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INFLUENCE OF
LABOUR PRODUCTIVITY ON THE COST PERFORMANCE OF THE TRADITIONALLY PROCURED
PROJECTS
ABSTRACT
Based on low
productivity problems facing the global construction industry, this study
evaluated the influence of labour productivity on cost performance. The
objectives include to identify productivity related factors influencing cost
performance; determine the most significant productivity factor influencing
cost performance, and to evaluate the relationship between labour productivity
and cost performance. A questionnaire
survey was used to elicit relevant data from stakeholders in construction and
project management (including other built environment professionals) in the
construction industry in Akwa Ibom state. Eighty-two subjects were targeted and
data collected was subjected to analyses using appropriate test statistics.
Test statistics include percentages, mean item score and Spearman Ranked
Correlation test. The study identified productivity related problems
influencing cost performance; and conclude that the productivity of workers in
construction sites does not correlates cost performance in these project. The
implication is that, cost budgeting and planning for new projects fully
acknowledged the low productivity problems and estimated often take steps to
provide buffers for possible variation that may eschew.
CHAPTER ONE
INTRODUCTION
1.1 Background
to the Study
Construction
is the world’s largest and most challenging industry. The industry is highly a
dynamic sector and plays a very important role in the development of a country.
However, construction industry, faces chronic problems such as poor
productivity, poor performance of time and cost etc, as reported only 37.2% of
projects were completed within their predetermined cost. This was as a result
of lack of investigation on construction labour productivity and cost
performance.
Butler (1986)
in Anthil and Wood-Head (1990) defined productivity as ‘the rate between output
and input’ and industrial productivity as ‘the arithmetical ratio between the
work product and he total resources used.
Borcherding and Liou (1986) defined productivity as ‘the relationship
between input and outputs’. Based on this view, Construction productivity can
be dealt with as the measure of value of construction works in relation to the
total cost of labour, plant and materials actually used in the execution of the
work.
Labour is
one of the basic requirements of the construction industry and is usually
related to manpower. In other words, labour productivity was defined by Drewin
(1982) as the ‘amount of goods and services provided by a productive factor
(manpower) in the unit of time’.Gido and Clement (2003) mentioned that cost
performance is an effective technique in project management effort expended and
it is used to measure the efficiency of total cost to budgeted cost. It is
found that it is important to study more details on cost performance of
building and it is agreed by Ashworth (1994) that ‘cost studies of building
consist of the application of techniques and expertise of economies to
construction projects’. Also, it is to ensure available resources are used
efficiently to increase the level of productivity in construction work.
In the
construction industry, site workers, account for approximately 40% of the cost
of project thus a relationship is established between labour productivity and
cost performance. In Nigeria’s construction industry for instance, companies
are currently applying various non-financial incentives schemes aimed at
operative productivity, this has significantly improved cost efficiency. If the
concept of productivity of labour is properly understood, appreciated and
facilitated, there will be an improvement of cost performance of projects. This
will in effect, enhance workers out-put and further contribute to cost
performance. It is in the light of this, that this research study on the
Influence of labour productivity on the cost performance has been embarked
upon.
1.2 Statement of the Problem
Many factors
are responsible for the influence of labour productivity on cost performance in
project. These factors when not put in place could bring about reduction in
level of productivity and consequently affect cost performance of
projects. There has been lack of
investigation into labour productivity and cost performance which is probably
due to the low level of awareness of the merits of such investigations. This
problem has overtime denied construction works of its ideal cost and if
un-attended to, it might in the nearest future overshadow the important
potentials of improved labour productivity.
Another
problem that has been identified is that of inconsistency in the level of
labour productivity. This has subsequently affected cost of the project. It is
therefore imminent for this problem to be assessed and solved so as to
institutionalize a consistent standard for construction projects.
Low level of
motivation and incentives such as welfare packages, awards to best worker,
award to longest serving staff all, serve as a dependable instrument for
improving labour productivity. But this has not been found in construction
industry. Finally, this study was embarked upon to ascertain how improved
productivity would influence cost performance. This study seeks to provide
solutions to the above identified problems.
1.3 Aim and Objectives of the Study
The aim of
this research is to evaluate the influence of labour productivity on the cost
performance of traditionally procured projects. The objectives of this study
are as to:
• identify productivity
related factors influencing cost performance
• determine the most
significant productivity factor influencing cost performance
• evaluate the relationship
between labour productivity and cost performance
1.4 Research
Questions
The following are the research
questions:
• What productivity related
factors influences cost performance?
• What is the most
significant productivity factors influencing cost performance?
• What is the relationship
between labour productivity and cost performance?
1.5 Research Hypothesis
Hypothesis
Null
Hypothesis (Ho): there is no relationship between labour productivity and cost
performance of a building project
Alternative
Hypothesis (H1): There is a relationship
between labour productivity and cost performance of a building project
1.6 Significance of the Study
Research
work such as this is not merely done to fulfil an academic curriculum. It is
expected that it should be a concerted effort to broaden or add to an existing
knowledge on a particular subject, or more so establish a logical and important
fact as a new contribution to the line of profession. Productivity of labour
and cost performance of construction projects is as important to construction
and national economic growth as it is vast and complicated. It is therefore
imminent that further studies and researches be carried out to consolidate the
already existing knowledge of it.
Construction
clients, contracting organizations, specialist, consultants and suppliers,
individual professional contractors, lecturers and students in the construction
and allied field would find the study very useful as it will contribute to
their own effort to optimize their level of involvement in construction
activities. Based on the results and findings of this research work,
construction stakeholders, would be able to appreciate and control the
parameters involved in the productivity and cost performance concept of
construction projects.
1.7 Scope of the Study
The
influence of labour productivity on cost performance can be studied in any
construction project throughout Nigeria. However, due to the outrageous cost of
covering a wider area, this study has been limited to traditionally procured
projects in Uyo capital city of Akwa Ibom State. Furthermore, due to the large
scope of construction project the study was further limited to building
construction projects.
1.8 Organisation of the Work
This
research work is divided into five (5) chapters the first chapter contains the
introduction which includes background of study, statement of problem, Research
Questions, Aim and objectives, hypothesis, significance, scope and limitation
of study. Chapter two (2) reviews the literature of related works while chapter
thee (3) is the research methodology which includes Research Design, sampling
Techniques, instrument of data collection and method of Data Analysis. Chapter
four (4) is the data presentation and analysis while chapter five contains the
discussion, and recommendations.
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