Influence Of Labour Productivity On The Cost Performance Of The Traditionally Procured Projects

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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 Research Objectives

1.3.1 General Objective of the Study

To establish the influence of labour productivity and its underlying factors on the cost performance of traditionally procured projects in Akwa Ibom State

1.3.2 Specific Objectives of the Study
  1. To determine the influence of type of labour on cost performance of building projects in Akwa Ibom State, Nigeria
  2. To determine the influence of hiring method on the cost performance of traditionally procured projects in Akwa Ibom State, Nigeria
  3. To determine how the level of training of construction workers influence the cost performance of traditionally procured projects in Akwa Ibom State, Nigeria

1.4 Research Questions

  1. How does the type of labour influence the cost performance of traditionally procured projects in Akwa Ibom State, Nigeria?
  2. How does method of hiring labour influence the cost performance of project time in building projects in Akwa Ibom State, Nigeria?
  3. How does the level of training of construction workers influence cost performance of traditionally procured projects in Akwa Ibom State, Nigeria?

1.5 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.


1.6 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.


1.7 Organisation of the Work

This research work is divided into five (5) chapters

  1. 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.
  2. Chapter two (2) reviews the literature of related works
  3. Chapter thee (3) is the research methodology which includes Research Design, sampling Techniques, instrument of data collection and method of Data Analysis.
  4. Chapter four (4) is the data presentation and analysis
  5. Chapter five contains the discussion, and recommendations.

Chapter Five


Summary, Conclusions and Recommendations

5.1 Summary of Findings

5.1.1 Sample Characteristics

The study sampled total of 239 participants Of the 239 questionnaires issued to the selected sample, 159 were returned and responded to, yielding a response rate of 71%. Among specific categories of the respondents, the breakdown was as follows: Project Developers with NPDA (73%), Project Contractors independent (71%), Building Contractors NCA 4 and above (74%) and Project Managers (65%). The study collected background information concerning the cost performance of traditionally procured projects in Akwa Ibom State. The data that were included in this section comprised of data on gender, age, length of service, and level of education of respondents.
First, gender characteristics revealed that males were more than females indicating that females’ participation in building projects was lower than that of males. Secondly, the findings suggest that age is a factor in building projects with old aged participants showing keen interests. Comparison in the means of ages of both females and males participants using independent T-Test showed significant results at .05 levels (t=.438, d=167, p=.015). Findings of the study showed that majority of participants (40%) in the building projects in Akwa Ibom State had worked in the industry for more than six years. Only 21.3% of the respondents had worked for less than two years in the building projects.

Finally, regarding the level of education, majority of participants (2.7%) had attained a diploma level of education. This level was followed by participants with university education having a bachelor’s degree (37.3%). The participants with masters degree were few (10.1%). Ch-square test of independent between gender and level of education did reveal significant results at .05 levels (χ2 =92.456, d=1, p =.000).


5.2 Conclusions

First, from the results of findings, majority of respondents strongly agreed that both mechanical and manual labour (84.6%), cheap manual labour (78%), high speed of mechanized labour (79.9%), and better quality of mechanized labour(72.2%) all enhanced the type of labour. In addition, Pearson correlation coefficient between the type of labour and cost performance of traditionally procured projects (r=.754, p=.000) shows positive and highly significant results at .05 levels. The study can conclude that the enhancement of the type of labour leads to positive cost performance of traditionally procured projects in Akwa Ibom State.

Secondly, in the summary of findings, the results showed that majority of participants indicated that in using imported materials, artisans charged cheaper for labour and are able to work faster with results of best products. The correlation results indicated that there was apositive and significant relationship between source of building materials and cost performance of traditionally procured projects. The study can conclude that the enhancement of the source of building materials leads to positive cost performance of traditionally procured projects in Akwa Ibom State.

Thirdly, results also show that methods of hiring labour determines the cost of labour , either by using permanent labour was compared with cost of labour using casuals. It was also found out that the use of permanent labour as opposed to casual labour enhances speed of work and thus reduces building project completion time. The results also show that the method of hiring labour in building projects is directly related to their performance. The study can conclude that the enhancement of the methods of hiring labour leads to positive cost performance of traditionally procured projects in Akwa Ibom State.

Finally, the study findings showed that majority of respondents indicated that high level of training of construction workers ensures that projects are completed within the projected time frame and with best quality finishes, and satisfies customers more. In addition, Pearson correlation coefficient between the level of training of construction workers and cost performance of traditionally procured projects (r=.714, p=.013) shows positive and highly significant results at .05 levels. The study can conclude that the improvement in the level of training of construction workers leads to positive cost performance of traditionally procured projects in Akwa Ibom State.


5.3 Recommendations

The study findings revealed that the type of labour greatly influences the cost performance of traditionally procured projects. In particular, it was observed in the study that mechanized labour is cheaper than manual labour. However, a sizeable number of participants were still applying manual labour as a popular type of laour. This negatively affected cost performance of traditionally procured projects in Akwa Ibom State. This study recommends enhanced type of labour i.e. mechanized labour as opposed to manual labour.

The results of findings showed that the cost performance of traditionally procured projects in Akwa Ibom State is to a large extent influenced by the source of building materials. For instance, by using imported materials, participants indicated that artisans charged cheaper for labour, contrary to what they charged for in using local materials in building projects. However, there are a number of participants with a quest of using local materials in place of imported material only. The study therefore recommends that those developers interested in enhancing performance in building projects should use a mix of both local and imported materials.

The study findings indicated that the method of hiring labour greatly influenced the cost performance of traditionally procured projects in Akwa Ibom State. The study has in particular concluded that the use of permanent labour was preferred to using casuals. The study also established that use of permanent labour reduced the cost of labour and enhanced quality. This study recommends that developers should thoroughly interrogate the methods of hiring and in specific consider more the use of permanent labour as opposed to casuals. The study findings showed that the level of training of construction workers enhances cost performance of traditionally procured projects. However, majority of participants had only attained diploma level of training. The study recommends that all participants should enhance their level of training.


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