2. ABSTRACT
The current global economic situation and the effect of the negative consequences of inefficiencies
in major construction projects in India have made construction productivity improvement more
and more important. In the construction industry, onsite labor is one of the most variable and
important factor which affect project profits. Due to the variable nature of construction labor and
its correlation with profits, construction managers require a comprehensive understanding of the
activities of workers onsite.
Productivity improvements achieve higher cost savings with minimal investment. Due to the fact
that profit margins are small on construction projects, cost savings associated with productivity
are crucial to becoming a successful contractor. Dearth of qualified workers and excess
availability of unskilled labor have motivated to analyze labor productivity specifically. This
report describes about the learnings of productivity, work study and work measurement methods.
3. Introduction
Need of productivity
On a construction site, productivity can be classified as labor productivity, material
productivity, equipment productivity, etc. Traditionally productivity is defined as the ratio of
output/input and is thus a measure of efficiency. For example, labor productivity gives us the
relative efficiency and effectiveness of workers at a construction site doing their specified work.
Construction productivity has been decreasing in the last decade. In the view of the construction
industry, productivity improvement is particularly important because inadequate change in
productivity will mean sharper changes in overall construction costs. Construction work is
generally complex and inter-dependent such as that in major projects; and is hard to quantify
when assessing and measuring productivity. This technical difficulty arises due to the fact that
the sector is influenced by many external factors such as economic situations (recession
periods), political changes (government commitments or effects of legislations) or innovations
in the work methods. Therefore, productivity measures must be treated with care, and to
improve productivity it is important to record relevant data on various inputs (resources,
equipment, labor, etc.) and output produced in the process. Productivity growth contributesto
growth in products, services, income & living standards.
GDP is both a measure of income and output, and since GDP per hour worked is a measure of
labor productivity, growth in productivity will raise the income per person. Productivity growth
is important to the organization because it means that it can meet its responsibilities to workers,
shareholders, and governments in form of taxes and regulation (National Research Council,
1979).
4. (i) Labor productivity
The simplest measure of labor productivity is output per worker. An increase in output per
worker can be observed either by requiring workers to produce more in the hours they work.
The second measure of labor productivity is output per hour worked. The advantage of this
measure of economic growth, competitiveness and living standards within an economy.
Labor productivity is one of the least studied areas within the construction industry.
Construction labor productivity has become a big problem in construction industry. In most
countries, labor cost comprises of 30% to 50% of the overall project’s cost, and thus is regarded a
true reflection of the economic success of the project.
Every project has some difficulty in construction like material, money, tools and local
contractor’s construction cost overruns. Looking at the current scenario of downfall in
construction labor productivity, it has become necessary to identify the factors that affect it.
(IJEAT, April 2013) [1]
.
Though labor productivity is measured and monitored on few construction projects across the
world, majority of the construction firms not initiated productivity measurement on their
construction sites, and hence very often productivity losses go unnoticed. It is important that
labor productivity is measured and productivity records are maintained and compared within
and across projects so as to maintain it and make improvements in it.
(ii) Rationale for measuring labor productivity
Some of the common reasons for decrease in productivity are:-
a) Lack of experience of owner and contractors
b) Ineffective organizational structures
c) Inappropriate methods used by the contractors
d) Improper management and deviation from responsibilities
e) Customization of owner specification requirements
f) Lack of familiarity with the climate, safety requirements, environmental constraints,
governmental regulations, construction practices
g) Lack of qualified craft workers and high labor cost
5. h) Negligence of adhering to the quality standards
i) Deviations from the original project plan
j) Ineffective supervision and leadership
The above-mentioned reasons are related either directly or indirectly to workers; hence we can
generalize it under labor productivity. Therefore, measuring labor productivity makes an
excellent weapon for starting an attack on the inefficiency in any construction organization.
Current Scenario
In developing countries like as India, where the economy is growing at 6-8% per annum, there
is a very significant and continual investment in infrastructure projects. However, as indicated
by numerous reports of organizations such as the World Bank, there are overruns in cost and
time in most projects; coupled with challenges of quality and poor engineering.
A recent Project Management Institute-KPMG report inferred that the systemic problem in such
a situation is the dearth of qualified and capable professionals across all facets of construction
engineering and management. The study of labor productivity in the construction industry is
gaining increasing attention as the industry faces multiple problems related to its workforce.
The construction industry in India is valued at two lakh forty thousand crore rupees and is
galloping ahead at a rate of 7 to 8% per annum. Over next ten years, the government has planned
in infrastructure roads, irrigation, and water supply, housing ports, energy, and
telecommunication etc., tohe tunes of twenty lakh crore rupees. Of this total amount nearly 40%
to 50% would be spent on construction activities. Today construction activity serves to catalyze
the economic growth of the country. A vibrant construction industry is essential in a developing
economy like India to meet the need of efficient infrastructure facilities. Moreover, investment
in construction has a positive domino effect of the supplier on industries thereby kick starting
economic development. With the demand for labor and increase in labor rates, there is a need
to have looked into entire construction activity and its impact on the final project cost.
6. Background
Introduction
This chapter includes the background of the productivity and its importance, and emphasizes
on the need for measurement of labor productivity. The concepts of work-study, method study,
and work measurement, different techniques for the work measurement that have been further
used for analysis, have also been explained.
Productivity
Productivity as a measure of efficiency, effectiveness and a means of improving the quality of
life is generic from achieving the highest output from limited resources. Increasing productivity
means increasing the efficiency of various resources of production or better results with lesser
efforts. Therefore, measurement of productivity to some extent indicates the performance and
efficiency of any construction organization.
The construction industry contributes to about ten per cent of the Gross Domestic Product
(GDP), with the figure likely to be higher in developing than developed countries. Although
most developing countries tend to adopt the manufacturing industry as the sector for
stimulating employment and creating job opportunities, they still place importance on the
construction industry for supporting economic development. Unlike several other industries,
the level of technology in the construction industry has remained relatively unchanged over
several decades. The lower pace of technological development in construction industry in
India, is a disadvantage when compared with other industries, where enhanced productivity is
achieved through the use of modern technology. As the construction industry is a diverse sector
of the national economy that involves a wide range of scarce resources, productivity is not only
concerned with many individual activities, but the industry as a whole.
7. Productivity measurement is a complex issue and there is no universal formula to measure it
under all conditions. Indeed, there still exist operational areas in industry where the methods
of measuring productivity have yet to be established. A proper productivity measuring system
must:
1. be simple and easily understood;
2. be usable at various levels of organizations; and
3. Possess a sound database structure and permit tracking over time.
(Ewe Chye LIM, March 1996)[2]
.
Importance of Measuring Labor Productivity
The simplest measure of labor productivity is output per worker. An increase in output per
worker can be observed either by requiring workers to produce more in the hours they work or
if they work longer hours. The second measure of labor productivity is output per hour worked.
The advantage of this method is that it takes into account variations of number of hours worked
per worker, rather than the numbers of employees, as the measure of labor input.
Variations in the construction labor productivity can naturally make a great impact on national
economy and productivity. Lack of safety, lack of skills, improper quality of materials,
inadequate wages and communication barriers mainly raise the psychological stress levels of
the workers. This affects the production efficiency of the workers to a large extent.
Construction labor productivity has only been gaining importance lately and is one of the
frequently researched topics in the construction field now. In most countries, labor cost
comprises 30 to 50% of the overall project’s cost, and thus is regarded as a true reflection of
the economic success of the operation. Horner et al. indicated that a 10% increase in
construction labor productivity would yield annual savings of about £1 Billion to the British
economy; a similar conclusion was echoed by Stoekel and Quirke (1992). Since construction
is a labor intensive industry, the significance of this effect not only justifies the concern over
its labor productivity, but it can also be argued that labor power is the only productive resource.
Also labor productivity is one of the least studied areas within the construction industry.
Productivity improvements achieve higher cost savings with minimal investment. Due to the
fact that profit margins are small on construction projects, cost savings associated with
productivity are crucial to becoming a successful contractor. (IJEAT, April 2013) [1]
.
8. Measurement of labor productivity provides us with sources of reference to benchmark
productivity of organizations. Measured productivity, in terms of statistics of the historical data
collected, is made available from any trade and professional associations. For example, the US
Department of Labor, US Bureau of Labor Statistics, Contractors Associations, independent
contractors, universities, and other organizations. Even though the lists of the labor factors are
different from different groups, they carry a similar range of impacts on the productivity and
most of them are very common to many lists. As stated above, measurement of productivity is
imperative to finally improve it. Hence, we must be able to measure the advantageous as well
as disadvantageous effect of changes adopted on the methods, efforts, and systems. The
measured values can then be compared either to those used to compile the estimate or to some
production standards that have been formulated.
Need for Labor Productivity Measurement
As construction is a labor-intensive industry, the significance of this effect not only justifies
the concern over its labor productivity, but it can also be argued that labor power is the only
productive resource, hence construction productivity is mainly dependent upon human effort
and performance. Labor productivity is a revealing indicator of several economic indicators as
it offers a dynamic measure of economic growth, competitiveness, and living standards within
an economy. Every project has some difficulty in construction like material, money, tools and
local contractor’s construction cost. Looking at the current scenario of a continuous downfall
of construction labor productivity, it is necessary to identify the factors that affect it. Though
labor productivity is measured and monitored on construction projects across the world,
majority of the Indian construction firms have not initiated productivity measurement on their
construction sites, and hence very often productivity losses go unnoticed. It is of paramount
importance that labor productivity is measured and productivity records are maintained and
compared within and across projects so as to maintain and improve it.
9. Work Study
Introduction to WorkStudy
As defined by the International Labor Office, Work Study is the systematic examination of the
methods of carrying on activities so as to improve the effective use of resources and to set up
standards of performance for the activities being carried out. Work study is a means of
improving the production efficiency (productivity) of the construction firm by elimination of
waste and unnecessary operations. It is the only accurate and systematic procedure oriented
technique to establish time standards. Method study and work measurement is part of work-
study. Work measurement is also called by the name ‘Time study’.
Work-study is made up of mainly two techniques:
Method Study - Method study is the systematic recording and critical examination of
ways of doing things in order to make improvements.
Work Measurement - Work measurement is the application of techniques designed to
establish the time for a qualified worker to carry out a task at a defined rate ofworking.
Method study and work measurement are closely linked. Method study is concerned with the
reduction of the work content of an operation, while work measurement is mostly concerned
with the investigation and of any ineffective time associated with it; and with the subsequent
establishment of time standards for the operation when carried out in the improved fashion, as
determined by method study.
Work-study can be classified as Method study, which has a role of simplifying the job and,
Work Measurement that includes determining how long it should take to carry the job out (refer
Figure 2.1) both when effectively and efficiently achieved result in high productivity.
Following are the advantages of work study:
1. It helps to achieve the smooth production flow with minimum interruptions.
2. It helps to reduce the cost of the product by eliminating waste and unnecessary operations.
3. Better worker-management relations.
4. Meets the delivery commitment.
10. 5. Reduction in rejections and scrap and higher utilization of resources of the organization.
6. Helps to achieve better working conditions.
7. Better workplace layout.
8. Improves upon the existing process or methods and helps in standardization and
simplification.
9. Helps to establish the standard time for an operation or job which has got application in
manpower planning, production planning.
Figure 2.1: Work Study
(Source: ILO, 1992)[3]
Method Study
According to British Standards Institution (BS 3138):“Method study is the systematic
recording and critical examination of existing and proposed ways of doing work as ameans
or developing and applying easier and more effective methods and reducingcost.” Basically
method study involves breakdown of work into its component elements and their systematic
analysis. In carrying out the method study, right attitude of mind is important. Method study
scope is improving work methods through process analysis, such as:
1. Construction operations and their sequence
2. Workmen
3. Materials, tools and gauges
4. Layout of physical facilities and work station design
5. Movement of men and material handling
6. Work environment.
11. Objectives of Method Study
Method study is essentially concerned with finding better ways of doing things. It adds value
and increases the efficiency by eliminating unnecessary work content, avoidable delays and
other forms of waste of time. The improvement in efficiency is achieved through:
1. Improved layout and design of workplace.
2. Improved and efficient work procedures.
3. Effective utilization of men, machines and materials.
4. Improved design or specification of the final product.
Procedure Involved in Method Study
1. Selection of the work to be studied.
2. Record the relevant facts about the work by direct observation.
3. Examination of the method of the performance.
4. Development of the most practical, economic and effective method.
5. Evaluate different alternatives to developing a new improved method comparing the cost-
effectiveness of the selected new method with the current method with the current method of
performance.
6. Define the method, as a result, in a clear manner and present it to those concerned i.e.,
management, supervisors and workers.
7. Install the new method as a standard practice and train the persons involved in applying it.
8. Maintain the new method and introduce control procedures to prevent a drifting back to the
previous method of work (ILO, 1992)[3]
.
Recording Techniques for Method Study
The recording techniques are designed to simplify and standardize the recording work. For this
purpose charts and diagrams are used. For the recording techniques of method study (refer
Figure 2.2.)
12. Fig. 2.2 Recording techniques for method study
(Source: Ralph M Barnes, 1968)[4]
Work Measurement
Work measurement is also called by the name ‘Time Study’. Work measurement is absolutely
essential for both the planning and control of operations.
Objectives of work measurement
The use of work measurement as a basis for incentives is only a small part of its overall
applications. The objectives of work measurement are to provide a sound basis for:
1. Comparing alternative methods.
2. Assessing the correct initial manning (manpower requirement planning).
3. Planning and control.
4. Realistic costing.
5. Financial incentive schemes.
6. Delivery date of goods.
7. Cost reduction and cost control.
8. Identifying substandard workers.
9. Training new employees.
13. Various techniques of work measurement
1. Time study (stop watch technique),
2. Synthesis,
3. Work sampling,
4. Predetermined motion and time study.
Methods used for measuring and analyzing labor productivity
Labor productivity measurement is a complex issue and there is no universal formula to
measure it under all conditions. Indeed, there still exist operational areas in industry where the
methods of measuring productivity have yet to be established. A proper labor productivity
measuring system must be simple to use and easily understood. Also it must be usable at
various levels of organization.
Considering the complexity of measurement issues and labor productivity measuring system
requirement, following methods can be used to measure and analyzing the laborproductivity:
1] Time study using elemental work breakdown structure
2] Work Sampling
3] Method study (with the help of flow process chart)
4] Field survey - Structured Interviews for foreman & craftsman
Time study using elemental work breakdown structure
Time study is a work measurement technique for recording the times of performing a specific
job or its elements carried out under certain decided conditions, and then analyzing the data so
as to obtain the time necessary for a worker to carry it out at a defined rate of performance. The
data for measuring productivity using time study can be obtained by means of equipment like
stop watch , motion picture camera, study boards , time studyforms.
14. The Stopwatch method
An electronic stop-watch performs exactly the same role as a mechanical one: the recording of
element durations. One of the main advantages is that it allows fly back timing to be performed
without any loss of accuracy. (With a mechanical watch the time taken for the hand to return
to zero is "lost". With an experienced practitioner, this time is minimal but with a trainee or
inexperienced observer, it can be significant and can jeopardize the accuracy of a time study.)
With an electronic watch the timing device is running continually and it is only the display that
is updated as the "fly back" button is pressed to reset the display to zero. At the end of the time
study with most watches it is possible to read off the total elapsed time. Electronic watches can
often be used in a number of calibration modes they can be set to record in fractions of seconds,
minutes or hours. Figure 2.3 shows typical electronic stop watch having a data recorded in the
lap format.
Fig 2.3 Electronic Stop
Watch (Source: ILO, 1992)[3]
Steps involved in time study
Collect all the information available about the job, the worker and the surrounding
conditions, which is likely to affect the carrying out of the work.
Carefully observe the work process and apply work break down method to divide the
work into elements.
Determining the sample size with the help of some preliminary readings.
Measure with a timing device like a stop-watch and recording the time taken by the
worker to perform each element of the work.
15. At the same time, observe the effective speed of working of the worker relative to the
observer's concept of the rate corresponding to standard rating.
Extending the observed times to 'basic times'.
Identify and add some allowances to be made for basic time for the operation.
Determining the standard time for the operation using above process.
This statistical method gives different sample sizes for different element depending upon
the duration of each element. Thus based on total number of minutes per cycle, work
study: ILO defines the average sample size which is required to be taken during data
collection phase. (refer: Table 2.1)
Minutes
per cycle
To 0.1 To
0.2
5
To
0.5
To
0.7
5
To
1
To
2
To
5
To
10
To
20
To
40
Over
40
Number of
cycles
recommended
200 100 60 40 30 20 15 10 8 5 3
Table 2.1-Number of recommended cycles for time study
(Source: ILO, 1992)[3]
16. Advantages of Work Sampling over Time Studies
Compared to time studies which require continuous observation, work sampling costs less
and requires less time in terms of labor hours to complete
Time studies can only monitor one or two operators or machines at one time; work
sampling has the added benefit of monitoring several subjects at one time.
When work sampling studies are completed across several days or weeks, short term
abnormalities are avoided.
The work sampling method is more representative to the actual conditions than the direct
time study.
Due to the simplicity of work sampling, training observers is relatively short.
Work sampling is less tedious than the constant observation that is required in the direct
time study.
Work sampling is less interruptive and uncomfortable for the operators than direct time
study, because in work sampling the operator is viewed once, and then the observer moves
on.
Work sampling is suitable to activities with lots of tasks at a low repetition rate. Work
such as this is difficult to measure using direct time studies.
17. References
[1] Mistry Soham, Bhatt Rajiv (April 2013), “Critical Factors Affecting Labor Productivity in
Construction Projects: Case Study of South Gujarat Region of India”, International Journal of
Engineering and Advanced Technology (IJEAT) ISSN: 2249 – 8958, Volume-2, Issue-4, p.g.1-
38
[2] Ewe Chye Lim, (March 1996), Southborough University of Technology, Southborough.
[3] International Labor Organization (ILO), (1994), Introduction to work study, fourth edition,
Universal Publishing Corporation, Geneva.
[4] Ralph M. Barnes, (1968), Motion & Time study: Design and Measurement of work, Wiley
International Editions, New York.
[5] Dr. O. P. Khanna, (2006), Work study, Dhanpat Rai Publication, New Delhi
[6] Thompson, S. K. (1987), “Sample size for estimating multinomial proportions”, Journal of
Construction Engineering and Management, vol. 112(2), p.g.245-270.
[7] Thomas, H. R., Guevara, J. M., & Gustenhoven, C. T. (1984), “Improving productivity
estimates by work sampling”, Journal of Construction Engineering and Management, vol.110
(2), 178-188.
