Project Management Institute

Effects of management on productivity in construction

Wagner, Hohns, Inglis, Inc.

Introduction – Purpose of Paper

Over the past fifteen years, the author has been vitally interested and concerned on a daily basis with the effects that change and environment have on construction productivity. As an experienced engineer who has spent much time managing major projects and also analyzing and solving construction problems and disputes on more than $3.5 billion worth of construction, the author has been constantly called upon to assess what influence a change in construction sequence, plans, etc. had or might have had on the otherwise unaffected productivity of construction workers.

Few sources exist that set forth any statement of productivity rate change for any cause, and there is a severe need to share the knowledge possessed by those whose experiences have provided a base broad enough to quantify the productivity change to be anticipated.

Sources of Background for Measuring Productivity Factors

The main published work on productivity in construction is found in papers and books by Dr. Clark Ogelsby and Dr. Boyd Paulson of Stanford Univesity and Dr. John Borcherding of the University of Texas. The author has been sharing concepts on improving productivity in a number of seminars which have been held in Toronto, Canada; Newport Beach, California; Houston, Texas; and Washington, DC. Panelists have included Oglesby, Brocherding, the author, Richard McElmoyle, and V.W. Jernigan of Daniel International, Greg Howell of Time Lapse, Inc., Lee Knack of Morrison Knudsen, and Richard Willich of the Dow Institute.

The seminars were designed and succeeded to provoke attendee participation to illustrate how to apply work measurement techniques and to use the behavioral science stepping stones set forth in other industry productivity studies by Herzberg, Maslow, McGregor, McKensie and others to today’s super construction (i.e. large scale) projects. Brocherding, particularly in his work has been able to research and demonstrate productivity influence when management moves to put appropriate policies in effect to motivate workers.

The University of Texas has been working with Daniel and others and they have demonstated greater results from properly motivated workers. Some of their findings/results are now compiled and provide further and unique documentation-insight not often found in this elusive area of study. Constant productivity studies are also being made by people like Marjatta Strandall at Pacific Power and Light and Peter Cockshaw, an acknowledged labor expert who has long been interested in this subject.

Since 1965, the author and his firm have scheduled and monitored progress on over 1500 construction projects, overseen (as Project Managers) in excess of $100,000,000 in work now in place, and served as an expert witness or provided expert evaluation or opinion for over 1000 troubled projects. The findings of this paper are based largely on these first-hand experiences acquired since the mid 1960s.

My findings have been correlated in the following table. The categories of performance problems are set forth and to the right are listed the ranges of increase of cost I have found applicable. The right hand column is my judgement of the average increase in costs which may be incurred if the condition cited is experienced. One hundred (100) is the base cost. One hundred and five represents 5% more than base, etc.

The inefficienceis cited will generally increase as more difficulties are experienced to a point where the project problems become so overwhelming, significant changes are finally made to bring some degree of normalcy and cost control to the program.

If this corrective action isn’t taken, the project, nevertheless, somehow gets done, inefficiency piling on top of inefficiency and costs escalating to the bitter end. Even sour jobs do eventually end!

In reviewing the following table, keep in mind that the inefficiency factors may or may not be cumulative depending upon the circumstances surrounding each individual construction job.

With two exceptions the author has not witnessed a loss of more than 3x the labor estimate figure on any major contract. Indeed it is rare that labor doubles in anticipated costs. Establishing an equation for a cumulative loss total is particularly difficult, because on a larger project (e.g. over $1,000,000 in labor) there are so many intrinsic, small, yet costly labor activities going on throughout the entire site that many of these are missed in the observationevalation process.

The author knows of no formula to calculate the costs which result from management problems. By experience, one knows they occur and they can be measured; indeed, through judgement they can be predicted by the experienced professional who has a background like the author’s. Few serious studies have been made to trace the construction workers’ ways, an incredulous statement for such a huge segment of our economy.



Experience over the years shows conclusively the construction worker is a highly sensitive proud artisan easily discouraged and highly alert to poor leadership or indecision on design and job site or home office management.

Management must be quick to realize the workers’ needs or rapid cost increase will occur. The ultimate expression of management is the work product combined with the attitude of the involved employees.

The behavioral sciences are only now beginning to help us understand what makes good foremen, good superintendents, good project managers, good vice presidents, but it is a start. Motivation research —as applied to the construction industry —is still in its infancy compared to other sectors of our economy and national life.

What we have learned to date is also very difficult to apply in everyday use. Ingrained bad habits; the fragmented nature of the construction industry; the technical complexities of the building process and a lack of central source of construction productivity information are only some of the factors with which we must contend. Even the definition of productivity has yet to be universally established.

We have found, however, that people fear about losing thier jobs; want to please the boss; consider the boss unapproachable; consider management irrational and not to be trusted; will do the task assigned without complaint unitl they believe they are being used or misused. The challenge of job management of field forces is so difficult that people use their position and the promotions in this industry to get away from the field.

However high level attention to the field must become commonplace, indeed the norm, if construction costs are to be controlled and reasonable profits anticipated. It is time we began to think about the people in our business lives.

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