Project Tracking to Improve

Labor Productivity:
An Earned Value Approach
By
Awad S. Hanna, Ph.D., P.E.
Professor
University of Wisconsin-Madison
Department of Civil and Environmental
Engineering
2314 Engineering Hall, 1415 Engineering Dr.
Madison, WI, 53706
Tel (608) 263-8903
Hanna@engr.wisc.edu

President
Hanna Consulting Group Inc.
1314 Farwell Drive
Madison, WI 53704
Tel (608) 246-0221
Fax (608) 246-0614

No part of this publication may be reproduced or transmitted in any form, or by any

means, without written consent from Hanna Consulting Group Inc.

Biography
Awad S. Hanna, Ph.D., P.E
Awad S. Hanna is a professor and chair of the construction engineering and management program
at the University of Wisconsin-Madison, department of Civil and Environmental Engineering.
Dr. Hanna holds M. S. and Ph.D. degrees from Penn State University and he is a register
professional engineer in the U S and Canada. Awad has been an active construction
practitioner, educator and researcher for over 30 years. He has taught construction
management courses at Penn State University, Memorial University of Newfoundland, Canada,
and University of Wisconsin-Madison. Dr. Hanna has conducted several research projects for
the Electrical Contracting Foundation including landmark studies on the cumulative impact of
change orders on electrical/mechanical labor productivity, schedule compression and
acceleration, impact of stacking of trades on labor productivity, performance evaluation for
electrical supervisors, and craftsmen, and productivity factors in electrical construction. Dr.
Hanna has conducted research for other national organizations including the National Highway
Research Program, the Mechanical Contracting Foundation, the New Horizon Foundation and
the Construction Industry Institute. Dr. Hanna has taught more than 300 successful seminars
and workshops in more than 35 states on topics such as change orders impacts, project
scheduling, estimating, labor productivity, construction delay claims.

Dr. Hanna is also a national consultant representing and assisting many contractors and owners in
productivity losses related to change orders, acceleration and compression, delay, and trade
stacking.

Prof. Awad Hanna

Why Track Labor Productivity?

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Productivity Improvement
y

What cant be measured

cant be improved

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Learning Objectives
1.

Accurately measure physical project

percent complete in real time

2.

Measure project performance every

reporting period. Performance Factor

3.

Predict project outcomes as early as 20-25%

project complete

4.

Identify problem areas and activities

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Objectives (Continued)
5.

Establish and validate Hannas Control Points

6.

Track change orders and quantify impact

7.

Track Project Schedule

8.

Analysis of trends

9.

Project ratios analysis (Apprentice/Journeyman

ratio)

10. Track a variety of actual mechanical/SM

construction projects

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Productivity Analysis
Selected
Selected Activity
Activity
In
In Progress
Progress

Work
Work hours
hours

Quantities
Quantities

Productivity
Productivity
Calculations
Calculations

Performance
Performance
Evaluation
Evaluation

Workhour
Workhour
Forecast
Forecast

Analysis
Analysis of
of
Trends
Trends

Prof Awad S. Hanna

Estimate Activity Percent Complete

(Output)
1)

Subjective Evaluation (Observed)

2)

Quantity Installed as Measured

3)

Binary Approach

4)

Partial Complete Method

Ductwork Installation% of Work
Detailing/Coordination

15%

Hanger Installation

15%

Duct Rough-In

50%

Finish and Trim Work20%

TOTAL

100%

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Earned Value Fundamentals

Earned Hours = Qty(Installed)x(Estimated Production Rate

Earned Hours=Qty(Installed)/Qty(Estimated)xBase
Hours(Estimated)
Or

Earned Hours=Base Hours(Estimated) x Percent Complete

Prof. Awad Hanna

Develop Work Breakdown

Structure

HVAC
DUCTS

Erected

Connected

Accepted

Phase Breakdown
Area Breakdown

Hanna 2004
Prof. Awad Hanna

10

Set up The Earned Value Spread Sheet

Code

Description

Base % Complete
Hr

Earned

Actual

Total Estimated Hours

Prof. Awad Hanna

11

Simplified Earned Value Example

(1)
Activity

(2)
Budgeted
Hours

(3)
Percent
Complete

(4)
Earned
Hours

(5)
Actual
Hours

(6)
Activity
Performanc
e Factor

Ductwork 1st Floor Area A

973

78%

759

867

0.88

Ductwork 1st Floor Area B

821

59%

484

579

0.84

Ductwork 2nd Floor Area A

325

30%

98

65

1.50

Ductwork 2nd Floor Area B

151

15%

23

15

1.51

Piping 1st Floor Area A

383

100%

383

366

1.05

Piping 1st Floor Area B

574

40%

230

248

0.93

Piping 2nd Floor Area A

456

5%

23

23

0.99

Piping 2nd Floor Area B

195

0%

N/A

AHU on 2nd Floor

160

35%

56

65

0.86

Grilles/Flex

240

25%

60

55

1.09

VAV's

38

50%

19

24

0.79

Linear Diffusers 1st Floor

75

95%

71

85

0.84

Linear Diffusers 2nd Floor

58

0%

N/A

Misc. Metal Install

20

25%

1.00

Set Equipment

54

30%

16

12

1.35

4523

49%

2226

2409

0.92

PROJECT TOTALS

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12

Example (Continued)
Job % Complete = Earned = 2226 = 0.492
Base
4523
Performance Factor =

Earned = 2226 = 0.92

Actual 2409

Predicted Hrs at Comp. = Hrs-to-date = 2409 = 4896

Job % Comp. 0.492
4896 > 4523, therefore cost overrun to date.

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13

Typical Performance Factor Curve

1.0

25%

50%

75%

100%

% Complete

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14

Examples: Case Studies

y

Example 3 Projects Tracked

- See below for summary of completed case studies
Project Item

Case Study #1

Case Study #2

Case Study #3

Type of Work

Mechanical

Architectural
Sheet Metal

Sheet Metal

Project Size (Man-hours)

13,731

15,268

7,344

Project Duration (Weeks)

17

29

37

Project Location

Lower Midwest

Western US

Upper Midwest

Final Labor Status

Under by 371 hrs. Over by 1,159 hrs. Under by 923 hrs.

Final Schedule Status

Behind by 2 wks Behind by 12 wks. Ahead by 13 wks.

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15

Contractor Input Worksheet

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16

Quantity Installed Worksheet

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17

Method Summary Worksheet

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18

Performance Factors: Quantity

Installed
Project Performance Factors for Quantity Installed Method

1.30

1.27
1.19

1.18

1.20

1.19

1.17

1.15

Performance Factor

1.15
1.14
1.10
1.06

1.04

1.06

1.08

1.05

1.13

1.12

1.14

1.01

1.00

1.03

1.00
0.95

0.95

0.93

0.87

0.75

20%

0.92

Case Study #1
Case Study #2
Case Study #3
Planned Productivity

0.80

10%

0.94

0.94

0.93

0.90

0.70
0%

0.95

0.99

30%

40%

50%

60%

Percent Complete

70%

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80%

90%

100%

19

Performance Factors: Subjective

Evaluation
Project Performance Factors for Subject Evaluation Method
1.30
1.26

1.29
1.26

1.20

1.16

1.21

1.13

Performance Factor

1.18
1.10

1.07
1.02

1.07

0.98

1.00

0.96

0.96

0.97

0.88

0.98
0.96

0.92

0.88

20%

30%

40%

1.03
0.94

0.94

0.92

0.95

Case Study #1
Case Study #2
Case Study #3
Planned Productivity

0.80

10%

1.02

0.99

0.92

0.92

0.90

0.70
0%

1.13

50%

60%

Percent Complete

70%

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80%

90%

100%

20

Forecast Error: Quantity Installed

Man-Hour Forecast Error Against Actual Final Man-Hours

15%

11.0%
10%

Forecast Error

7.5%

6.1%

9.3%

5.7%
4.1%

5%

5.2%

3.6%
4.4%

3.2%

2.0%

1.8%

0%

0.0%
-0.2%

-0.8%

-3.3%

-2.7%

-2.7%

-5%
-7.2%

-4.5%

-5.5%
-6.0%

Case Study #1
Case Study #2
Case Study #3
Zero Error

-10%
-12.7%
-15%
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percent Complete

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21

Forecast Error: Subjective Evaluation

Man-Hour Forecast Error Against Actual Final Man-Hours

10%
7.5%

5.9%

6.0%

5%
2.8%
2.2%

Forecast Error

0.3%

0.5%

2.4%

-2.7%

-2.3%

0.0%

-0.4%

0%
-3.2%

2.9%

3.7%

-2.8%

-1.4%

-0.7%

-2.3%

-5%

-4.5%
-5.6%

-5.5%

-6.6%
-10%

Case Study #1
Case Study #2
Case Study #3
Zero Error

-11.2%
-12.6%
-15%
0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Percent Complete

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22

Project Tracking Benefits

y

Early Warning Signs of Labor and/or Schedule Over-runs

Identification of Underproductive Activities

Preparation of Future Estimates

Proving Construction Inefficiency Claims

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23

Major Conclusions
y

The Project Performance Factor does not vary by

more than 10% at the 30% project completion mark.

The Quantity Installed and Subjective Evaluation

Method have a man-hour forecast error of less than
10% for the entire project duration.

The linear regressed man-hour forecasts become

useful (accurate) after 25% project complete.

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24