An Appraisal Of Performance Measurement Practice Of Construction Firms In Nigeria

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An Appraisal Of Performance Measurement Practice Of Construction Firms In Nigeria


Performance measurement is crucial to the construction industry in order to improve the performance of the industry and most importantly achieve continuous improvement. The traditional approach to performance measurement has been criticised severally resulting to an evolution that brought about contemporary performance measurement frameworks. These frameworks have been adopted by several construction industry especially in the UK, US, Chile and Brazil. However, most organisations within the Nigerian Construction industry mostly present their financial reports (which are mainly financial measures) to portray their performance and there are no available research that presents elaborate information on the industry‟s performance measurement practice.

The Nigerian Construction Industry is faced with several problems bordering on poor performance.The study appraised the performance measurement practice of construction firms in Nigeria. A survey questionnaire was conducted on a randomly selected 50 small and medium sized construction firms in Abuja, Nigeria. Data were analysed using the descriptive statistics method including tabulation, percentages and charts. The results of the study revealed that most construction firms are interested in how they perform and do measure their performance.

The study also shows that most of the construction firms still rely on financial measures (which has been highly criticised).Findings from the study also indicate a low awareness/implementation of performance measurement and performance measurement concepts. Findings also revealed that the most adopted performance measurement framework is the Balanced Scorecard.

Chapter One


1.1 Background To The Study

The construction industry is a fundamental economic sector that permeates most of the other sectors as it transforms various resources into physical, economic and social infrastructure necessary for socio-economic development (Ministry of Works, 2003). In Nigeria, the industry occupies an important position in the economy and has great potentials of becoming one of the biggest construction markets on the planet yet, it contributes less than other industries (Aibinu and Jagboro, 2002; Construction Overview, 2011). The Nigerian Construction Industry (NCI) is growing fast and has outgrown most sectors of the economy yet, its contribution of only 3.2% to the Gross Domestic Product (GDP) is very low (Dantata, 2008; Construction Overview, 2011).

The performance of the construction industry has considerable impact on the economy (Bon-Gang and Fan, 2010). The industry, globally, has been under tremendous pressure to improve its performance and several calls have been made in this regard (Kulatunga et al., 2005).In Nigeria, the NCI is faced with problems such as construction delays, time and cost overruns, abandonment of projects at various stages of completion, lack of skilled local labour, power shortage, unavailability of materials, corruption, unethical practices and lack of capacity to deliver (Aibinu and Jagboro, 2002; Dantata, 2008; Kolo and Ibrahim, 2010; Ayodele et al., 2011; Oyewobi et al., 2011). The industry suffers the problems of inefficient policies and practices, weak institutions and adverse business environment, alongside complex social and cultural practices (Aniekwu and Audu, 2010). The performance of the industry has been a concern to its stakeholders

An Appraisal Of Performance Measurement Practice Of Construction Firms In Nigeria

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