FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS

This chapter presents the research process and the methodology that will be used forempirical testing of the research model which has been developed in chapter 2.Chapter 4 – Data Analysi

International School of Business

-Bui Trung Kien

FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY

IN THE CONSTRUCTION PROJECTS

Ho Chi Minh City - 2012

-Bui Trung Kien

FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY

IN THE CONSTRUCTION PROJECTS

ID: 60340102

SUPERVISOR: Dr CAO HAO THI

Ho Chi Minh City - 2012

Firstly, I would like to express my deepest appreciation to my supervisor Dr Cao HaoThi for his professional guidance, valuable advice, continuous encouragement, andmotivated support that made this thesis possible

I would like to extend deep senses of gratitude to Prof Nguyen Dinh Tho and lecturerswho have taught and transferred me valuable knowledge and experience during theperiod of Master of Business course at International School of Business

Special thanks, to all of my dear friends in MBUS 2010 class, who gave me usefulmaterial, response and experience to conducting this study

I would like to express my grateful thanks to my friends and all the constructioncompany in Vietnam who participated in filling the questionnaires and provided thevaluable information for this study

Personally, I wish to express my deep gratitude to my parents, my wife, sister andbrother for their spiritual support and encouragement during the time of study

Ho Chi Minh City, Vietnam,

12 Dec 12

Bui Trung Kien

Productivity has an important role to help construction companies to be competitive,achieve set goals, meet stakeholder and value propositions The objectives of thisresearch are to identify the factors affect to the Labor Productivity Fluctuation inconstruction project in Vietnam, to access the impact strength of influenced factors onthe fluctuation of labor productivity and to suggest recommendations to reduce thefluctuation of labor productivity

The objective of this study have been achieved through study 233 questionnaires andthe results of analysis of 46 variables considered in questionnaire show that, there arefive main factors positively affect to Labor Productivity Fluctuation in constructionproject They are Supervision factor, Motivation factor, Workforce factor,Material/Equipment factor and Schedule factor After conducting Multiple LinearRegression and ANOVA analysis, the model of study have been indentified whichcould explains 68.7 % of the total variance in Labor Productivity Fluctuation andANOVA testing result also shows that there are significant different among projectcharacteristic group on LPF

The results of this study recommend that construction companies have to conductlabour productivity study in their project to reduce Labour Productivity Fluctuation It

is important to have training program to increase labour skill, improve laborcommitment and the relationship among worker by increasing labor benefit and teambuilding program It also suggested that the planning software should be used in theproject to have a good planning work to reduce the frequency of working overtime andmake the labor more productivity

TABLE OF CONTENT

ACKNOWLEDGMETS i

ABSTRACT ii

TABLE OF CONTENT iii

LIST OF FIGURES vii

LIST OF TABLES viii

LIST OF ABBREVIATIONS x

CHAPTER 1: INTRODUCTION 1

1.1 Statement of the problem 1

1.2 Objective of the study 2

1.3 Scope of the study 2

1.4 Research contribution 2

1.5 Research Structure 3

CHAPTER 2: LITERATURE REVIEW 5

2.1 Definition related to project and project management 5

2.1.1 Project 5

2.1.2 Project Management 5

2.2 Definitions related to productivity 6

2.2.1 Productivity 6

2.2.2 Labor Productivity 7

2.2.3 Total Productivity 8

2.2.4 The formulation for the fluctuation of labor productivity 9

2.2.5 Construction productivity 10

2.3 Factors affecting construction productivity 10

2.4 Factor and indicators affect to labour productivity fluctuation 17

2.4.1 Factor related to workforce 17

2.4.2 Factor related to management team 18

2.4.3 Factor related to motivation 18

2.4.4 Factor related to schedule compression 19

2.4.5 Factor related to material/equipment 20

2.4.6 Factor related to supervision 22

2.4.7 Factor related to safety 23

2.5 Project characteristics 24

2.6 Conceptual framework 25

CHAPTER 3: METHODOLOGY 27

3.1 Research process 27

3.2 Sampling design 28

3.2.1Population 28

3.2.2 Sample size 28

3.3 Measurement scales 29

3.4 Questionnaire design 29

3.5 Pilot survey 30

3.6 Data collection 31

3.7 Descriptive statistics 31

3.8 Reliability analysis 31

3.9 Exploratory analysis 32

3.10 Multiple regression analysis 32

3.11 ANOVA analysis 32

CHAPTER 4: DATA ANALYSIS 33

4.1 Sample descriptive statistics 33

4.2 Reliability analysis 36

4.3 Exploratory factor analysis 39

4.4 Revised the research model 43

4.5 Multiple regression analysis 44

4.5.1 Correlation testing 44

4.5.2 Multiple linear regression analysis 45

4.5.2.1 Theory model 45

4.5.2.2 Result on the linear regression analysis 45

4.5.3 Hypothesis testing 47

4.5.4 One-Way ANOVA Analysis in project characteristic 49

4.5.4.1 One-Way ANOVA testing in type of project 49

4.5.4.2 One-Way ANOVA testing in project ownership 51

4.5.4.3 One-Way ANOVA testing in project budget 53

4.5.5 Results of ANOVA testing on project characteristics 53

4.6 Summary of data analysis result 53

CHAPTER 5: RECOMMENDATION AND CONCLUSION 55

5.1 Research finding 55

5.2 Managerial implications 56

5.3 Limitations and future research 57

APPENDICES 61

Appendix A: Questionnaire (English Version) 63

Appendix B: Questionnaire (Vietnamese Version) 69

Appendix C: First time running- Eigenvalues 76

Appendix D: First Time Running – Factor Loadings 77

Appendix E: Charts of Multiple Regression Analysis 79

LIST OF FIGURES

Figure 2.1: Factor model of construction labor productivity 11

Figure 2.2: Factors that are statistical significant 12

Figure 2.3: External affects to construction on-site productivity 13

Figure 2.4: Internal affects to construction on-site productivity 13

Figure 2.5: Workforce factor and LPF 19

Figure 2.6: Management team factor and LPF 19

Figure 2.7: Motivation factor and LPF 20

Figure 2.8: Schedule compression factor and LPF 21

Figure 2.9: Material/Equipment factor and LPF 22

Figure 2.10: Supervision factor and LPF 23

Figure 2.11: Safety factor and LPF 24

Figure 2.12: Conceptual framework 25

Figure 3.1: Research process 27

Figure 4.1: Revised conceptual model 43

Figure 4.2: Final research model 53

LIST OF TABLES

Table 2.1: Factor affecting on construction workforce productivity 14

Table 2.2: Factor affecting on labor productivity 16

Table 4.1: Mode of data collection 33

Table 4.2: Distribution of respondents’ position 34

Table 4.3: Type of project 34

Table 4.4: Ownership of project 35

Table 4.5: Total budget of project 35

Table 4.6: Rejected variables 36

Table 4.7: Reliability analysis result 37

Table 4.8: KMO and Bartlett's Test 40

Table 4.9: Total variance explain of factor analysis 40

Table 4.10: Factor analysis results 41

Table 4.11: Correlation analysis result 44

Table 4.12: Model summary of multiple linear regression analysis 46

Table 4.13: ANOVA of multiple linear regression analysis 46

Table 4.14: Coefficient of multiple linear regression analysis 47

Table 4.15: Hypothesis summary 49

Table 4.16: Descriptive for type of project group 50

Table 4.17: ANOVA for type of project group 50

Table 4.18: Descriptive for project ownership group 51

Table 4.19: ANOVA for project ownership group 51 Table 4.20: Descriptive for project budget group 52 Table 4.21: ANOVA for project budget group 52

LIST OF ABBREVIATIONS

EFA: Exploratory Factor Analysis

GDP: Gross Domestic Product

GNP: Gross National Product

HCMC: Ho Chi Minh City

KMO: Kaiser-Meyer-Olkin

LPF: Labour productivity Fluctuation

MRS: Market Research Society

PMBOK: Project Management Body of Knowledge

CHAPTER 1: INTRODUCTION 1.1 Statement of the problem

The construction industry has an important role in the developed and developingcountries In the Vietnam, construction industry is growing very strongly and hasgained many significant achievements The General Statistic Office of Vietnam (2011)reported that it accounts for about 6.41 % of gross national product and 6.4 % of totalemployment The expansion of construction activities has generated a lot of jobs forskilled, semi-skilled, and unskilled labour, but beside with this, Vietnam’s laborproductivity remains low against other Southeast Asian countries despite witnessing anon-year rise in the total productivity of 5.1% as showed in the Vietnam’s labour andsocial trends report (Institute of Labour Science and Social Affairs, 2010)

A successful construction project is one that achieves the intended objectives in terms

of cost, time, quality and safety This is possible only when the planned levels ofproductivity can be attained However, productivity, or lack of it, is perhaps one of themain problems confronting the construction industry, the construction firm and theconstruction project As a consequence of the importance of the construction industry,the nature of construction projects and the available economic resources, moreemphasis should be given to improving productivity

Productivity enables an organization to be competitive, achieve set goals, meetstakeholder value propositions and maintain strategic and financial health At theindustry level, productivity enables the sector to maintain satisfied clientele, attractinvestment, remain viable and contribute to the economic growth and well-being of thenation (Durdyev and Mbachu, 2011) Understanding critical factors affecting thefluctuation of labor productivity is very necessary to improve the efficient ofconstruction project likes reduce total cost and time, and it could increase the

competitive advantages of the construction company in Vietnam toward foreignconstruction company All the above things leads this study to raise the questions

“What are the factors affecting labor productivity fluctuation in the construction” and

“How to evaluate the effects of this factor on the fluctuation of labor productivity” Toanswers these questions, it necessary to conduct the topic Factors Affecting theFluctuation of Labor Productivity in the Construction Projects

1.2 Objective of the study

This study is conducted to achieve the following objectives

- To identify factors affecting to the fluctuation between real and planed laborproductivity of construction projects

- To assess the impact strength of these factors on the fluctuation of laborproductivity

- To analysis the difference in Labor Productivity Fluctuation due to ProjectCharacteristics

1.3 Scope of the study

The study will be conducted base on the accomplished construction projects inVietnam from 2002 until now, and more focus in HCMC The respondents will be theperson who has a important role in the project such as clients, contractors, projectmanagers, construction managers, foreman, chief engineers … and has had experience

in managing specific construction project

1.4 Research contribution

The research results can be used to:

- Help Construction Companies in Vietnam to have an overview on Labor Productivity

in construction project

- Help Construction Companies in Vietnam to have deeply awareness about the mainfactors affect to the fluctuation of labor productivity in construction project and theycan manage Labor Productivity more effectively

- Help them in building a suitable Labor Productivity Plan with its characteristic andcondition

- Be a reference for new investors who want to invest in construction industry inVietnam

- Help to develop Vietnam’s construction industry in particular and economicdevelopment in general

Chapter 2 – Literature Review

This chapter will present recent definitions related to project management,productivity, labor productivity and construction productivity Base on the previousstudies, this section also identify the factors affecting to labor productivity inconstruction project, states the Hypothesis and proposed the research model for thisstudy

Chapter 3 – Methodology

This chapter presents the research process and the methodology that will be used forempirical testing of the research model which has been developed in chapter 2.

Chapter 4 – Data Analysis

This chapter presents the data analysis result, this is the most significant part of thestudy as it will contain the data analysis including of Sample Descriptive Statistics,Reliability Analysis, Exploratory Factor Analysis, Multiple Regression Analysis andANOVA Analysis to provide a very comprehensive picture about the relationship offactors affecting to the fluctuation of labor productivity in construction project inVietnam

Chapter 5 – Conclusion and Recommendation

With results from analyzing data collected in chapter 4, a conclusion as well as theobjective required is established The finding reconfirms the factors affecting to thefluctuation of labor productivity in construction project Finally, recommendations arebrought to improve labor productivity in construction project and give direction forfuture research

CHAPTER 2: LITTERATURE REVIEW

This chapter presents a review of relevant literature related to factors affecting laborproductivity and consists of definitions related to project and project management,definitions of productivity, total productivity and construction productivity Thischapter also states the hypotheses and propose conceptual model for this study

2.1 Definition related to project and project management

2.1.1 Project

A guide to the Project Management Body of Knowledge (2008, p 5) has defined aproject as “a temporary endeavor undertaken to create a unique product, service, orresult The temporary nature of projects indicates a definite beginning and end The end

is reached when the project’s objectives have been achieved or when the project isterminated because its objectives will not or cannot be met, or when the need for theproject no longer exists Temporary does not necessarily mean short in duration.Temporary does not generally apply to the product, service, or result created by theproject; most projects are undertaken to create a lasting outcome”

Lake (1997) defined a project as “a temporary endeavor involving a connectedsequence of activities and a range of resources, which is designed to achieve a specificand unique outcome and which operates within time, cost and quality constraints andwhich is often used to introduce change”

2.1.2 Project management

Project management has been defined by PMBOK (2008, p.8) as “The application ofknowledge, skills, tools and techniques to project activities to meet projectrequirement”

Yuong (2007) defined project management as “a dynamic process that utilizes theappropriate resources in a controlled and structured manner to achieve some clearlydefined objectives indentified as strategic needs”.

2.2 Definitions related to productivity

2.2.1 Productivity

Prokopenko (1987) defined that “productivity is the relationship between the outputgenerated by a production or service system and the input provided to create thisoutput Thus, productivity is defined as the efficient use of resource – labors, capital,land, materials, energy and information – in the production of various goods orservices Productivity can also be defined as the relationship between results and thetime it takes to accomplish them Time is often a good denominator since it is auniversal measurement and it beyond human control The less time taken to achieve thedesired result is the more productive the system” Prokopenko also stated that

“regardless the type of production, economic or political system, the definition ofproductivity remains the same Thus, though productivity may mean different things todifferent people, the basic concept is always the relationship between the quantity andquality of goods or services produced and the quantity of resources used to producethem”

Eatwell and Newman (1991) defined productivity as a ratio of some measure of output

to some index of input use Put differently, productivity is nothing more than arithmeticratio between the amount produced and the amount of any resources used in the course

of production This conception of productivity goes to imply that it can indeed beperceived as the output per unit input

International Labor Office (as cited in Mostafa, 2003) described productivity as

“Productivity is a comparison between how much you have to put in to the projects in

terms of manpower, material, machinery or tools and the result you get out of theproject Productivity has to do with the efficiency of production Making a site moreproductive means getting more output for less cost in time, Productivity covers everyactivity that goes into completing the construction site works, from the planning state

to the final site clearing, if the contractor can carry out these activities at lower cost inless time with fewer workers or with less equipment the productivity will beimproved”

Overall, productivity could be defined as the ratio of outputs to inputs

Productivity = Outputs / Inputs

Where, outputs could be in units or dollar value of product or service, revenuegenerated or value added Input could be in units or dollar value relating to labor,equipment, materials, capital, so it will be very important to specify the inputs andoutputs to be measured when calculating productivity

2.2.2 Labor Productivity

At the national level, labor productivity is computed by taking the entire economicallyactive population as the input and the total value of goods and services produced as theoutput (Prokopenko, 1987)

National productivity = GNP/Population

It is general knowing that almost all the definitions of productivity centre on ‘outputs’and ‘inputs’ Unfortunately, definition of either output or input or both may sometimespose more difficulty to the understanding of what productivity is For output, it is in theform of goods if visible and services if invisible Input on the other hand is less easilydefined Since production (creation of goods and services) is a team effort thereby

making the demand for inputs to be interdependent, various elements (inputs) areinvolved in the production of output This makes the definition of input more complexthan that of output To ease this problem of defining inputs, it is common a practice toclassify inputs into labor (human resources), capital (physical and financial assets), andmaterial Again, in an attempt to circumvent the difficulty of defining inputs,productivity is sometimes defined as goods and services produced by an individual in agiven time In this sense, time becomes the denominator of output with the assumptionthat capital, energy and other factors are regarded as aids, which make individualsmore productive.

Freeman (2008) stated that Labor productivity is equal to the ratio between a volumemeasure of output (gross domestic product or gross value added) and a measure ofinput use (the total number of hours worked or total employment)

Labor productivity = volume measure of output / measure of input use

“The volume measure of output reflects the goods and services produced by theworkforce Numerator of the ratio of labor productivity, the volume measure of output

is measured either by gross domestic product (GDP) or gross value added (GVA) Themeasure of input use reflects the time, effort and skills of the workforce Labor input ismeasured either by the total number of hours worked of all persons employed or totalemployment”

2.2.3 Total Productivity

Total productivity can be described as the overall measure of economic effectiveness

on the basis of output per unit of all resource(s) utilized In the last decade, there hasbeen a definite move towards its utilization and that is the ratio of total output to thesum of all input factors (Stainer, 1997) as Equation [2.1]

TP =

Q E C M L

2.2.4 The formulation for the fluctuation of labor productivity

The fluctuation of labor productivity is the difference between actual labor hours and planedlabor hours of project/work package per actual labor hours of project/work package, so the

P

P A

W

W W

[2.2]

Where, L = Fluctuation of labor productivity

WA = Total actual labor hours of project/work package

WP = Total planed labor hours of project/work package

If L<0 : Actual labor productivity is higher than planed

2.2.5 Construction productivity

Productivity in construction is often broadly defined as output per labor hour Sincelabor constitutes a large part of the construction cost and the quantity of labor hours inperforming a task in construction is more susceptible to the influence of management

than are materials or capital, this productivity measure is often referred to as labor productivity However, it is important to note that labor productivity is a measure of the

overall effectiveness of an operating system in utilizing labor, equipment and capital toconvert labor efforts into useful output, and is not a measure of the capabilities of laboralone For example, by investing in a piece of new equipment to perform certain tasks

in construction, output may be increased for the same number of labor hours, thusresulting in higher labor productivity (Hendrickson, 1998)

Hendrickson also presented that construction output may be expressed in terms offunctional units or constant dollars In the former case, labor productivity is associatedwith units of product per labor hour, such as cubic yards of concrete placed per hour ormiles of highway paved per hour In the latter case, labor productivity is identified withvalue of construction (in constant dollars) per labor hour The value of construction inthis regard is not measured by the benefit of constructed facilities, but by constructioncost Labor productivity measured in this way requires considerable care ininterpretation For example, wage rates in construction have been declining in the USduring the period 1970 to 1990, and since wages are an important component inconstruction costs, the value of construction put in place per hour of work will decline

as a result, suggesting lower productivity

2.3 Factors affecting construction productivity

There are numerous events that can cause a loss of labor productivity Thomas andZavrski (as cited in Rojas, 2008) had developed a factors model, which graphically

show in Figure 2.1 There are two broad categories related to the work that affect laborproductivity These are work to be done and the environment in with the work is doneand it can be viewed as either contributing to or inhibiting this conversion process Thefigure shows that the inputs in terms of labor hours are converted to outputs orquantities of work through the application of some work method.

Figure 2.1: Factor model of construction labor productivity

Source: Rojas (2008).

Homyun Jang et al (2009) suggested variables affecting to labor productivity and havebeen identified 25 critical variables and grouped to 4 groups of factors, namely workmanagement, work technique, work characteristic and worker component as shown inFigure 2.2

Work Environ.

Figure 2.2: Factors that are statistical significant

Source: Homyun Jang et al (2009)

Labor productivity and the factors that affect it have been studied extensively in thefield of construction research Durdyev and Mbachu (2011) indentified 56 variablesthat affect construction productivity, and categorized them in to 8 factors of internaland external Figure 2.3 and Figure 2.4 Figure 2.3 represents external constraint withthree groups of factor: Unforeseen events, statutory compliance and other externalforces Figure 2.4 shows the internal constraints with five groups of factors: Projectcharacteristics, project finance, workforce, project management andtechnology/process

Critical factors influencing productivity

Rework Work continuity Information technology

Worker experience Worker education Worker training Worker expertise Worker motivation

Work management Work technique

Work characteristic Worker component

Figure 2.3: External affects to construction on-site productivity

Source: Durdyev and Mbachu (2011)

Figure 2.4: Internal affects to construction on-site productivity

Source: Durdyev and Mbachu (2011)

External group of factors

Fluctuations in material prices Fluctuation in exchange rate Energy crises/costs.

Interest rate/cost of capital Market conditions and level of competitions in the industry for jobs Frequency change in government policies/legislations on construction Rapid technological advances Increase in industry or society-wide litigations/adversarial relations.

Health & Safety in employment Act.

Resource management Act

Local Authority bylawa

Construction contracts

Building/ Act, consent, regulation.

Employment relation Act.

Consumer guarantees Act.

Fair trading Act

Other external forces Unforeseen events

Build ability issue

Site location and environment

Type of procurement adopted

Adequacy of planning and risk management process Coordination, supervision, performance monitoring & control

Project Organizational culture Relationship management Competencies of the project team

Project management style Frequency of design changes Client’s over influence on the

Late of payment

Rework

Under valued work/poor estimation

Dispute and litigation costs

Lenders’ high interest charges

High insurance premiums

Inadequate supply or high cost on

needed resources.

Suitability or adequacy of plant & equipment Method of construction Technology employed Lack of awareness of or training on new technologies Resistance to accept new technologies

Inadequate IT infrastructure and application in construction industry

Level of commitment

Level of empowerment

Level of skill and experience

Level of familiarity with current job

and conditions

Level of involvement of direct labor or

subcontract

Workforce absenteeism

Level of staff turnover/churn rate

Health of the workforce.

Project characteristics Project management

Project finance

Technology/Process Workforce

Kazaz et al (2008) determined four factors and it’s variables as presented in Table 2.1.

Table 2.1: Factor affecting on construction workforce productivity

Socio-psychological factors Organizational Factors

Sharing problems and their results

Social activity opportunities

Cultural differences

Worker participation indecision

making

Distance from home

Distance from population centres

Quality of site management Material management Systematic flow of work Supervision

Site layout Occupation education and training Crew size and efficiency

Firm reputation Camping conditions Relaxation allowances

Economic factor Physical factors

On-time payment

Amount of pay

Working in social insurance

Incentive payments and financial

Shift Site congestion

Source: Kazaz et al., (2008)

Enshassi (2007) classifies factors effecting productivity in the construction in to 10groups, namely: factors associated with the internal workforce, factors associated withleadership, factors associated with work motivation factor associated with time, factorsassociated with materials and equipment, factors related to supervision, factors related

to project characteristic, factors related to security, factors related to quality, andexternal factors

Soekiman et al (2011) identified 113 variables affecting construction labor productivityand these variables were grouped into 15 groups of factors according to theircharacteristics, namely: Design, execution plan, material, equipment, labor, health andsafety, supervision, working time, project factor, quality, financial, leadership andcoordination, organization, owner/consultant, external factor

Nabil Ailabouni et al (2007) indentified 32 significant variables affecting theproductivity in the construction industry then grouped into 4 group base on theircharacteristic, namely: Environment factors, organizational factors, group dynamics,personal factors

Makulsawatudom and Margaret (2001) indentified 23 variables Henry et al (2007)suggested 36 variables: Incompetent supervisor Lack of skill of the workers, Rework,lack of tool/equipment, poor construction method, poor communication, stoppagesbecause of work being rejected by consultant, political insecurity, tool/equipmentbreakdown…

In summary, based on the previous research and after refinement, 46 variables areselected and grouped to 7 groups according to their characteristics, namely: Workforce,management team, motivation, schedule compression, material/equipment, supervision,safety and All of them are shown in Table 2.2

Table 2.2: Factor affecting on labor productivity

No Factor Variables/Measurement scale Code Author/Year

Lack of skill and experience of the workers V.1.1

Lack of empowerment (training and resourcing) V.1.2

High workforce absenteeism V.1.3

High workforce turnover V.1.4

Low labor morale/commitment V.1.5

Increase of laborer age V.1.6

Poor health of the workers V.1.7

1

Poor relations among workers V.1.8

Ailabouni et al (2006), Durdyev and Mbachu (2011), Enshasi et al (2007), Henry

et al (2007), Homyun Jang et al (2009), Kazaz et al (2008), Makulsawadom et al (2001), Soekiman et al (2010)

Bad leadership skill V.2.1

Poor relations between labor and superintendents V.2.2

Lack of labor surveillance V.2.3

Lack of periodic meeting with labor V.2.4

Enshasi et al (2007), Homyun Jang et al (2009) Nabil Ailabouni et al (2006).

Late payment V.3.1

Low amount of pay V.3.2

Little or no welfare V.3.3

Little or no financial rewards V.3.4

Lack of labor recognition program V.3.5

Poor condition of camping V.3.6

Lack of place for eating and relaxation V.3.7

Ailabouni et al (2006), Durdyev and Mbachu (2011), Enshasi et al (2007 Homyun Jang et al (2009), Kazaz et al (2008), Soekiman et al (2010)

Working 7 days per week without taking a holiday V.4.1

Frequency of working overtime V.4.2

Material shortages V.5.1

Low quality of raw material V.5.2

Unsuitable material storage location V.5.3

Lost time to find material because of poor arrangement V.5.4

Equipment and tools shortages V.5.5

Poor condition of equipment and tools V.5.6

Ailabouni et al (2006), Durdyev and Mbachu (2011), Enshasi et al (2007), Henry

et al (2007), Homyun Jang et al (2009), Kazaz et al (2008), Makulsawadom et al (2001), Soekiman et al (2010)

Poor or no supervision method V.6.1

Ignore safety precaution V.7.1

Inadequate lighting V.7.3

No have safety engineer on site V.7.4

Unsafe working conditions V.7.6

Inadequate safety plan V.7.7

7

Lack of labor safety

Durdyev and Mbachu (2011), Enshasi et al (2007) Henry et al (2007) Homyun Jang et

al (2009), Kazaz et al (2008), Makulsawadom et al (2001).

2.4 Factors and indicators affect to labour productivity fluctuation

2.4.1 Factor related to workforce

Enshassi et al (2007) identify 8 variables related to workforce factor and the resultshow that the most important variable negatively affecting the productivity is lack oflabor experience, followed by labor disloyalty, labor dissatisfaction, misunderstandingamong labor, lack of competition, increase in laborer age, labor absenteeism, and laborpersonal problem Duryev et al (2011) also identify 8 sub-factors affect to laborproductivity with level of impact is descending as level of skill and experience of theworkforce, motivation/commitment, level of familiarity with current job andconditions, workforce absenteeism, level of staff turnover and health of the workforce.These variables above also is supported by Kazaz et al (2008), Homyun Jang et al(2009), Makulsawatudom et al (2001), and Soekiman et al (2010) Base on theprevious research above this study has been refined and collected 8 sub-factors related

to the main factor of workforce and stated a hypothesis as following:

Hypothesis H 1 : There is a positive impact of workforce factor on the fluctuation of

labor productivity

Hypothesis H1 is presented in Figure 2.5

Figure 2.5: Workforce factor and LPF

Labor productivity fluctuation

Workforce

- Lack of skill and experience of the workers

- Lack of empowerment

- High workforce absenteeism

- High workforce turnover

- Low labour morale/commitment

- Increase of labourer age

- Poor health of the workers

- Poor relations among workers

H1+

2.4.2 Factor related to management team

Enshasi et al (2007), Homyun Jang et al (2009), Ailabouni et al (2006) identified thecore elements effect to Labor Productivity, including: bad leadership skill, poorrelations between labor and superintendents, and lack of labor surveillance Base onthat previous research, this study stated a hypothesis related to management team factor

as following:

Hypothesis H 2 : There is a positive impact of management team factor on the

fluctuation of labor productivity

Hypothesis H2 is presented in Figure 2.6

Figure 2.6: Management team factor and LPF 2.4.3 Factor related to motivation

Motivation is extremely important Non motivated employees can have severalnegative effects on your business These include friction on the job, substandard output

in quality, a high turnover of employees, absenteeism, tardiness, and many of thedisciplinary problems that you wish to avoid Enshasi et al (2007) identified 6 sub-factors related to motivation factor These sub-factors were placed in descending orderaccording to their importance: payment delay, lack of financial motivation system, lack

of labor recognition programs, non-provision of transport means, lack of places foreating and relaxation and lack of training sessions Durdyev et al (2011) also identified

3 sub-factor related to motivation factors, that are reworks, under-valued work/poor,

Management team

- Bad leadership skill

- Poor relations between labor and superintendents

- Lack of labor surveillance

- Lack of periodic meeting with labor

H2+

Labor productivity fluctuation

late payment It also supported by the research Kazaz et al(2008) such as: on-timepayment, amount of pay, working in social insurance, incentive payments and financialrewards, discontinuity of work and union membership Base on the previous researchabove this study have been refined and collected 7 sub-factors related to the mainfactor of motivation and stated a hypothesis as following.

Hypothesis H 3 : There is a positive impact of motivation factor on the fluctuation of

labor productivity

Hypothesis H3 is presented in Figure 2.7

Figure 2.7: Motivation factor and LPF 2.4.4 Factor related to Schedule Compression

In a typical construction project, a contractor may often find that the time normallyexpected to perform the work has been severely reduced The reduction of timeavailable to complete a project is commonly known throughout the constructionindustry as schedule compression Schedule compression is a problem because itnegatively impacts labor productivity in various ways, and it becomes a source ofdispute between the owners and contractors Base of the previous research of Kazaz et

al (2008), Durdyev et al (2011), Enshasi et al (2007), Ailabouni et al (2006), Soekiman

Motivation

- Lack of labor recognition program

- Little or no financial rewards

- Late payment

- Low amount of pay

- Little or no welfare

- Poor condition of camping

- Lack of place for eating and relaxation

H3+

Labor productivity fluctuation

et al (2010), and Homyun Jang et al (2009) this study have been refined and collected 5sub-factors related to the main factor of Schedule Compression and stated a hypothesis

as following:

Hypothesis H 4 : There is a positive impact of schedule compression factor on the

fluctuation of labor productivity

Hypothesis H4 is presented in Figure 2.8

Figure 2.8: Schedule compression factor and LPF 2.4.5 Factor related to Material/Equipment

Material and Equipment are very important, as without them work cannot be doneprogressively or to the required quality Makulsawatudom et al (2001) indentified thatlack of material and lack of equipment were highlight as the most critical factoraffecting to productivity because of material are essential for the construction process.Kazaz et al (2008) stated that lack of material is a universal problem and has asignificant degrading effect on site productivity for both developed and developingcountries Improper material planning and on site transportation difficulties areamongst the resource of lack of material The case appeared as a result of materialshortage and it likely the most considerable part of material management practicesrelated with labor performance When adequate supply of material is not possible,workers try not to exhaust their current stockpile of supplies, so they may slow down

Schedule compression

- Working 7 days per week without taking a holiday

- Frequency of working overtime

their pace or output in anticipation of a delivery, resulting in idle times and costoverruns.

Enshassi et al identified 3 sub-factors related to material/equipment factor, includingmaterial shortage, tool and equipment shortages and unsuitability of material storagelocation Homyun Jang et al (2009) also suggested 11 sub-factors related tomaterial/equipment, they are equipment condition, number of equipment, equipmentservice time, equipment transport environment, equipment procurement, equipmentperformance, material condition, material quantity, materials transport environment,material procurement and material applicability These sub-factors about alsosupported by Henry et al (2007), Ailabouni et al (2006) and Soekiman et al (2010).Base on the previous research above and adapt with Vietnamese construction projectcondition, this study have been refined and collected 6 sub-factors related to the mainfactor of material/equipment and stated a hypothesis as following

Hypothesis H 5 : There is a positive impact of material/equipment factor on the

fluctuation of labor productivity

Hypothesis H5 is presented in Figure 2.9

Figure 2.9: Material/Equipment factor and LPF

Material/Equipment

- Material shortages

- Low quality of raw materials

- Unsuitable material storage location

- Lost time to find material because of poor arrangement

- Equipment and tools shortages

- Poor condition of equipment and tools

H5+

Labor productivity fluctuation

2.4.6 Factor related to Supervision

To follow-up and supervise labour while working is a vital aspect of any organizationbecause both it can result in extensions of project time and cost, and the quality on site

is controlled through inspection of the work completed by the gang To improve thesupervision work, it is necessary to identify the factor affect on it Enshasi et al (2007)stated that all supervision factors have a high impact on productivity, and were rankedaccording to their importance as follows: drawings and specifications alteration duringexecution; inspection delay; rework; and supervisors’ absenteeism In the study ofHenry et al (2007) also indicated the factor related to supervision group like:incompetent supervisor, poor construction method, frequency rework, incompletedrawing and design change, design complexity Makulsawadom et al (2001)indentified 7 sub-factors, including incomplete drawing, inspection delay, incompetentsupervisor, long instruction time, changing order, rework The sub-factors related tosupervision factor also supported by Kazaz et al (2008) ), Durdyev et al (2011),Homyun Jang et al (2009), Ailabouni et al (2006) Based on these previous research,and after considering with Vietnamese construction project condition, this study havebeen refined and collected 8 sub-factors related to the main factor of supervision andstated a hypothesis as following

Hypothesis H 6 : There is a positive impact of supervision factor on the fluctuation of

labor productivity

Hypothesis H6 is presented in Figure 2.10

Figure 2.10: Supervision factor and LPF

2.4.7 Factor related to Safety

Safety is very important aspects of construction projects which are the most hazardousendeavors have many work-related injuries and accidents Accordingly, safety factorsmust be considered in project lifecycle from beginning of a project to its end Toimprove project safety, the definition of safety factors and determination of theirimportance are necessary In some of the previous researches several safety factors areintroduced Enshasi et al (2007) identified 7 factors under the safety group have beenplaced in descending order as follows: accidents, violation of safety precautions,insufficient lighting, bad ventilation, working at high places, unemployment of safetyofficer on the construction site, and noise This study also base on the past research ofDurdyev, Henry et al (2007), Homyun Jang et al (2009), and Makulsalsawadom et al(2001) and after considering with Vietnamese construction project condition, this studyhave been refined and collected 8 sub-factors related to the main factor of saftey andstated a hypothesis as following

Hypothesis H 7 : There is a positive impact of safety factor on the fluctuation of labor

Safety factor is presented in Figure 2.11.

Figure 2.11: Safety factor and LPF 2.5 Project characteristic

According to Nitithamyong et al (2011), the project characteristic group includesproject location, type of owner, type of contract, type of project, project size, projectcost, project duration, complexity related to design and engineering, complexity related

to construction task However, in the condition of Vietnam, some factors above could

be not easy to collect information form attendant, therefore this study will onlyconsider such factors: Type of owner, type of project and project value The projectcharacteristics and labor productivity fluctuation of the project are stated in hypothesis

- Unsafe working conditions

- Inadequate safety plan

- Lack of labor safety (clothes safety, …)

H7+

Labor productivity fluctuation

2.6 Conceptual framework

The conceptual framework is presented in Figure 2.12 and consisting of 8 hypothesisesfrom H1 to H8, in there, the group factors correspond with H1 to H7 are independent andquantitative variables, it affects directly on labour productivity fluctuation, a dependentvariable Besides, Labour productivity fluctuation will also be different on projectcharacteristics (Project Type, Project Owner and Project Budget) and it is stated in H8

Figure 2.12: Conceptual framework

In summary, based on the past studies and the theoretical concepts The conceptualframeworks was constructed with seven independent factors including workforce,management team, motivation, schedule compression, material/equipment, supervision,and safety positive impact on the dependent factor of labour productivity fluctuation.

CHAPTER 3: METHODOLOGY

The purpose of this chapter is to present the research process, methods using inresearch, sampling design and data collection method

3.1 Research process.

The research process consists of 8 steps illustrate in Figure 3.1

Figure 3.1: Research process

Define Research Problem

Data Analysis Reliability Analysis

Validity Analysis

Hypothesis Testing

Research Design

Plan for Data Analysis

Data needs & Source Measurement Scales

Sampling Design

3.2 Sampling design

3.2.1 Population

The targeted interviewees in this research will be the person work for constructioncompanies and took part at least one construction project in HCMC or surrounding ofHCMC The respondents also are the people who work as clients, contractors,operational director, project manager, project coordinator, construction manager, sitemanager, site engineer, foreman, superintendent and supervisor

3.2.2 Sample size

There are two sampling approaches that are probability and non-probability samplingbut “There is no guarantee that the results obtained with a probability sample will bemore accurate than those obtained with non-probability sample, what the former allowsthe researcher to do is measure the amount of sampling error likely to occur in his/hersample This provides a measure of the accuracy of the sample result With non-probability sampling no such error measures exists.” (Kinnear and Taylor, 1987).Hair et al (1995) stated that “it is generally agreed that the minimum sample forappropriate use for statistical analysis is equal to or greater than 5 time of independentvariables, but not less than 100”

n 100 and n 5k (where k is equal to number of variables)

This study has 46 variables, so the minimum size for this research is

n = 5x46 = 230

Otherwise, Tabachnick & Fidell (2001) illustrated the minimum sample size for theMultiple Regression should be