the performance of a
department or studio, or the profitability of the firm as a whole.
The most important issues with any recognition and reward program are that it is communicated in advance, is fair, is clearly understood,
is meaningful to employees, and is challenging, yet attainable.
For an effective compensation program, employees need to understand that in any given year, bonuses and salary increases may be
nonexistent because of low profitability of the firm, due to economic conditions, or other reasons. This area is an opportunity for
management to continually improve their communications and, ultimately, relationship to staff.

Training and Development

An effective training and development program that focuses on the development of staff serves a twofold purpose in a successf ul
architecture firm: It ensures that employees are kept abreast of the changing trends and regulations in the field of architecture, and it
attracts and retains the high-quality talent who strive to keep their skills finely tuned. Employees look for continuous development to
enhance their careers, as cited in the 2007 Future Leaders Survey conducted by HR Advisors Group. A strategic HR function will work with
leadership to find external training opportunities for staff and develop internal, less formal training programs that are supported by the
in-house talent. Human resources will also keep abreast of certification and licensure issues pertinent to the members of the firm and
help individuals track the renewal requirements necessary to remain in compliance with state licenses. For instance, HR can help identify
opportunities to complete the HSW and SD continuing education hours required of AIA members and sometimes mandated by state
licensing boards.

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