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Influence Of Labour Productivity On The Cost Performance Of The Traditionally Procured Projects
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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.
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ABSRACT - [ Total Page(s): 1 ]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 construc ... Continue reading---
