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Productivity and Performance

Measurement in Construction

An understanding of construction productivity and performance is essential for deploying

improvement strategies successfully. As in any other enterprise, the principle of continu-
ous improvement involves learning from current or past activity and using that knowl-
edge to improve future activities. That knowledge transfer works best when enabled with
the PDCA cycle (plan, do, check, and act), which in turn is highly dependent on measure-
ment (i.e., a quantification of accomplishment). Productivity and performance measure-
ment provide a foundation for improving design and construction delivery, regardless
of the methods utilized in each respective project. This foundation is especially helpful
with lean construction methods, as they are based on a culture of learning and continuous
improvement.

Definition of Productivity
Productivity is the measure of how well resources are brought together in organizations
and utilized for accomplishing a set of goals. Productivity reaches the highest level of
performance with the least expenditure of resources. Productivity is measured as the
ratio of outputs to inputs. In the construction environment it may be represented as the
constant-in-place value divided by inputs such as the dollar value of material and labor.
Productivity measurements may be used to evaluate the effectiveness of using supervi-
sion, labor, equipment, materials, and so on to produce a building or structure at the lowest
feasible cost.
The Bureau of Labor Statistics (BLS) defines productivity as a ratio relating output (goods
and services) to one of the inputs (labor, capital, energy, etc.), that are associated with that
output. There are four classical factors: land, materials, capital, and labor.
Overriding these four factors is a fifth factor; namely, technology. In the manufacturing
industry productivity is usually described in quantitative terms, but in the construction
industry it is usually understood in qualitative terms. Consequently, construction pro-
ductivity cannot be analyzed scientifically at the working level. For productivity analysis
it is essential to identify the significant productivity factors, quantify them, and establish
the relationship of these factors with each other. The work situation in construction is
project-oriented and much more dynamic than that in the manufacturing industry, intro-
ducing many complex factors affecting productivity in construction. These factors involve:
managerial, technological, regulatory, labor related, engineering, and craft-related items.

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© 2011 by Taylor and Francis Group, LLC