Benchmarking: An International Journal

Key performance indicators for measuring construction success

Albert P.C. Chan Ada P.L. Chan

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Albert P.C. Chan Ada P.L. Chan, (2004),"Key performance indicators for measuring construction success",
Benchmarking: An International Journal, Vol. 11 Iss 2 pp. 203 - 221
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Key performance indicators

for measuring construction
success

Key performance
indicators

203

Albert P.C. Chan

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School of Construction Management and Property, Queensland

University of Technology, Brisbane, Australia

Ada P.L. Chan

Department of Building and Real Estate, Hong Kong Polytechnic
University, Hung Hom, Kowloon, Hong Kong
Keywords Project management, Performance measurement (quality), Construction industry
Abstract The construction industry is dynamic in nature. The concept of project success has
remained ambiguously defined in the construction industry. Project success is almost the ultimate
goal for every project. However, it means different things to different people. While some writers
consider time, cost and quality as predominant criteria, others suggest that success is something
more complex. The aim of this paper is to develop a framework for measuring success of
construction projects. In this paper, a set of key performance indicators (KPIs), measured both
objectively and subjectively are developed through a comprehensive literature review. The validity
of the proposed KPIs is also tested by three case studies. Then, the limitations of the suggested
KPIs are discussed. With the development of KPIs, a benchmark for measuring the performance of
a construction project can be set. It also provides significant insights into developing a general and
comprehensive base for further research.

Introduction
Most industries are dynamic in nature and the construction industry is no
exception. Its environment has become more dynamic due to the increasing
uncertainties in technology, budgets, and development processes. A
building project is completed as a result of a combination of many
events and interactions, planned or unplanned, over the life of a facility,
with changing participants and processes in a constantly changing
environment (Sanvido et al., 1992). Temporary, fragment and short-term are
also significant characteristics inherent in the construction industry. Such
characteristics greatly affect the effectiveness of project team, especially the
project managers. The concept of project success is developed to set criteria
and standards by which project managers can complete projects with the
most favourable outcomes. However, this concept has remained
ambiguously defined among construction professionals. Many project
managers still attend to this topic in an intuitive and ad hoc fashion as
The authors gratefully acknowledge the Hong Kong Polytechnic University for providing funds
to support this research effort.

Benchmarking: An International
Journal
Vol. 11 No. 2, 2004
pp. 203-221
q Emerald Group Publishing Limited
1463-5771
DOI 10.1108/14635770410532624

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204

they attempt to manage and allocate resources across various project areas
(Freeman and Beale, 1992).
Although a number of researchers had explored this concept, no general
agreement has been achieved. Project success means different things to
different people. The criteria of project success are constantly enriched.
Therefore, a systematic critique of the existing literature is needed to develop
framework for measuring construction success both quantitatively and
qualitatively.
This paper is based on the earlier work by Chan (1996, 1997) and Chan et al.
(2002) and it is aimed to develop a set of key performance indicators (KPIs) for
measuring construction success. The definitions and development of project
success will first be discussed, followed by a critical review of the literature over
the last decade. Based on earlier research, a set of KPIs is developed to measure
project performance. To demonstrate the application of proposed KPIs, case
studies are assessed. Limitations in using the proposed KPIs have been
identified and discussed. Finally, the significance of this paper is presented.
Criteria of project success
Munns and Bjeirmi (1996) consider a project as the achievement of a specified
objective, which involves a series of activities and tasks that consume
resources. From the Oxford Dictionary (1990), criterion is defined as a standard
of judgement or principle by which something is measured for value. Lim and
Mohamed (1999) advocate a criterion as a principle or standard by which
anything is or can be judged. The Oxford Dictionary further defines success as
a favourable outcome or the gaining of fame or prosperity. When combining
these terms together, criteria of project success can be defined as the set of
principles or standards by which favourable outcomes can be completed within a
set specification.
Project success means different things to different people. Each industry,
project team or individual has its own definition of success. Pariff and Sanvido
(1993) consider success as an intangible perceptive feeling, which varies with
different management expectations, among persons, and with the phases of
project. Owners, designers, consultants, contractors, as well as sub-contractors
have their own project objectives and criteria for measuring success. For
example, architects often consider aesthetics rather than building cost as the
main criterion for success. However, client may value other dimensions more.
Moreover, even the same persons perception on success can change from
project to project. Definitions on project success are dependent on project type,
size and sophistication, project participants and experience of owners, etc.
Changing measures of project performance over the last 10 years
Over the last 10 years, a number of researchers have shown intense interests in
this topic. Chan (1996, 1997) undertook a comprehensive review of

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measurement of project success in the late 1980s and the early 1990s. More Key performance
literature has emerged since Chans review. This paper attempts to bridge the
indicators
gap by providing a critical review of project success in the last decade.
In the early 1990s, project success was considered to be tied to performance
measures, which in turn were tied to project objectives. At the project level,
success was measured by the project duration, monetary cost and project
205
performance (Navarre and Schaan, 1990). Time, cost and quality are the basic
criteria to project success, and they are identified and discussed in almost every
article on project success, such as that of Belassi and Tukel (1996), Hatush and
Skitmore (1997) and Walker (1995, 1996). Atkinson (1999) called these three
criteria the iron triangle. He further suggested that while other definitions on
project management have been developed, the iron triangle is always included
in the alternative definitions.
In addition to these basic criteria, Pinto and Pinto (1991) advocated that
measures for project success should also include project psychosocial outcomes
which refer to the satisfaction of interpersonal relations with project team
members. Subjective measures such as participants satisfaction level are
known as soft measurs. The inclusion of satisfaction as a success measure is
suggested by Wuellner (1990). Pocock et al. (1996) further suggested to include
the absence of legal claims as an indicator of project success. This then calls for
including safety as a success indicator as well, since it is reasonable to expect
that if accidents occur, both contractors and clients may be subject to legal
claims, as well as financial loss and contract delay in the construction project.
Kometa et al. (1995) used a comprehensive approach to assess project success.
Their criteria include: safety, economy (construction cost),
running/maintenance cost, time and flexiblity to users. Songer and Molenaar
(1997) considered a project as successful if it is completed on budget, on
schedule, conforms to users expectations, meets specifications, attains quality
workmanship and minimises construction aggravation. Kumaraswamy and
Thorpe (1996) included a variety of criteria in their study of project evaluation.
These include meeting budget, schedule, quality of workmanship, client and
project managers satisfaction, transfer of technology, friendliness of
environment, health and safety.
Shenhar et al. (1997) proposed that project success is divided into four
dimensions. As shown in Figure 1, these four dimensions are time-dependent.
The first dimension is the period during project execution and right after
project completion. The second dimension can be assessed shortly afterwards,
when the project has been delivered to the customer. The third dimension can
be assessed after a significant level of sales has been achieved (1-2 years).
Finally the fourth dimension can only be assessed 3-5 years after project
completion.
Atkinson (1999) similarly divided project success into three stages: the first
stage is the delivery stage: the process: doing it right; the second is post

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Figure 1.
The four dimensions of
project success

delivery stage: the system: getting it right and the last stage is the post
delivery stage: the benefits: getting them right. Figure 2 is used to show
Atkinsons model of measuring project success.
Lim and Mohamed (1999) believed that project success should be viewed
from different perspectives of the individual owner, developer, contractor, user,
and the general public and so on. The authors proposed to evaluate project

Key performance
indicators

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207

Figure 2.
Atkinsons model of
measuring project
success

success from both the macro and micro viewpoints. Figure 3 shows two
viewpoints of project success.
Sadeh et al. (2000) divided project success into four dimensions. The first
dimension is meeting design goals, which applies to contract that is signed by
the customer. The second dimension is the benefit to the end user, which refers
to the benefit to the customers from the end products. The third dimension is
benefit to the developing organization, which refers to the benefit gained by the
developing organization as a result of executing the project. The last dimension
is the benefit to the technological infrastructure of the country and of firms
involved in the development process. The combination of all these dimensions
gives the overall assessment of project success. Table I shows the success
dimensions and measures.
Over the last decade, researchers have proposed different criteria for
measuring project success. Figure 4 presents a consolidated framework for
measuring success of construction projects.

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208

Figure 3.
Micro and macro
viewpoints of project
success

Success dimension
Meeting design goals

Benefit to the end user

Benefit to the developing organization

Benefit to the defence and national infrastructure

Table I.
Success dimension and
measures (Sadeh et al.,
2000)

Overall success

Success measures
Functional specifications
Technical specifications
Schedule goals
Budget goals
Meeting acquisition goals
Answering the operational need
Product entered service
Reached the end user on time
Product has a substantial time for use
Meaningful improvement of user
operational level
User is satisfied with product
Had relatively high profit
Opened a new market
Created a new product line
Developed a new technological capability
Increased positive reputation
Contributed to critical subjects
Maintained a flow of updated generations
Decreased dependence on outside sources
Contributed to other projects
A combined measure for project success

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209

Figure 4.
Consolidated framework
for measuring project
success

KPIs
The purpose of the KPIs is to enable measurement of project and organisational
performance throughout the construction industry (The KPI Working Group,
2000). Collin (2002) advocates that the process of developing KPIs involved the
consideration of the following factors.
.
KPIs are general indicators of performance that focus on critical aspects
of outputs or outcomes.
.
Only a limited, manageable number of KPIs is maintainable for regular
use. Having too many (and too complex) KPIs can be time- and
resource-consuming.
.
The systematic use of KPIs is essential as the value of KPIs is
almost completely derived from their consistent use over a number of
projects.
.
Data collection must be made as simple as possible.
.
A large sample size is required to reduce the impact of project specific
variables. Therefore, KPIs should be designed to use on every building
project.
.
For performance measurement to be effective, the measures or indicators
must be accepted, understood and owned across the organisation.

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210

Figure 5.
KPIs for project success

KPIs will need to evolve and it is likely that a set of KPIs will be subject to
change and refinement.
Graphic displays of KPIs need to be simple in design, easy to update and
accessible.

With these factors in mind, a set of KPIs including objective indicators and
subjective ones is developed to measure the performance of a construction
project. With reference made to Chans (1996, 1997) and Naoums (1994) earlier
research, each KPI will be discussed in detail and practical approaches to
measure these KPIs will be introduced. The calculation methods of the
proposed KPIs are divided into two groups. The first group uses mathematical
formulae to calculate the respective values. Formulae will be presented after the
detail explanations of each KPI, such as time, cost, value, safety and
environmental performance. The other group uses subjective opinions and
personal judgement of the stakeholders. This group includes the quality,
functionality of building and the satisfaction level of various stakeholders.
A seven-point scale [1] scoring system is adopted to measure these KPIs. As
discussed in the following paragraphs, there are nine KPI categories in total,
each may include one or more measuring methods. Figure 5 shows a graphical
representation of the KPIs.

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Time
Key performance
Time refers to the duration for completing the project. It is scheduled to
indicators
enable the building to be used by a date determined by the clients future plans
(Hatush and Skitmore, 1997). Related to time is the concept of effectiveness.
Alarcon and Ashley (1996) defined effectiveness as a measure of how well the
project was implemented or the degree to which targets of time and cost were
211
met from the start-up phase to full production. They proposed to include time
as a criterion for project success. According to Chan (1997) and Naoum (1994),
there are three formulae under the time category, namely construction time,
speed of construction and time variation.
Construction time is the absolute time that is calculated as the number of
days/weeks from start on site to practical completion of the project.
Construction time Practical completion date
2 Project commencement date
Speed of construction is the relative time, which is defined by gross floor area
divided by the construction time.
Speed of construction

Gross floor area m2

Construction time days=weeks

Time variation is measured by the percentage of increase or decrease in the

estimated project in days/weeks, discounting the effect of extension of time
(EOT) granted by the client.
Time variation

Construction time 2 Revised contract period

Revised contract period
100 per cent

where Revised contract period Original contract period EOT

Cost
Cost is another important measure. Cost is defined as the degree to which the
general conditions promote the completion of a project within the estimated
budget (Bubashait and Almohawis, 1994). Cost is not only confined to the
tender sum, it is the overall cost that a project incurs from inception to
completion, which includes any costs arise from variations, modification
during construction period and the cost arising from the legal claims, such as
litigation and arbitration. Cost can be measured in terms of unit cost,
percentage of net variation over final cost.

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Unit cost is a measure of relative cost and is defined by the final contract
sum divided by the gross floor area.
Unit cost

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212

Final contract sum

Gross floor area m2

Percentage net variation over final cost (per cent NETVAR) is the ratio of net
variations to final contract sum expressed in percentage term. It gives an
indication of cost overrun or underrun. Yeongs (1994) approach in measuring
this term is used:
Net value of variations
100 per cent
Final contract sum
where Net value of variations Final contract sum 2 Base
Per cent NETVAR

Base Original contract sum Final rise and fall

2 Contingency allowance
Value and profit
Alarcon and Ashley (1996) defined the measure of value as evaluating the
satisfaction of owners needs in a global sense. It includes the realization for the
owner of quantity produced, operational and maintenance costs, and flexibility.
It can be considered as business benefit derived from the completed project.
Most projects are profit-oriented. The clients and developers try to maximise
profit. Therefore, value and profit is an important success criterion, especially
in the handover stage where value and profit materialise. The most common
measure of financial achievement is net present value (NPV).
NPV

n
X
NCFt
1 rt
t0

where NPV is net present value, NCF is net cash flow, and r is the discount rate.
Health and safety
Health and safety are defined as the degrees to which the general conditions
promote the completion of a project without major accidents or injuries
(Bubshait and Almohawis, 1994). The issue of safety has been raised for a long
time (Kometa et al., 1995; Parfitt and Sanvido, 1993; Sanvido et al., 1992) and
cannot be overlooked. The measurement of safety is mainly focused on the
construction period as most accidents occur during this stage. The
methodology adopted by the Hong Kong Labour Department for calculating
the annual accident rate on construction sites forms the base for calculating the

accident rate in a specific project (Construction Industry Review Key performance

Committee, 2001).
indicators
Accident rate Total no: of reportable construction site accidents=
Total no: of workers employed or man-hours worked

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on a specific project 1;000

Environmental performance
Construction industry has been regarded as a major contributor to
environmental impacts. Construction projects affect the environment in
numerous ways across their life cycle (Shen et al., 2000). For example, 14
million tonnages of waste have been put into landfill in Australia each year, of
which 44 per cent came from the construction/demolition industry (Songer and
Molenaar, 1997). About 62-86 per cent domestic productions of non-metallic
minerals, such as glass, cement, clay, lime and so on in developing regions are
consumed by the construction industry (UNIDO, 1985). The Technical
Committee (TC) formed in January 1993 by the International Organization for
Standardization (ISO) developed a series of standards known as ISO14000
series to provide guidance on environmental management. ISO14000 provides
a benchmark of a proper environmental management practice. Environmental
issues are a global concern. The UN and some economics blocs such as the
European Community and ASEAN have introduced environmental protection
model laws or directives to member countries (Wong and Chan, 2000).
Environmental Impact Assessment (EIA) Ordinance is now a widely accepted
statutory framework for prediction and assessment of potentially adverse
environmental impacts from development projects (Environmental Protection
Department, 2000). The enforcement of EIA Ordinance provides a good
measure for environmental aspects. However, the EIA only covers those
projects that are to be built with Buffer Zone 1 or 2 of Deep Bay, or in other
ecologically sensitive areas, such as sites of special scientific interest, or in
country parks, as well as those residential developments proposing more than
2,000 flats that are located in unsewered areas (Wong and Chan, 2000).
Compared to the EIA, the Pollution Control Ordinances, including noise
pollution, water pollution, air pollution, asbestos control and waste disposal,
have significant impact on construction and property development (Wong and
Chan, 2000). To conclude, the application of ISO14000, the EIA score and the
total number of complaints received during the construction can be used as an
indicator to reflect the environmental performance of a given project.
Quality
Quality is another criterion that is repeatedly cited by previous researchers.
However, the assessment of quality is rather subjective. In the construction

213

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214

industry, quality is defined as the totality of features required by a product or

services to satisfy a given need; fitness for purpose (Parfitt and Sanvido, 1993).
Nowadays, quality is the guarantee of the products that convinces the
customers or the end-users to purchase or use. The meeting of specification is
proposed by Songer et al. (1996) and Wateridge (1995) as one way to measure
quality. They defined specification as workmanship guidelines provided to
contractors by clients or clients representatives at the commencement of
project execution. The measure of technical specification is to the extent that
the technical requirements specified can be achieved. Actually, technical
specification is provided to ensure that buildings are built in good standard and
in proper procedure. Freeman and Beale (1992) extended the definition of
technical performance to scope and quality. Hence meeting technical
specification is grouped under the quality category. The measurement of
quality will be measured subjectively using the seven-point scale mentioned
earlier.
Functionality
Kometa et al. (1995) opine that there would be no point in undertaking a project
if it does not fulfil its intended function at the end of the day. The importance of
functionality is highlighted. This indicator correlates with expectations of
project participant and can best be measured by the degree of conformance to
all technical performance specifications (Chan et al., 2002). Quality, technical
performance, and functionality are closely related and are considered important
to the owner, designer, and contractor. A similar seven-point scale will be used
to measure functionality.
User expectation and satisfaction
Users are those who actually work or live in the final products. They are the
ones who spend most of time in the constructed facilities. It is essential that the
completed projects meet the users expectation and satisfaction. Liu and
Walker (1998) consider satisfaction as an attribute of success. Torbica and
Stroh (2001) believe that if end-users are satisfied, the project can be considered
being successfully completed in the long run. This measure is placed in the
second stage (maintenance period), as the users will normally be involved after
the project is completed. Again, a seven-point scale will be used to measure this
criterion.
Participants satisfaction
Participants satisfaction has been proposed as an important measure in the
last decade (Cheung et al., 2000; Parfitt and Sanvido, 1993; Sanvido et al., 1992).
Key participants in a typical construction project include: client, design team
leader and construction team leader. Their level of satisfaction can be taken as
an indicator of project success and is measured by the seven-point scale
discussed above.

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Case studies application of KPIs

Key performance
A set of KPIs is developed in the previous section. In order to demonstrate the
indicators
application of KPIs in the construction industry, the authors have examined
three case studies. Details to be analysed in each case study are its performance
on time, cost, quality, accident rates, environmental friendliness, overall
satisfaction level and functionality. Table II shows the summary of the
215
background information and the results of different KPIs of these cases. The
details and the explanations of each case will be discussed in the following
paragraphs.
Case 1 design and build procurement, large and complex hospital project
It is a 618-bed acute general hospital which was built in part of a 67,500 m2 site.
This construction project comprised 65,000 m2 gross floor area of which a
building complex of eight blocks, each block consisting of two to seven levels is
included. There are altogether 340 car parking lots, with associated access
roads, site work and landscaping. The total estimated cost of the project was
approximately HK$1.3 billion at March 1993 prices. This included design,
construction, supervision, commissioning, project management, furniture and
Case 1
Background
Nature of project
Type of project
Procurement method
GFA
Original contract sum
Final contract sum
Original contract period
Project commencement date
Practical completion date
Total agreed E.O.T.
No. of accidents arose during
the construction period
KPIs result
Construction time
Speed of construction
Time variation
Unit cost
Value and profit
Health and safety
Environmental performance
Quality
Functionality
Stakeholders satisfaction
Overall project performance

Case 2

Case 3

New work
Acute hospital
Enhanced design
and build
65,000 m2
HK$960 million
HK$990 million
910 days
9 September 1994
31 May 1997
87 days

New work
Acute hospital
Enhanced design
and build
65,000 m2
HK$1,160 million
HK$1,180 million
1,100 days
12 April 1996
16 April 1999
0 day

Extension
Non-acute hospital
Traditional
30,000 m2
HK$407 million
HK$401 million
660 days
March 1995
July 1997
180 days

77

20

Nil

997 days
65 m2/day
0 per cent
0.02 million/m2
N/A
77 accidents
ISO 14000 Certified
Satisfied
Satisfied
Satisfied
Successful

1,100 days
59 m2/day
0 per cent
0.02 million/m2
N/A
20 accidents
No information
Satisfied
Very satisfied
Satisfied
Successful

840 days
36 m2/day
0 per cent
0.01 million/m2
N/A
No information
No information
Satisfied
Satisfied
Satisfied
Very successful

Table II.
Summary of the case
studies

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equipment. The project was procured in the form of design-and-build delivery

method.
The level of success of this project can be measured according to the
proposed criteria. The construction time of this project is counted according to
the total number of days during the period from 9 September 1994 to 31 May
1997, so there are totally 997 days. The speed of construction is calculated as
the construction time spent on each unit of GFA built, therefore the speed is
about 65 m2 per day. The revised contract period of this project is 997 days,
which is the same as the construction time, so the time variation is 0 per cent.
The unit cost is calculated on the cost spent on each unit of GFA built, so it is
about 0.02 million per m2. As there is no information on the contingency
allowance, the percentage net variation over final cost cannot be made. There
were a total of 77 reported accident cases in this project and all were minor site
accidents mainly due to the recklessness of the workers. However, the accident
rate for this project cannot be calculated because of the lack of information on
the total number of workers employed or man-hours spent for this project.
Since it is a public project and is not aimed at creating profit, the category of
value and profit is not applicable in this case. The satisfaction of the
environmental friendliness of this project is ascertained because the contractor
has been certified by ISO14000 in this project. For the subjective measurement,
a questionnaire was designed and sent to project participants to seek their
personal judgement according to the seven-point scale. The average score of
the performance on the quality, satisfaction and functionality is 6, which
reveals that the stakeholders are satisfied with the project performance. In
conclusion, it is a successful project.
Case 2 design and build procurement, large and complex hospital project
This hospital was built on a 3.7 ha site which comprises three ten-storey high
triangular ward blocks which are set behind a six-storey clinic block and a
five-storey rectangular diagnostic and treatment block. It provides a total of
458 beds, with facilities such as surgery, orthopedics, obstetrics, gynaecology,
paediatrics, intensive/coronary care and special baby care. It also provides
ambulatory care services, 24-h accident and emergency (A and E) service and
out-patient and community services. The project was procured in enhanced
design and build form.
Applying the same measurement principle as in the first case, the
construction time of this project is counted according to the total number of
days during the period from 13 April 1996 to 16 April 1999, so there are totally
1,100 days. The speed of construction is about 59 m2 per day. The project was
completed within the original contract period, so there is no time variation. The
unit cost for this project is 0.02 million per m2. Again it is a non-profit making
project, the category of value and profit is not applicable in this case. There
were a total of 20 accident cases in this project. For the subjective

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measurement, the scores of the performance on the quality, functionality and Key performance
satisfaction are 6, 7, and 6, respectively, which reveal that the stakeholders are
indicators
satisfied with the project performance. In conclusion, the overall project
performance is considered to be successful.
Case 3 traditional procurement, extension hospital project
The extension project involved the demolition of the existing buildings
and construction of a low-rise non-acute hospital accommodating 316
in-patients, a low-rise Annex building containing a school of nursing, trainee
nurses accommodation, minor staff accommodation and a staff kitchen/canteen.
The construction time of this project is 840 days which counted from March
1995 to July 1997. The speed of construction is about 35.7 m2 per day. As 180
days were granted for E.O.T., the revised contract period of this project is 840
days, which is the same as the construction time, so the time variation is 0 per
cent. The unit cost for this project is 0.01 million per m2. As the final contract
sum is less than the original contract sum, therefore there is a 1.5 per cent of
cost underrun. The category of value and profit is not applicable in this case
again. The accident rate and the environmental friendliness level of this project
cannot be obtained as there is no information available. For the subjective
measurement, the scores of the performance on the quality, functionality and
satisfaction are all 6 which reveal that the stakeholders are satisfied with the
project performance. In conclusion, the overall project performance is
considered to be very successful with cost underrun.
Discussion on the KPIs result
With the help of the case studies, we can find that each project has unique
results. The results of each project as shown in Table II vary due to the
difference in project scope, project complexity, procurement methods, etc.
When comparing the time performance of these cases, the speed of
construction of case 3 is far behind than that of case 1 and 2. The fast-track
result can be attributed to the factor of procurement method adopted. Cases 1
and 2 used the enhanced design and build method and case 3 used traditional
procurement method. Lam (2000) states that the traditional approach has been
found to be failing to satisfy clients needs as hospital projects are becoming
larger and more sophisticated, and coupled with greater difficulty in the
management of complex design and construction. Therefore, the design and
build gives a fresh approach for project delivery, it provides the necessary true
multi-disciplinary approach and integration because it forms a
designer-contractor team at an early stage in the process. By overlapping the
design and construction, the total project duration is reduced.
As for cost performance, the unit cost of case 3 is smaller than that of cases 1
and 2 by 50 per cent. The nature and type of projects are the main sources of
difference. Cases 1 and 2 are both acute hospitals, which comprise a large
diversity of medical departments and naturally require more advanced and

217

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218

costly equipment. For case 3, it is a low-rise non-acute hospital which has less
GFA and provides less number of in-patient beds, therefore, the construction
cost of case 3 is substantially lower.
Other qualitative KPIs provide an indication on how well the key
participants perceived on the performance of the project. It can be seen that in
general the participants were satisfied with the project performance in terms of
quality, functionality, and stakeholders satisfaction. The last KPI included in
this study, i.e. the overall project performance, enables the participants to
provide a summative assessment on the performance of the project in which
they were involved.
Limitations on the application of KPIs
The proposed KPIs are largely developed from a theoretical ground. When
applying the proposed KPIs to the case studies, some practical difficulties were
encountered. First, certain project information, especially those related to
monetary values, are sensitive and confidential and so the stakeholders may
not be willing to disclose for analysis. The second limitation relates to the
measurement of health and safety. The proposed formula of calculating
accident rate relies on an accurate record of the total number of accidents
occurred and the total number of workers engaged in construction projects in a
year. However, the total number of workers is difficult to obtain as there is a
complicated sub-contracting system and a rapid flow of labour in the
construction industry. This figure can be obtained relatively easier in the
public sector since the contractors are required to submit a Monthly Return of
Site Labour Deployment and Wages Rates in the Construction Industry (Form
GF527) to the Census and Statistics Department. However, there is no such
requirement in the private sector. Thirdly, the calculation of the projects value
and profit also poses some problems. The data are difficult to obtain because of
its confidential nature. Besides, the concept of value and profitability is not
appropriate if the project is publicly funded. Usually, the main aim of the public
project is to serve the citizens and not profit-making. Therefore, this category
may only be useful in private projects. The last limitation is on the
measurement of environmental friendliness. The measurement method of EIA
is only applicable in limited designated projects, such information may not be
available across all projects. As an alternative, the implementation of ISO 14000
system and the number of the complaints received from the environmental
departments for pollution are better indicators in this category.
Significance of the study
Success is always a debatable topic. In the construction industry, time, cost and
quality have long been defined as the basic criteria of measuring success.
However, different ideas have emerged in the last decade. Therefore, a
comprehensive review of KPIs is essential.

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First, if one wants to have outstanding performance, one must know what is Key performance
the definition of success in order to make correct measures to achieve this goal.
indicators
Without a general agreement on how to measure success, project managers will
manage their resources by nothing more than their perceiving intuition. They
cannot ensure whether their actions are correct or not. The proposed
framework provides an unambiguous methodology for measuring project
219
performance. It can also enhance clients, contractors, and designers
understanding of running a successful project and set a base for them to
improve the project performance. It is beneficial to project managers by
providing helpful information that is necessary for the achievement of a
successful construction project. Assessment of likely project outcomes can be
ascertained during construction.
The current study also helps set a benchmark for measuring the performance
of a project. It develops a general and comprehensive base for future research,
especially in the determination of success factors. This paper provides an
overview of success measures that can be applicable either in a general
construction project, or in a specified type of project, such as health-care or hotel
projects.
Conclusion
Project success has been a recurring topic in the construction management field
for many decades. The review of journals on project success reveals that cost,
time and quality are the three basic and most important performance indicators
in construction projects. Other measures, such as safety, functionality and
satisfaction, etc., are attracting increasing attention. A set of KPIs, measured
both quantitatively and qualitatively, are developed as a result of this
comprehensive review. To verify the practicality and usefulness of these KPIs,
case studies on three hospital projects were examined. It was shown that the
identified KPIs are in general good indicators of the performance of
construction projects. They provide a useful framework for measuring and
comparing project performance for future studies. They also furnish project
managers, clients and other project stakeholders useful information to
implement a project successfully.
Note
1. 1 very dissatisfied; 2 dissatisfied; 3 slightly dissatisfied; 4 neither dissatisfied nor
satisfied; 5 slightly satisfied; 6 satisfied; 7 very satisfied.
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Key performance
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