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Improved decision aiding in human resource management

A case using constructivist multi-criteria decision aiding
Sandra Rolim Ensslin
~o em Contabilidade, Programa de P os-Graduaca Universidade Federal de Santa Catarina UFSC, Florian opolis, Brazil

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Received 24 April 2012 Revised 13 December 2012 6 May 2012 Accepted 28 May 2013

Leonardo Ensslin
~o em Administraca ~o, Programa de P os-Graduaca Universidade do Sul de Santa Catarina UNISUL, Florian opolis, Brazil

Felipe Back
~o em Engenharia de Produca ~o UFSC, Programa de P os-Graduaca Universidade Federal de Santa Catarina UFSC, Florian opolis, Brazil, and

rio Tadeu de Oliveira Lacerda Roge

~o em Administraca ~o UNISUL, Programa de P os-Graduaca Universidade do Sul de Santa Catarina UNISUL, Florian opolis, Brazil
Abstract
Purpose Identify the criteria/KPIs to support managers during human resource allocation based on knowledge demand, which serves as a decision support tool to help maintain organizational competitiveness. Design/methodology/approach Human resource allocation in a project management model, based on knowledge demand and using a multi-criteria decision aiding method as an intervention instrument. Findings Three major areas of concern were identified. In all, 76 KPIs to explain concerns associated with the values of the manager, and develop cardinal and ordinal scales for each descriptor and integrate compensation rate. Further, he was allowed to implement and evaluate the current performance of the analyzed engineer, with 44 points on a cardinal scale, and provide a model with improved actions that raised his assessment to 55,67. Originality/value The Multi-Criteria Decision Aiding-Constructivist methodology (MCDA-C) emerges as a traditional MCDA method to support decision makers in the contexts where they have a partial understanding and wish to increase their knowledge of the consequences of their values and preferences. In addition, these managers will also need to utilize time management, as people issues in the place of other functions have been highlighted in numerous published articles over how the management of human resource allocation can influence the competitive performances of an organization. Keywords Performance Management, Human Resource Management, HRM, MCDA-C Paper type Case study

1. Introduction Manufacturing companies are increasingly adopting project management in their design and development processes to help develop more sophisticated and customized products. A key issue for the management of these companies is to ensure skilled individuals are allocated as effectively as possible to cope with the demands of competing projects. In this paper, we address this problem by using a constructivist

International Journal of Productivity and Performance Management Vol. 62 No. 7, 2013 pp. 735-757 r Emerald Group Publishing Limited 1741-0401 DOI 10.1108/IJPPM-04-2012-0039

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multi-criteria approach to develop a decision support model for human resource management (HRM). The study analyses a multinational company that manufactures home appliances. This firm is the market leader and has approximately 800 employees, out of a total of 7,000, involved in project management. These professionals need a management model that allows them to meet the demand for customized products without increasing the resources available a complex and challenging management issue. First we need to understand the problem and the high importance of the approach; the next step is to identify any scientific knowledge that can be used to support managerial functions. The constructivist approach develops managerial knowledge and thus allows managers to expand their own knowledge and understanding about individual decisions, goals, and objectives. Therefore, this approach has been identified as the most appropriate in this context when compared to the normative, descriptive, and prescriptive approaches. To identify the relevant objectives for this analysis we need to define the goals to be achieved. In this context, the following research question emerged: How can MCDA be used to construct a managerial decision support tool for human resource allocation based on technical expertise? The objective of this study is, therefore, to develop a model to help human resource allocation based on technical expertise (i.e. knowledge demand). 2. Literature review The theoretical framework is presented in three parts. In the first part we introduce the concept and characteristics of HRM relevant to the study; the second part presents the research opportunities; and the third addresses the intervention instrument used in this work, namely the MCDA-C. 2.1. Concepts and definitions HRM contributes directly to achieving a firms strategic objectives (Baird and Meshoulam, 1988; Jackson and Schuler, 1999). Human resources practices generate value for organizations when individual actions are aligned to the development of critical resources or technical expertise (Wright et al., 2001). Managers also have to utilize most of their time managing people issues in place of other functions, with people managing skills being one of the more difficult skills (Dixon, 2011). Once human resources are managed strategically, competitive results are more likely (Kiessling and Harvey, 2005). In terms of HRM, Hendriks et al. (1999) highlight the complexity in human resource allocation for heterogeneous activities, which usually involve multiple purposes that are poorly defined and conflict with one another. Lado and Wilson (1994) emphasize, however, that a good strategic process of the allocation of human resources helps to develop a competitive advantage that can rarely be imitated by other organizations. Globalization, including the increase of international business and growth in emerging markets such as China, India, Latin America, and Eastern Europe, is contributing to the large increase in studies of performance management for both the academic and business communities (De Waal et al., 2011). According to Huselid (1995), several articles have been published on how the management of human resource allocation influences the competitive performance of individual companies. Moreover, traditional resources used to achieve competitive advantage are drying up and becoming less effective. In a context where the dissemination of knowledge,

processes, and techniques occurs almost instantly, having a competitive difference promotes widely perceptible results that are also difficult to reproduce. Thus, according to Schuler and MacMillan (1984), in the process of searching for new mechanisms to create competitive advantage, the management of human resource allocation is important. We propose the use of MCDA-C due to the possibility of building knowledge in particular contexts, such as complex and conflicting contexts where the manager needs to expand their own understanding (Ensslin et al., 2010). It is noted that researchers such as Skinner (1986), Keeney (1992), Roy (2005, 1996, 1993), Landry (1995), Bana e Costa et al. (1999), Zimmermann (2000), Shenhar (2001), Stewart (2005), and Igarashi et al. (2008) have all drawn on these assumptions to develop their models in decision aiding. This study presents a situation where the context is unique and the manager participates actively in the whole process of model building. This study highlights the status quo and the impact of the decision makers decisions on those aspects (KPIs), perceived as necessary and sufficient to manage the problem of resource allocation. 2.2. Perspectives on research about HRM and performance evaluation Theoretical knowledge required for the case study are dealt with in this section. The ProKnow-C process was used to conduct a systematic analysis of the literature (Marafon et al., 2012; da Rosa et al., 2012; Lacerda et al., 2012; Tasca et al., 2010). The ProKnow-C method is designed to build a researchers knowledge on a particular topic of interest and is composed of four macro-processes (as illustrated in Figure 1). To accomplish the first macro-process, combinations of keywords related to the two axes of this research were adopted (as described in Table I). After this activity, the databases Scopus, Compendex Engineering, Wilson, Web of Science, and Science Direct were selected.

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(i) Portfolio of relevant articles selection

(ii) Bibliometrices analysis of the portfolio

(iii) Systemic analysis

(iv) Research question and research objective definition

Source: Adapted from Lacerda et al. (2012)

Figure 1. The macro-processes of ProKnow-C method.

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A systematic search using combinations of the keywords returned 5,132 articles published since 2001. After a screening process, described in Figure 2, 11 relevant articles were selected (Athanassopoulos and Gounaris, 2001; Bititci et al., 2001; Chen and Lee, 2007; Golec and Kahya, 2007; Huang et al., 2011; Kahya, 2009; Laitinen, 2002; Lee et al., 2009; Medlin and Green, 2009; Moon et al., 2010; Trejo et al., 2002). The selection criteria included the number of citations and the relevance of a papers title, abstract and full text. The next step in the ProKnow-C method is to perform a bibliometric analysis of the representative sample of articles. The bottom of Figure 2 lists the major journals, articles, authors, and keywords identified in the bibliometric analysis of the sample. After the disclosure of the bibliometric attributes described above, the ProKnow-C method prescribes the systemic analysis of the sample content. The systemic analysis

Axis 1: HRM (a) Human resource management (b) Job performance (c) Employee (d) Resource allocation Source: The Authors (2012)

Boolean operator And

Axis 2: Performance evaluation (e) Performance assessment (f ) Performance evaluation (g) Performance measurement (h) Performance appraisal

Table I. Combinations of keywords related to the two axes of this research

SELECTION OF RELEVANT PAPERS All papers returned with keywords combination Elimination of redundancies Alignment by titles of the papers 446 Scientific recognition through the number of citations 21 18 11 Alignment by abstracts of the papers Full alignment with the theme of the research and availability of full text Relevant papers 11 articles Filters

5,132 3,194

BIBLIOMETRICAN ALYSIS

Outstanding journals (i) International Journal of Project Management (ii) European Journal of Operational Research

Outstanding papers (i) A dynamic performance measurement system: evidence from small Finnish technology companies (ii) Strategy management through quantitative modelling of performance measurement systems

Outstanding authors (i) Bititci, U.S. (ii) Carrie, A.S (iii) Kahya, E.

Outstanding keywords (i) Human resource management (ii) Resource allocation

Figure 2. Screening process to select relevant papers on the topics of HRM and performance evaluation

Source: The Authors (2012)

constitutes a means to highlight the theoretical constructs adopted, and these elements have three goals: (1) (2) (3) highlight opportunities for research on the topic and, therefore, explain the theoretical contribution of this paper; justifying the use of MCDA-C as a research tool; and demonstrate alignment between the case study and the theoretical construct identified.

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To systematically analyze the selected articles, it was necessary to define the lens through which the researcher would analyse the contents. The systemic analysis process aims to highlight outstanding issues and gaps of knowledge found in the sample compatible with the worldview adopted by the researchers. In this paper, the worldview was that performance evaluation is a process to develop knowledge for a decision maker that is relevant to the specific context that he or she intends to evaluate. This is conducted through activities that identify, organize, and measure ordinally and cardinally the key performance factors, which allow the decision maker to understand the consequences of actions (Lacerda et al., 2012; Marafon et al., 2012; Ensslin et al., 2010; da Rosa et al., 2012). By adopting this worldview, the lenses listed in Table II were extracted from the concept of performance evaluation. They were then used to analyze the content of the selected articles. The first lens of analysis, singularity, seeks to understand whether the performance measurement models present in the sample recognize the uniqueness of the decision context and the actors. In the selected sample, it was found that only two of the 11 articles (Golec and Kahya, 2007; Moon et al., 2010) defined and operationalized the criteria from the perspective of an actor (here named decision maker; i.e. the person who has the authority and responsibility to change the current situation). The other papers dealt with the issue of performance evaluation in a generic way. From the singularity lens, a research opportunity emerged to structure an evaluation model for the solution of singular problems, recognizing the uniqueness of the actors and the organizational context. The second lens concentrated analysis on how selected articles identified the used criteria to evaluate HR management. It also expanded on how decision makers are involved in this activity and if articles recognize the limited knowledge of managers in the studied contexts. With respect to this lens, it was noted that two of the 11 articles (Golec and Kahya, 2007; Moon et al., 2010) took into account the need to expand the knowledge of the decision maker throughout the process of identifying and operationalizing the criteria. With this observation, a research opportunity emerges to present a method which focusses on the generation of knowledge in decision making with the aim to identify what is relevant to his or her specific context. The third lens in the systemic analysis had the goal of identifying the scales used in the selected articles. In this analysis, it was found that six of the 11 articles (Laitinen, 2002; Kahya, 2009; Medlin and Green, 2009; Trejo et al., 2002; Golec and Kahya, 2007; Moon et al., 2010) used the Likert scale in their evaluation models. The Likert scale is widely used as it is a quick and easy application, but it fails to meet an important property for the improvement of context, given its ambiguity regarding clarification of what is needed for improvements to be made. Besides this limitation of its use in people

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Systemic analysis lens

Lens 1: Singularity uniqueness of actors, context and time

Acknowledges that the context is unique? Lens 2: Process to identify the relevant aspects

How does the process build the criteria? Lens 3: Measurement of the relevant aspects

What are the scales used? Lens 4: Integration of scales

How is the integration process of the scales performed? Lens 5: Management

How Does it allow diagnosis of the current situation? what is the integration process of the scales performed? Does it provide process to generate improvement actions?

Source: The Authors (2012)

Table II. The systemic analysis Lens used to analyze the contents of the selected articles, theoretical constructs and relationshiop between the research opportunities and how MCDA-C attends them Theoretical constructs C1: Criteria for evaluating must be contextualised and developed in each situation, recognising the singular values of managers and singular resources available C2: Decision makers need to improve their understanding of the decision consequence in order to build criteria and scales of evaluation C3: Recognise the properties and limitations of ordinal scales, interval, and ratio C4: Recognise the need of reference level in order to set compensation rates of overall cardinal evaluation C5: Propose a method to realise the global diagnosis of the current situation and provide a way to create improvement without ambiguities How the MCDA-C attends The first step of MCDA-C is the contextualization that is destined to defined in view of who the model will be build The MCDA-C starts with unstructured interviews with de decision-maker and it continues to expand the knowledge of him/ her with concepts techniques and means-ends maps The MCDA-C used the MACBETH method in order to transform the ordinal scales to cardinal scales. Doing this, it is possible to use statistics operations properly The MCDA-C uses the reference levels of ordinal scales in order to transcend the known problems as rank reversal order The MCDA-C uses the knowledge supplied by ordinal scales to generate actions of improvements and it uses the cardinal knowledge to present the attractiveness of each action from the decision-makers perspective

management, the Likert scale only allows statistical operations, such as count, frequency, mode, and median (Hart et al., 2003; Setijono and Dahlgaard, 2007; Wang, 2009; Yan et al., 2001). From this analysis, a research opportunity emerges to present a methodology for evaluating performance and to make use of ordinal scales for the identification of what is needed to improve in each criterion. This will also present a transformation process from ordinal to cardinal scales and allow the use of all statistical operations, such as averages. The fourth lens focussed on seeking how the articles performed and integrated among scales. From this viewpoint, it was found that eight articles (Lee et al., 2009; Huang et al., 2011; Laitinen, 2002; Kahya, 2009; Golec and Kahya, 2007; Moon et al., 2010; Chen and Lee, 2007; Bititci et al., 2001) presented an integration process using cardinal integration. The other articles did not address this property. Despite this observation that eight articles integrated all criteria on a global scale, no single article recognized the need to use reference levels in each local scale to determine the constant level of integration. Without reference levels, the process incurs the most common critical mistake (Keeney, 1992, pp. 146-147) and the problem of rank reversal order is an important limitation of the AHP method (Bititci et al., 2001). From the lens of integration of criteria another research opportunity emerges: presenting a methodology that integrates all the criteria of the model and takes into account the reference levels in each ordinal scale. The fifth lens of the analysis will diagnose the current context, as well as generate actions for improvement. This particular analysis showed that all the articles contained a form of diagnosis of the current state, and that nine articles (Lee et al., 2009; Huang et al., 2011; Laitinen, 2002; Kahya, 2009; Medlin and Green, 2009; Golec and Kahya, 2007; Moon et al., 2010; Chen and Lee, 2007; Bititci et al., 2001) presented a numeric diagnosis and the others only presented a descriptive diagnosis. From these papers, eight articles (Lee et al., 2009; Huang et al., 2011; Laitinen, 2002; Kahya, 2009; Golec and Kahya, 2007; Moon et al., 2010; Chen and Lee, 2007; Bititci et al., 2001) presented the processes for ranking priority actions in order for improvement to occur. These observations show a maturing process of managing people, conducted by the scientific community, and take into account the selected sample. However, as noted under the lens of measurement, most articles use the Likert scale. This scale hampers the manager and his or her staff in understanding what needs to be done to continuously improve the compromised aspects in a given context. This is caused by the ambiguity provided by the psychometric Likert scale. Therefore, a research opportunity emerges to present a method that performs a cardinal diagnosis of the situation, enabling prioritization explicitly and unambiguously. Table II shows the theoretical constructs drawn from a sample of 11 relevant and well-cited articles on the topic of performance evaluation and HRM, the research opportunities identified and, therefore, the theoretical contribution of this paper. The next section will present the methodology and its correlation with the theoretical constructs. 2.3. MCDA-C The process of choosing a scientific research methodology should be aligned with the nature of the problem to be solved (Mel~ ao and Pidd, 2000). Research that addresses decision problems, such as Bana e Costa (1992), categorized these into two groups: the problematics of structuring and the problematics of evaluation.

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The problematics of structuring are designed to provide tools for understanding the problem and can unfold in rationalist or constructivist approaches (Roy, 1993). The distinction between these two groups is apparent through the limits of objectivity (Landry, 1995), where the constructivist approach focusses on the decision makers knowledge, while the rationalist approach focusses on physical properties to identify what is important to a particular decision. In addition, there are problematics of the evaluation of actions. Its operationalization is given by methods that make it possible for the evaluation of actions from the preferences of a decision maker. For Roy (1993), these problematics can be classified into four types: choosing the best action, the sorting of actions, screening, and describing the actions. Table III presents this taxonomy and it relation to the main methods of problematic decision aiding. This research aims to create knowledge in decision making through activities that identify, organize, measure, and integrate aspects that are necessary and sufficient for HRM. The goal for this research was structuring the problem from the constructivist perspective, where the MCDA-C is suitable and aligned to the problem. Keeney (1992), Bana e Costa (1993, 1999), Landry (1995), Roy (1996), and Ensslin (2000, 2010) consolidated the use of MCDA-C as a scientific instrument over the past two decades, although its origins can be found some 200 years ago:
. .

Roy (1996) and Landry (1995) limits of objectivity for decision aiding processes; Skinner (1986) and Keeney (1992) attributes (objectives, criteria) are specific to the decision maker in each context; and Bana e Costa (1993, 1999) MCDA convictions.

MCDA-C emerges as a traditional MCDA method to support decision makers in the contexts in which they have partial understanding and wish to increase their knowledge to better comprehend the consequences of their values and preferences. This feature links to the theoretical construct C1 of Table II. Furthermore, the MCDA-C method differs from the traditional MCDA method by having an initial phase of knowledge development known as the Structuring Phase. This feature links to the theoretical construct C2 of Table II. MCDA restricts decision support to two steps, formulation and evaluation, according to a defined group of objectives (decision maker with little or no participation), and thus it seeks to select the best alternative (optimal solution) from among the alternatives previously established (see Keeney, 1992; Roy and Bouyssou, 1993; Roy, 1996; Goodwin and Wright, 1998). Since MCDA-C is a branch of traditional MCDA, it has a step structure that allows for decision support in the following environments: conflicting, uncertain, and complex (Ensslin et al., 2010).
Structuring Evaluation Table III. Problematics of decision aiding and main methods related Source: The Authors (2012) Racionalist Racionalist Screening Sorting Selection Describing MCDA, AHP, MAUT, MAVT e SMART MCDA-C ELECTRE-TRI ELECTRE-II, III e IV ELECTRE-I e IS Soft Systems Methodology

Roy (2005, 1996, 1994) grouped MCDA researchers into three groups: rationalist, axiomatic or prescriptivist, and constructivist. MCDA-C is a constructivist approach that focusses on the process that seeks to scientifically expand the knowledge of decision makers, and to help them understand the impact of their decisions based on their own criteria (that are aligned with their values). To achieve these purposes, MCDA-C is organized into three sequential phases: structuring, evaluation, and recommendation, as shown in Figure 3. 3. Methodological framework The research is exploratory, applied, and carried out as a case study. It has the objective of broadening the knowledge of the Chief Technology Officer (CTO) by creating a HRM model based on knowledge demand in a global organization that develops home appliances. The data were gathered through non-structured interviews with the CTO and the Technology and General Manager (TGM) of the organization. Bibliographical research with an exploratory character was used to construct the theoretical framework and to broaden the understanding of the context under study, as well as to develop the adopted intervention instrument. The approach to the research problem shows qualitative and quantitative characteristics. The qualitative side aims to deepen knowledge about the context by identifying criteria and building ordinal scales. Whereas the quantitative side uses mathematical models to convert these ordinal scales into cardinal scales, to identify the compensation rates that serve to integrate the criteria of the model and allow global performance evaluation (Ensslin and Vianna, 2008). This qualitative and quantitative research forms part of constructivist models, such as in the MCDA-C case, by considering that initial knowledge is qualitative and then quantitative once measured mathematically (Ensslin et al., 2010). This calls for the use of performance evaluation

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MCDA-C 1. CONTEXTUALIZATION 2. VIEWPOINT FAMILY 3. CONSTRUCTION OF DESCRIPTORS 4. INDEPENDENCE ANALYSIS 5. CONSTRUCTION OF VALUE FUNCTIONS AND IDENTIFICATION OF CONVERSION RATES 6. IDENTIFICATION OF IMPACT PROFILE OF ALTERNATIVES 7.SENSITIVITY ANALYSIS 8. FORMULATION OF RECOMMENDATIONS Recommendation Phase Structuring Phase

Evaluation Phase

Source: Lacerda et al. (2011a, b)

Figure 3. The MCDA-C decision aiding phases

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tools that allow for a broader understanding of the KPIs to be chosen and represent the decision makers values in a HRM setting. 4. MCDA-C case study: HRM model based on knowledge demand For complex situations with multiple variables, conflicts of interest among stakeholders and relevant consequences on the final results, we recommended the use of MCDA-C, and follow the steps proposed in Figure 3. The case study was developed over six months, consuming 528 facilitator hours and 48 meetings through decision and the compilation of results. 4.1. Step 1: contextualization (soft approach to structuring) The research introduction incorporated the summary and the context of the problem. The facilitator, in conjunction with the decision maker, labeled the problem to explain the decision makers concerns succinctly and objectively. Therefore, following the steps of the MCDA-C the actors were identified according to Table IV. This step links to the first theoretical construct of Table II. 4.2. Step 2: viewpoint family Step 2 aimed to obtain all the possible primary assessment elements (PAEs) that explain the initial aspects, references, desires, goals, and constraints of the problem judged as relevant by the decision maker. With facilitator support, the decision maker identified 80 PAEs. MCDA-C recommends that information from PAEs is expanded by turning them into concepts. However, these concepts must represent the direction of the decision makers preference and its opposite psychological polar to motivate him or her to express the direction of preference (Eden et al., 1992). Thus, in the second stage the decision maker was asked to talk about each PAE and explain the purpose underlying it. He answered questions such as: What is the best and worst possible performance? What is considered a good and bad performance? What is the current performance (status quo)? What is the intensity of each performance? (The verb used in this final question reflects the intensity during the construction of the concept). Based on the above process, we created 80 concepts (shown in Table V as concepts 11 to 23). Note that the ellipsis (y) is read as instead of ; in other words, the present pole is preferable to or instead of , which corresponds to the psychological opposite. Table II illustrates the five concepts built from five of the 80 PAEs identified.

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Actor Stakeholders Decision maker Facilitator Actives stakeholders Agents Table IV. Actors Source: The Authors (2012)

Description

Responsibility

Chief Technology Officer Product Engineer People involved on the project Technology Manager General Manager Employees and customers

Make decision/validation Conduct the entire process Direct contribution to process Direct contribution process Direct contribution process Indirect contribution process

Based on knowledge acquired at this point (contextualization, PAEs, and concepts) and endorsed by the decision maker, the facilitator was encouraged to group the concepts into areas of concern. These accounted for the contextual aspects associated with the strategic objectives of the HRM model based on knowledge demand. Therefore, all concepts created were placed under each area of concern in order to group the initial concepts that reflected the values and properties of the decision maker (Bana e Costa and Ensslin, 1999; Ensslin et al., 2000, 2010). These activities link to the second theoretical construct of Table II. 4.3. Step 3: construction of descriptors 4.3.1. Means-end maps. The MCDA-C method considers the process of expanding knowledge and identifies hierarchical relationships between concepts and influence. Thus, it can be used as a tool to achieve means-end maps (Bana e Costa and Ensslin, 1999; Ensslin et al., 2000, 2010). This process aims to obtain relevant information from the decision maker for each identified concept. Some key questions considered were: How can the end concept be obtained? Why is the end concept important? (Ensslin et al., 2010) In the cognitive map, the clusters of concepts must be identified because they represent the map in an exhaustive process. In this way, each cluster in the meansend map has an equivalent point of view in the hierarchical structure of value. This makes it possible to transfer knowledge from the means-end map to the hierarchical structure of value. Based on the knowledge acquired, Figure 4 demonstrates the process for FPV2 (fundamental point of view)-Engineering and all means-ends relations created. The same process was used for the other eight FPVs. It is also important that the initial clusters are homogeneous, understandable, concise, manageable, essential, isolable, measurable, non-redundant, and operating (Keeney, 1992; Ensslin et al., 2001; Roy, 2005; Ensslin et al., 2010). Clusters must be dismembered until they meet the above properties; only then may they become part of the hierarchical structure of value and thus become a FPV. The next MCDA-C step proposes the construction of the hierarchical structure of value. This graphical representation aims to expand current knowledge, absorbing the whole structure of influential relationships developed to organize those aspects to explain the values of the decision maker in the context (Keeney, 1992). Figure 5 shows this representation to the FPV level for the nine identified FPVs. The same process was conducted for the elementary points of view (EPVs) level (Figure 7 shows the hierarchical structure of value for the EPV process). The means-end maps activities relate to the second theoretical construct of Table II.
Id 11 12 13 14 15 PAE/concept Ensure that all involved in the project are engaged y Having no formal documentation of what was discussed Must-integrate individuals within and outside the company y not include the necessary knowledge Must coordinate activities as expected by the leadership y not fulfilling activities for lack of experience and skill Experience in supervision y Adopt practices differing demands by the company and other benchmarking Have technical expertise in supervision y Commit project management

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Table V. Primary assessment elements and concepts

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Figure 4. Means-end map relationship clusters: conduction and process

Source: The Authors (2012)

4.3.2. Hierarchical value structure. After the hierarchical value structure was established, we returned to the means-end maps and repeated the process of identifying clusters. But now it takes place within each of the existing clusters resulting from the sub-clusters in the hierarchical value structure. These sub-clusters are EPVs in the expanded hierarchical value structure. This FPV decomposition must be followed to obtain EPVs that represent the context and that can be measured in a homogeneous and unambiguous way. 4.3.3. Descriptors (KPIs). The next stage of the MCDA-C method suggests the construction of ordinal scales to measure the points of view, and participation of the decision maker is crucial. He must work interactively with the facilitator, looking at the lowest sub-cluster to obtain an understanding associated with it in order to identify the property used to express his or her own values. Thus, each ordinal scale was created to best represent his or her judgment of values. During this meeting, the decision maker was asked about the reference levels (anchors). Bana e Costa and Ensslin (1999), Ensslin et al. (2000, 2010), and Roy (2005) all denominate two levels: good, which establishes the lower boundary of the considered market performance to excellence; and neutral, which is the limit between the considered market performance and jeopardizing performance. However, performance between good and neutral is called market performance. Once the structuring phase had been concluded, we had a qualitative understanding of the context. Following the MCDA-C stage, the next step is the expansion of that knowledge by incorporating more information to allow for the transformation of qualitative knowledge (ordinal scale) into a quantitative model (cardinal scale); known as the evaluation phase. This step attends the third theoretical construct of Table II. 4.4. Evaluation phase The structuring phase built a qualitative model to reflect the aspects deemed necessary and sufficient for the decision maker to evaluate. This process allowed for the construction of a model with ordinal scales using numerical symbols for their representation. However, according to Ensslin et al. (2001), Barzilai (2001), and Azevedo (2001), these numbers are only alpha-numeric symbols that are not part of the set of real numbers. Therefore, any function that uses mathematics or statistics would not be able to make use of these symbols. 4.4.1. Step 4: independence analysis. The MCDA-C methodology uses the compensatory model and requires that the criteria measured be preferentially independent. A criterion is considered preferentially independent of other criteria when the difference in attractiveness between the levels of reference remains stable when any alternative impacts at different levels of performance in other criteria.

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HUMAN RESOURCE MANAGEMENT MODEL BASED ON KNOWLEDGE DEMAND

Organization

Conversion

Reproduction

FPV 1Management

FPV 2Engineering

FPV 3Allocation

FPV 4 Technical Solutions

FPV 5 Materialization

FPV 6Preliminary Assessment

FPV 7 Detailing

FPV 8 Reproducibility

FPV 9 Final Assessment

Source: The Authors (2012)

Figure 5. Hierarchical value structure

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In the constructivist approach, the independence occurs preferentially, i.e. it is not a statistical independence but the perception of the decision maker. A variation of attractiveness in this analysis is that it identifies the criteria analyzed as dependent and these cannot be attributed constant to the criteria set out in isolation. In the case of dependence, we must create a new scale of measurement that represents the criteria dependent on one single performance indicator. In this research, all indicators and their reference levels were presented to the decision maker. The decision maker then noted that these were preferentially independent criteria, i.e. the facilitator (from the decision makers perspective) might assign integration constants for the proposed indicators, as showed in the following sections. 4.4.2. Step 5: construction of value functions and identification of conversion rates. The following sections transform ordinal scales into cardinal scales and integrate them in a global cardinal scale. 4.4.2.1. Construction of values functions. For this stage, the cardinal scales were built using information on the difference of attractiveness between ordinal scale levels and Macbeth-M software, resulting in cardinal scales that would meet the value judgments of the decision maker: value functions. The Macbeth method determines the construction of each value function through a semantic judgment matrix. The decision maker is asked to speak about all pairs of combinations at a descriptor level and inform us of his preferred intensity. The M-Macbeth software uses an ordinal scale with seven levels of attractiveness for the judgment: null, very weak, weak, moderate, strong, very strong, and extreme. Once the facilitator has filled in the matrix, the software uses linear programming models (Bana e Costa et al., 2005) to calculate the solution space that meets the judgments of the decision makers preferences. This proposes a scale that represents the value function of the descriptor. The decision maker tests and adjusts the scale to legitimate it. Each value function is normalized to reference levels to make comparable value functions and to develop a global model. This function is performed by assigning the value 0 to the neutral reference level and 100 to the good reference level. For the case study, we present the transformation of the descriptor (ordinal scale) of EPV experience in supervision in its respective value function. The processing is shown in Figure 6. Once the construction of the value functions has been completed, the decision maker can check the local impact of the actions at each level (operational view) to establish the cardinal measurement. This information expands the knowledge and possibilities of the analysis of the decision maker, but it still does not allow for comparisons between alternative impacts (profile impact) at tactical and strategic levels. Therefore, it was necessary to create the conversion rates for all EPVs as presented below.

Figure 6. Transformation process of a descriptor experience in supervision, using the MACBETH software

Source: The Authors (2012)

This step links to the third theoretical construct of Table II. 4.4.2.2. Identification of conversion rates (compensation rate). The unique aggregate of synthesis in the proposed model in MCDA-C requires constant compensation rates. This property is guaranteed by testing their independence from the cardinal-preferred reference levels. Therefore, before the compensation process begins, it is necessary to run the independence preferred cardinal test between all pairs of value functions for the range levels between neutral and good. After this has been completed we can determine the compensation rate. We used a comparison method in Macbeth to obtain the rates described above. The construction process of the compensation rates was carried out in three steps: identification of alternatives, the ordering of alternatives, and construction of the semantic judgment matrix of the attractiveness differences of the alternatives. We used the Roberts matrix to establish the alternatives and organize them before making value judgments. The principle of this matrix is to score alternatives and to sort them in descending numerical order. After the alternatives have been created and ordered, the process is repeated in the same way using the M-Macbeth software, which results in compensation or replacement rates. The process was repeated in all the hierarchical value structures to allow for the disclosure of the value judgments and preferences of the decision maker, to measure the knowledge of the candidates for the realization of a project. This evaluation allows the manager to make the best human resource allocation based on knowledge demand, as well as highlight their strengths and improvement areas. Figure 7 shows the hierarchical value structure containing the compensation rates for the FPV2-Engineering and other EPVs, according to the reference levels and intensity of preference of the decision maker. This step links to the fourth theoretical construct of Table II. 4.4.3. Step 6: Identification of impact profile of alternatives (global evaluation). After the model has been created according to MCDA-C, it becomes possible to evaluate the impact of the alternatives (candidates) to the research problem human resource allocation in a project management model, based on knowledge demand to construct knowledge of the status quo. The equation that represents the local value (partial global model) for action a is calculated in the equation below: nk X VFPVk a wi;k V i;k a: 1
i 1

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VFPVk(a) is the global value for action a to the FPVk; Vi,k(a) the partial value of action a to the criterion i, i 1, y, n; a the action to be evaluated; wi,k the substitution rates to the criterion i, i 1, y, n; nk the number of criteria to the FPVk; k: FPV number. The global value is represented by the equation (complete model) and measures the chosen alternative a (in this study the engineer has three years experience) that sum nine FPVs constructed, as shown in Equation (2), and replace the values in the generic equation for local values (FPV) in Equation (1): VGlobal a w1 VFPV1 a w2 VFPV2 a w3 VFPV3 a w4 VFPV4 a w5 VFPV5 a w6 VFPV6 a w7 VFPV7 a w8 VFPV8 a w9 VFPV9 a 2 VGlobal(a) is the global score (impact profile) of the model. This paper is restricted to FPV-engineering because of the didactic and volume of information. Equation (3) presents a detailed equation of FPV2-engineering. The base

IJPPM 62,7

HUMAN RESOURCE MANAGEMENT MODEL BASED ON KNOWLEDGE DEMAND

Global Score FPV 2 Engineering V FPV2

Organization

Conversion

Reproduction

Good

750

FPV

FPV 1 Management

FPV 2 Engineering

FPV 3 Allocation

Alternative 1: 44 Neutral

EPV 37% EPV

Conduction

Process 45% New components 58% 42% 3D ModelSoftware Experience with Systems Number of systems already used (ECR, visions, SAP, classification and creation) a 5 or more Solid, drawing, surface and sheetmetal V(a) 122

Alternative 2: 37

18% Manufacturing

Points of approval

EPV % Of service of the companys standard check list in the middle of the last projects a V(a)

Descriptor (KPI)

Degree of skill in modeling (3D software) a V(a)

Number of manufacturing processes and knowledge that contributes to the project (ex: extrusion) a 7 or more V(a) 137 GOOD level

100%

125

EXCELLENCE
100 4 100 5 to 6 100

95 to 99%

100

90 to 94%

80

Solid, drawing and surface or sheetmetal Solid and drawing

70

67

3 to 4

62

MARKET
40 2 33 2 25 NEUTRAL 0 1 0 1 0

50 to 89%

40

10 to 49%

Solid and drawing or sheetmetal Drawing

JEOPARDIZE
1 to 9% 50 80 40 0 77 0 25

level

0 D20

Nothing D21

80 D22 D23

Figure 7. Status quo engineer three years experience newly hired engineer

Legend:

Engineer 3 years experience (Alternative 1) Newly hired engineer (Alternative 2)

Source: The Authors (2011)

alternative for analysis (status quo) was an engineer with three years experience, evaluated into FPV2-engineering to generate a score in FPV, as shown in Equation (3): VFPV2 a 0:550:2Vintegration 0:350:39Vpmi 0:61Vsupervision experience 0:29Vexecution 0:16Vdelegation 0:450; 37Vpoints of approval 0:450:58V3Dmodel-software 0:42Vexperience with systems 0:18Vmanufacturing

The operational process illustration was for FPV2-engineering, but to obtain the value for each FPV the same process was run for all FPVs in order to achieve a global score. The equation is completed for each point of view, from the lowest to the highest level, in the form of the hierarchical structure of the corresponding value. After the

construction of the model, the decision maker can make decisions, understand their impact (locally and globally), and evaluate suitable alternatives. He can also easily identify improvements to increase alternative performance. Global evaluation of the current situation (status quo) can start from a base alternative (initially) for assessment. For the case studied, the CTO (decision maker) counted on a group of engineers with varied skills and work experiences. He decided to use two alternatives: alternative 1 (status quo): and engineer with three years experience, and alternative 2: a newly hired engineer. This would allow the decision maker to check the impact of the worst case scenario according to his plan. Once alternative 2 was considered (market or excellence result), the decision maker could challenge the new engineer and, at the same time, attend to his required job functions, develop talent, manage the team, and save money. This test will allow for a diagnosis (score) of the same profile and make improvements, if considered necessary. Figure 7 shows graphically and numerically the local (operational) and global (strategic) impacts of the alternatives with a focus on the four descriptors. In this way, it is easy to note that the engineer evaluated, even with his experience of the company, that knowledge demands were required for the project under review at a market level (total value 44). Once alternative 2 had been analyzed, the possibility of allocating a newly hired engineer (less than one years work experience in the company) would jeopardize performance (total value 37). Thus, the decision maker estimated the success of a project depending on his decision in relation to the available alternatives. For this study he chose alternative 2. This step attends the last theoretical construct of Table II because the MCDA-C provides tools to transform the qualitative model to a quantitative model and, in turn, show the current overall situation from the decision makers perspective. 4.4.4. Step 7: sensitivity analysis. The model allows for the development of a sensitivity analysis on the impact of alternatives on the scales, and on the attractiveness difference in the cardinal scales as well as on the compensation rates (Lacerda et al., 2011a). The sensitivity analysis will explain what happens to the overall evaluation of the current situation if a certain set of actions are funded by the decision maker. Another way of conducting sensitivity analysis is to verify how the actions are robust in the face of the model change. For example, if a criterion has its compensation rate increased will this change modify the order of alternatives? How much can such changes in compensation rates be completed without changing the priority of previous actions? In summary, the sensitivity analysis is useful when: the decision maker wants to develop scenarios about the consequences from certain sets of actions that can be performed; and, when the decision maker wants to know the consequences of any change in the compensation rate in the priorities presented by the model before the change. 4.5. Recommendation phase The MCDA-C method valorizes the recommendation phase because of the potential to easily develop opportunities to improve the performance of the alternatives. 4.5.1. Step 8: formulation of recommendations, improvement actions and opportunities within existing resources. The opportunities for managerial improvements are evident after the model building. It is easy to visualize the current profile (status quo) and the impact of each improvement action on the global score, as well as allowing further analysis, such as prioritization, according to the judgment of the decision maker. Since the only reasonable alternative was the engineer with three years

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752

experience (alternative 1) due to the impossibility of training or hiring another professional the decision maker decided to improve alternative 1 to increase the chances of success. To select those EPVs to be evaluated and propose improvements in the PVF2 (engineering status quo 44) based on the above assumptions and cost limitations, the facilitator and decision maker elaborated on an action plan. This plan considered the improvement of four descriptors (D20, D21, D22, and D23), increasing one level and thereby generating the improvement actions (b1, b2, b3, and b4), as shown in Figure 8. The action plan was developed based on the process improvement actions that depended only on the efforts of the people involved and without relevant investment. Therefore, an action plan was legitimized by the decision maker. He then created a specific tracking project for these improvements to guarantee 100 percent of the actions were implemented for FPV2-engineering. As a result of these actions, the global score of the FPV2 increased 11.68 points from the base score of 44 (status quo), to 55.68 after the recommendation phase.
HUMAN RESOURCE MANAGEMENT MODEL BASED ON KNOWLEDGE DEMAND

Global Score FPV 2Engineering V FPV2

Organization

Conversion

Reproduction

Good FPV FPV 1 Management FPV 2 Engineering FPV 3 Allocation Alternative 1: 55 Alternative 2: 44 EPV 37% EPV Points of approval 58% EPV % Of service of the companys standard check list in the middle of the last projects a 100% V(a) 125 3D ModelSoftware Degree of skill in modeling (3D software) a V(a) 5 or more Conduction Process 45% New components 42% Experience with Systems Number of manufacturing Number of systems already processes and knowledge used (ECR, visions, SAP, that contributes to the project classification and creation) (ex: extrusion) a V(a) 122 a 7 or more V(a) 137 GOOD level 18% Manufacturing Neutral

Descriptor (KPI)

95 to 99%

100

Solid, drawing, surface and sheetmetal

EXCELLENCE
100 70 2 4 100 3 3 67 33 3 to 4 62 5 to 6 100

90 to 94%

80

Solid, drawing and surface or sheetmetal Solid and drawing Solid and drawing or sheetmetal Drawing

MARKET
40 2 2 25 0 0 0 25

50 to 89%

40

4
NEUTRAL level

10 to 49%

1 0

1 to 9%

50

40

77

JEOPARDIZE

Figure 8. Engineer three years experience after recommendation phase EPV process

80 D20

Nothing 80 D21

D22

D23

Legend:

Engineer 3 years experience after action plan (Alternative 1) Engineer 3 years experience (Alternative 2)

Source: The Authors (2012)

This step relates to the last theoretical construct of Table II because the MCDA-C uses knowledge supplied by the ordinal scales to generate actions for improvement, and then uses the cardinal knowledge to present the attractiveness of each action from the decision makers perspective. 5. Conclusions and recommendations for further research The final product of this study was human resource allocation in a project management model based on knowledge demand, which allowed for expanding knowledge and understanding of the CTO (decision maker). Because of the complexity and conflicting interests of stakeholders, the MCDA-C method was selected as an intervention instrument to identify the objectives, evaluate their impact, and aid managers enduring managerial difficulties. The process identified 80 PAEs that were transformed into concepts and descriptors, which generated an expansion of knowledge and understanding of the problem by the decision maker and, consequently, others involved. The decision maker actively participated in all steps of the process to legitimize them. Moreover, the decision maker could use the model as a management tool to improve opportunities with the clear understanding of the impact on both the local and the global scores of each action. The theoretical contribution of this paper is based on theoretical constructs built from research opportunities observed from 11 relevant and well-cited papers about performance evaluation and HRM. These constructs were built using ProKnow-C, a systematic way to build the researchers knowledge about a scientific topic. At the beginning, the human resources manager considered the method both slow (after his focus was to manage all of the project and people) and hard (due to his active participation and deep involvement during the process). However, the benefits of measuring the indicators are were not only qualitative; after showing him the graphic model and the possible improvement opportunities, he promptly changed his mind and provided favorable support. Table II presents the theoretical constructs built from this studys research and highlights how MCDA-C attends to them, as observed from the case study section. The MCDA-C methodology has demonstrated its usefulness in the process of decision aiding in other contexts such as project management (Lacerda et al., 2011b), R&D management (Marafon et al., 2012), healthcare technology management (De Moraes et al., 2010), and presented in a HRM context in this study. However, it is recommended that the method be used in other specific people management problems, such as professional selection, reward programmes, professional career planning, and promotions. The adequacy of the method needs to be observed and improvements made to this decision aiding methodology.
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Lacerda, R.T.O. (2012), Strategic decision aiding methodology for continuous generation of competitive advantages from the organizational resources, thesis presented for the degree of Doctor of Production Engineering Federal University of Santa Catarina, polis. Floriano

Improved decision aiding

About the authors Sandra Rolim Ensslin has degree in accounting science by Catholic University of Pelotas, master in Production Engineering by Federal University of Santa Catarina (UFSC) and doctor in Production Engineering by UFSC (2003). She is Program Coordinator of Graduate Studies in Accounting and assistant professor at the UFSC. She has experience in Accounting and Production Engineering, working actually in the following topics: methodology of multicriteria decision aiding construtivist, organizational performance evaluation, intellectual capital, intangible assets and accounting research. Leonardo Ensslin has a post-doctoral position in Multicriteria Decision Aiding at Lancaster University (2000) and has a PhD in Industrial Systems from the University of Southern California (1974). Leonardo Ensslin is professor and coordinator of organizational intelligence in the Department of Systems Engineering and Production at the Federal University of Santa Catarina (UFSC) on undergraduate and post-graduate courses. His degree in mechanical engineering was awarded by UFRGS and he has a masters in Production Engineering from UFSC. He is a consultant and lecturer in analysis and performance evaluation, organizational improvement systems, innovation and decision aiding processes. Felipe Back is currently a master student in Business Intelligence (Production Engineering department) from the Federal University of Santa Catarina and he graduated in Production Engineering. Back has spent many years working in a global home appliances company as Project leader (PMO). Felipe Back is the corresponding author and can be contacted at: febacks@gmail.com rio Tadeu de Oliveira Lacerda is Doctor in Production Engineering (2012) from the Roge Federal University of Santa Catarina, has a masters degree in Production Engineering from the Federal University of Santa Catarina (2009), Degree in Business Administration from Universidade Metropolitana de Santos (1997) and post graduate degree in Information Engineering by FASP (1999). Rogerio Lacerda is professor in the Post-graduate program in Business Administration from the University of Southern Santa Catarina (UNISUL). His current research interest is decision aiding, performance measurement, strategic management and operations management. Also researchs on the topics of project management, portfolio and business processes. He has experience in Administration, with emphasis in Project Management and is PMP certified by PMI professional. OPM3 participated in the project Project Management Institute.

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