CH 4

Ch 4
Measuring Productivity in the

Construction Industry
Why
Measure Productivity?
What is Labour Productivity?
Productivity = Output / Input
(Planned hours / Worked hours)
Or
(Planned unit /hr / Actual unit /hr)
1
Ch 4
EstimatedTender
Labour 40%
•Largest cost
Materials 40% component
General Conditions • Most volatile
& Indirect Costs 10%
• Most critical
Overhead 5% to control
Profit 5%
Total 100%
Actual Values
Labour 40% 45%

Materials 40%
General Conditions
A 12.5%
& Indirect Costs 10% overrun in the
Overhead 5% labour
component
Profit 5%
Total 100% 105%
2
Ch 4
Quantifying Productivity
Losses
Common Causes of Labour

Overruns
Internal:
• Poor planning & management of work
• Rework & errors
• Bad estimate
• Lack of training
• Morale problems
• Staff turnover
• Material & equipment availability
3
Ch 4
Common Causes of Labour

Overruns
External:
• Overtime
• Changes
• Crowding
• Trade Stacking
• Weather
• Site Access
Why Measure Productivity?

• You can’t correct a problem if you don’t know it exists
• By the time the job is over, you’ve lost the money
• You will have current information to manage and control
your project
• You should correct losses arising from internal problems
• You may be able to recover losses arising from external
causes
4
Ch 4
Sample Charts of Labor

Production Factors
Effect of Crowding on Labor Productivity
20%
% Labour Loss to Inefficiency
15%
10%
5%
0%
0% 5% 10% 15% 20% 25% 30% 35%
% Crowding
5
Ch 4
Effect of Overtime on Labor Productivity

Productivity Rate - 2hr over time load
100% 100%
95%
93%
91%
89%
87%
85%
83%
80% 81%
Efficiency
80% 79% 79% 78%78%
60%
40%
0 2 4 6 8 10 12 14
Days
Effect of Change Orders on Productivity
6
Ch 4
Factors Affecting Productivity

Factors Minor Average Severe
1. Stacking of Trades 10% 20% 30%

2. Morale and Attitude 5% 15% 30%
3. Reassignment of Manpower 5% 10% 15%
4. Crew Size Inefficiency 10% 20% 30%
5. Concurrent Operations 5% 15% 25%
6. Dilution of Supervision 10% 15% 25%
7. Learning Curve 5% 15% 30%
8. Errors and Omissions 1% 3% 6%
Factors Affecting Productivity

Factors Minor Average Severe
9. Beneficial Occupancy 15% 25% 40%
10. Joint Occupancy 5% 12% 20%
11. Site Access 5% 12% 30%
12. Logistics 10% 25% 50%
13. Fatigue 8% 10% 12%
14. Ripple 10% 15% 20%
15. Overtime 10% 15% 20%
16 Season and Weather Change 10% 20% 30%
7
Ch 4
Difference Between
Labour Productivity
and
Labour Efficiency
Labour Productivity
IS A MEASURE OF THE ACTUAL

LABOR PRODUCTION RATE ONLY
8
Ch 4
Labour Efficiency
IS A MEASURE OF OTHER FACTORS ,

THAT AFFECT THE NET PRODUCTION
OF A WORKER
Represented in %
Labour %Efficiency
Is a Measure of all of the

Worker’s:
1-Productivity
2-Availability
3-Reliability
4-Comprehensibility
9
Ch 4
Labour Efficiency Table

Alloc. Dur Unit Act. Dur % Eff
Measures how well the

Productivity
production activity is performed
How much the worker is present

Availability
and available to do his work
How much time he is waste- free

Reliability
in his working period
How much time required to

Comprehensibility
respond for a given new task
Net Efficiency
Labour Efficiency Example

Alloc. Dur Unit Act. Dur % Eff
Measures how well the
Productivity 1 hr 1.1 91%
production activity is performed
How much the worker is present

Availability 14 day 13 93%
and available to do his work
How much time he is waste- free

Reliability 8 hr 7 88%
in his working period
How much time required to

Comprehensibility 1 hr 1.15 87%
respond for a given new task
Net Efficiency 64.2%
10
Ch 4
Labour Productivity
1 2 3
Defining Productivity Improving

Productivity Factors Productivity
Improving Productivity
In today's tough business environment there are

fewer options for making a satisfactory profit.
One of the remaining options is to improve labor
productivity.
11
Ch 4
The first way to increase productivity should be to uplift the

skills of supervisors and managers so that they can
enhance the performance of their teams. This is the most
cost-effective way of increasing workplace productivity.
Few suggestions for managers to improve productivity:
1. Set a fair and reasonable level of expectations regarding the

performance of the employees.
2. Ensure that every member of staff has a clear understanding of how
their job performance is measured.
3. Set up a system of communication so the employees can be given
information about progress on their jobs.
4. At every opportunity use positive attitude with each employee.
5. Celebrate successes and milestones.
6. Catch people doing it right.
7. Coach people doing it wrong.
12
Ch 4
If people don't know specifically what is expected of them in
measurable terms, it is unlikely that they will perform to the
level required.
This can be described as on-the-job coaching where the

manager coaches the person doing the job so that they
have the tools, the knowledge and skill, to successfully do
the job.
The Secret Strategy of Getting Maximum Productivity
This secret strategy is far more effective than any system,

tool or method of motivation for individual productivity
improvement.
Just think of it this way; Nothing in this world can raise your
productivity more than when
you really enjoy every aspect of your work.
13

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Measuring Productivity in the

What is Labour Productivity?

Productivity = Output / Input

(Planned hours / Worked hours)

Labour 40% 45%

Common Causes of Labour

Common Causes of Labour

Why Measure Productivity?

Sample Charts of Labor

Effect of Crowding on Labor Productivity

Effect of Overtime on Labor Productivity

80% 79% 79% 78%78%

Effect of Change Orders on Productivity

Factors Affecting Productivity

1. Stacking of Trades 10% 20% 30%

Factors Affecting Productivity

IS A MEASURE OF THE ACTUAL

IS A MEASURE OF OTHER FACTORS ,

Is a Measure of all of the

Labour Efficiency Table

Measures how well the

How much the worker is present

How much time he is waste- free

How much time required to

Labour Efficiency Example

How much the worker is present

How much time he is waste- free

How much time required to

Net Efficiency 64.2%

Defining Productivity Improving

In today's tough business environment there are

The first way to increase productivity should be to uplift the

1. Set a fair and reasonable level of expectations regarding the

This can be described as on-the-job coaching where the

The Secret Strategy of Getting Maximum Productivity

This secret strategy is far more effective than any system,

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