UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS MASTER OF BUSINESS (Honours) Ho Chi Minh City - 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. CAO HAO THI Ho Chi Minh City - 2012 i ACKNOWLEDGMETS Firstly, I would like to express my deepest appreciation to my supervisor Dr. Cao Hao Thi for his professional guidance, valuable advice, continuous encouragement, and motivated support that made this thesis possible. I would like to extend deep senses of gratitude to Prof. Nguyen Dinh Tho and lecturers who have taught and transferred me valuable knowledge and experience during the period 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 useful material, response and experience to conducting this study. I would like to express my grateful thanks to my friends and all the construction company in Vietnam who participated in filling the questionnaires and provided the valuable information for this study. Personally, I wish to express my deep gratitude to my parents, my wife, sister and brother for their spiritual support and encouragement during the time of study. Ho Chi Minh City, Vietnam, 12 Dec. 12 Bui Trung Kien ii ABSTRACT Productivity has an important role to help construction companies to be competitive, achieve set goals, meet stakeholder and value propositions. The objectives of this research are to identify the factors affect to the Labor Productivity Fluctuation in construction project in Vietnam, to access the impact strength of influenced factors on the fluctuation of labor productivity and to suggest recommendations to reduce the fluctuation of labor productivity. The objective of this study have been achieved through study 233 questionnaires and the results of analysis of 46 variables considered in questionnaire show that, there are five main factors positively affect to Labor Productivity Fluctuation in construction project. They are Supervision factor, Motivation factor, Workforce factor, Material/Equipment factor and Schedule factor. After conducting Multiple Linear Regression and ANOVA analysis, the model of study have been indentified which could explains 68.7 % of the total variance in Labor Productivity Fluctuation and ANOVA testing result also shows that there are significant different among project characteristic group on LPF. The results of this study recommend that construction companies have to conduct labour productivity study in their project to reduce Labour Productivity Fluctuation. It is important to have training program to increase labour skill, improve labor commitment and the relationship among worker by increasing labor benefit and team building program. It also suggested that the planning software should be used in the project to have a good planning work to reduce the frequency of working overtime and make the labor more productivity. iii 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 iv 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 v 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 vi 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 vii 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 viii 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 [...]... topic Factors Affecting the Fluctuation 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 labor productivity of construction projects - To assess the impact strength of these factors on the fluctuation of labor productivity - To analysis the. .. levels of productivity can be attained However, productivity, or lack of it, is perhaps one of the main problems confronting the construction industry, the construction firm and the construction project As a consequence of the importance of the construction industry, the nature of construction projects and the available economic resources, more emphasis should be given to improving productivity Productivity... increase the 2 competitive advantages of the construction company in Vietnam toward foreign construction 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 To answers these questions, it necessary to conduct the. .. propositions and maintain strategic and financial health At the industry level, productivity enables the sector to maintain satisfied clientele, attract investment, remain viable and contribute to the economic growth and well-being of the nation (Durdyev and Mbachu, 2011) Understanding critical factors affecting the fluctuation of labor productivity is very necessary to improve the efficient of construction. .. elements (inputs) are involved in the production of output This makes the definition of input more complex than that of output To ease this problem of defining inputs, it is common a practice to classify inputs into labor (human resources), capital (physical and financial assets), and material Again, in an attempt to circumvent the difficulty of defining inputs, productivity is sometimes defined as goods... in to the projects in 7 terms of manpower, material, machinery or tools and the result you get out of the project Productivity has to do with the efficiency of production Making a site more productive means getting more output for less cost in time, Productivity covers every activity that goes into completing the construction site works, from the planning state to the final site clearing, if the contractor... ‘outputs’ and ‘inputs’ Unfortunately, definition of either output or input or both may sometimes pose more difficulty to the understanding of what productivity is For output, it is in the form of goods if visible and services if invisible Input on the other hand is less easily defined Since production (creation of goods and services) is a team effort thereby 8 making the demand for inputs to be interdependent,... planed labor productivity L>0 : Lost of labor productivity 10 2.2.5 Construction productivity Productivity in construction is often broadly defined as output per labor hour Since labor constitutes a large part of the construction cost and the quantity of labor hours in performing a task in construction is more susceptible to the influence of management than are materials or capital, this productivity. .. hour In the latter case, labor productivity is identified with value of construction (in constant dollars) per labor hour The value of construction in this regard is not measured by the benefit of constructed facilities, but by construction cost Labor productivity measured in this way requires considerable care in interpretation For example, wage rates in construction have been declining in the US during... Labor productivity = volume measure of output / measure of input use The volume measure of output reflects the goods and services produced by the workforce 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) The measure of input use reflects the time, effort and skills of the workforce Labor input . UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS MASTER OF BUSINESS. Chi Minh City - 2012 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS ID:. identify factors affecting to the fluctuation between real and planed labor productivity of construction projects. - To assess the impact strength of these factors on the fluctuation of labor productivity. -