IMPROVING PRODUCTIVITY IN THE CONSTRUCTION INDUSTRY THROUGH HUMAN RESOURCES DEVELOPMENT

CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

Human Resource Management (HRM) is of strategic importance in all organizations. It contributes to the success of the organization and creates competitive advantage for the organization (Rana & Rastogi, 2010). The way HRM practices and policies take shape also affects the employee’s experiences of work and the employment relationship (Sambasivan, 2007). HRM is therefore important in any organization. The construction company is no different in this regard. However, the researcher suggests that specific features of the construction company create specific challenges for HRM in that context, which are not widely recognized in the general management, HRM or project management (PM) literature (Thomas, 2012).

Construction is a process that consists of the building or assembling of an infrastructure. Large scale construction is a feat of multi-tasking. Normally the job is managed by the project manager who acts as the representative of the client/developer (Hills et al., 2008) while the construction manager is tasked with the role of supervising; the construction works, design engineer, construction engineer or project architect (Rojas & Aramvareekul, 2013). For the success of construction of any sustainable development project, many aspects must be taken into consideration, inclusive of planning and management, such as human resource, safety and health, construction delays, the designs of architecture and engineering, material availability and quality; the clients need, and financial or economic limitations.

In this age of rapid growth of globalization, many construction firms focus on the effective use of Human Resource Management (HRM) practices to gain competitive advantage to achieve the organization’s objectives and ensure optimal performances among the employees. Construction industry is an important part of the economy in many countries and often seen as a driver of economic growth especially in developing countries. Typically, construction industry contributes to 11% of Gross Domestic Product (GDP) in most developing countries(RoK, 2003). The Nigerian construction industry is one of the most important sectors in the country’s economy whose level of activity is an indicator of the general economic performance of the country.

The nature of construction industry, presents challenges and peculiar requirements in the developing nations (Ofori 1999). In order to check on performance and productivity, some measures in the construction industry have to be taken at various stages of socio-economic development. Many countries have set up special agencies to monitor the operations in this industry and harness their potential for improvement, although they have different objectives, responsibilities and levels of authority. The Construction Industry Council, for example in the UK, is a board which was initiated by the players in the construction industry to represent and support these players at national level. However, in developing countries like Nigeria the counterpart agencies like National Construction Authority and the National Construction Council of Tanzania (Miles and Neale, 1991) are government agencies controlled and managed by the government. The agencies in developing nations therefore are restricted in their mandate rather than as assigned by the government authorities. In doing so, they are likely to exclude key players in the construction industry especially the masons and casual labourers.

Productivity happens to be a significant aspect of construction industry that may be used as an index for efficiency of production. Productivity is defined as a relationship between output produced by a system and quantities of input factors utilized by the system to yield that output (Mbiti, 2008). Productivity is considered one of the most outstanding factors influencing timely completion of a project and cost control in all construction projects. Efficient management of construction resources can lead to higher productivity that can help to achieve cost and time savings (Sebastian & Raghavan, 2015).

Productivity remains an intriguing subject and a dominant issue in the construction industry, promising cost savings and efficient usage of resources. However, Rundle (1997) identified construction productivity as a cause of great concern. Ghate and Minde, (2016) concurred with Rundle’s views in observing that construction productivity seems to have declined. On the other hand, Lawal (2008) reported that in Nigeria, construction workers in the public service have almost zero productivity. Kothari (2004) identified poor productivity of craftsmen as one of the most daunting problems confronting the construction industry especially in developing countries.

Olomolaiye et al (1998) briefly studied labour productivity on construction sites in Nigeria. Their study concluded that there was a need for establishing output figures on various construction sites through time study techniques. It was concluded that method studies and research results should be disseminated not only to large firms but also to small firms so the most productive working methods (or best practices) could be adopted by operatives, resulting in increased output without necessarily increasing physical effort. Lim et al (1995) studied factors affecting productivity in the construction industry in Singapore. Their findings indicated that the most important problems affecting productivity were: difficulty with recruitment of supervisors; difficulty with recruitment of workers; high rate of labour turnover; absenteeism from the work site; and communication problems with foreign workers. Olomolaiye et al (1996) studied factors affecting productivity of craftsmen in Indonesia, with their findings indicating craftsmen in Indonesia spent 75 % of their time working productively. Five specific productivity problems were identified: ie lack of materials; rework; absenteeism; lack of equipment; and tools. Wachira (1999) did a study in Kenya construction firms and found that that labour productivity is affected by many factors including, experience of the workforce; motivation; organisation of the work; type and condition of tools and equipment; and continual monitoring of performance. Tahir et al., (2015) observed that a lack of skilled labourers’ low amount of pay, working seven days per week without taking a holiday, drawings and specifications alteration during execution of project and poor relations between labour and supervisors were the key issues. In another study, Lamka (2015) identified three major factors that affect labour productivity in masonry and painting namely; lack of training/skills, work planning & scheduling and incompetent supervisors. A critical look at these factors reveals that they are hinged on the human resource management practices. As summed up by Sebastian and Raghavan (2015), lack of proper managerial efficiency is the basic reason for all these issues. Pardo and Fuentes (2003) stated that 15% of productivity loss occurs due to resource management and 25% loss due to working environment. Ghoddousi (2015) revealed that Chief Executive Officers (CEOs) regard major aspects of human resources management as the most effective factors to increase productivity in construction projects. Monetary features of human resource management such as amount, timeliness of payments and remuneration, as well as intrinsic aspects e.g. satisfaction, ethical behaviour, promotion, individual relationships and job security were among the factors perceived by CEOs as the most influential determinant of productivity in road projects in Iran (Makulsawatudom, 2001).

Although many studies have strived to explain the effects of human resource management practices on the performance of employees in the construction companies, a few have carried out an empirical study on the effect of human resource management practices on productivity and none has looked at the moderating effect of employee engagement on labour productivity in the construction industry in Uyo, Nigeria. This research was, therefore, to fill the gap by carrying out an empirical study to establish the effect of human resource management practices on labour productivity. Mbiti (2008) in his study in Kenya found that, there is an abundance supply of semi-skilled and unskilled labour which needs to be utilized. In order to provide social and economic advantage to the population, the construction industry has been under pressure to embrace best practices as one way of creating job opportunities for operatives in the job market. Construction process is an important means of expanding the job market in the economy and therefore every effort should be made to improve labor productivity. An improvement in labor productivity will lead to enhancing project productivity and making it attractive to project sponsors.

The labor productivity on site might be affected negatively by a variety of factors which include; extraneous reasons like adverse effects of the weather, NCA, NEMA, local authorities, stakeholders and legislation. Masu (2006) argues that Nigeria being a developing country is not an exception to the trends in other countries which are at crossroads with the building teams due to the later not delivering the projects within the stipulated time. Delays on site has caused losses on project’s profit to the contractor; increased cost to the client and strained the working relationship between the parties in a project. This has been brought about by the lack of adequate information on labor productivity rates in the construction industry in Nigeria(Wachira, 1999). The inaccurate determination of activity duration has in most cases led to the incorrect estimation of contract periods. Delays in completion of projects in the construction industry are indicators of productivity problems and hence a big challenge facing the construction industry. An improved labor productivity is one of the key determinants of projects prediction and therefore an important ingredient of construction delivery.

1.2  STATEMENT OF THE PROBLEM

 Unlike other industries, construction industry is mainly project-based. The construction projects have the general characteristics of limited budget, schedule, and quality standards with a series of complex and interrelated activities. According to Burke (2010), it requires the cooperation of all project participants that includes clients, directors, designers, contractors, constructors, project managers, project team and consultants. There are many human resource issues that will lead to poor performance of construction projects such as poor project work design and structure, shortage of qualified skilled employees, changing workforce demography, a high rate of employee turnover and high rate of burnout among construction workers (Levy, 2000).

The shortage of qualified skilled employees is also one of the common issues among the construction firms. According to Borcherding (2009), there is a “disturbing trend” in construction in which there is a “growing shortage of skilled workers and experienced managers”. He further claimed that “the scarcity of both skilled trades-people and experienced managers will place more emphasis on the need to increase the quality and quantity of training in order to produce more effective and productive workers. Therefore, due to the lack of proper screening process, selection methods and poor recruitment procedure will affect badly on the success rate of the construction projects and therefore lead to low productivity and growth of the construction firm (Enshassi, 2007).

In the construction industry, the labor market is always changing and modifying due to the reduction of qualified workers and also due to the changing demographics of the workforce. One of the factors is due to the aging of construction workforce that is growing older over the long term. Therefore, human resource management has become more important to the construction industry to overcome the changing workforce demographics (Heizer & Render, 1990).

There is undeniably a high rate of employee turnover in the construction industry nowadays. According to Horner (2011) the two major factors that cause employee termination is “perceived ease of movement” and “perceived desirability” that related to employee’s career satisfaction. Employee voluntary and involuntary termination are mainly due to poor job performance, absenteeism or violation of workplace policies, firing or discharge, or leaving the company of her own volition, relocating to a new area or other reasons. The worst consequences of the high employee turnover are the loss of talent, loss of productivity, waste of time and cost to train a replacement. It is estimated that the cost is almost twice of an employee’s salary to find and train a replacement, and might damage morale among existing employees.

Despite the concerns on lack of adequate productivity information, little research attention and documentation has been undertaken on construction sites to establish labor productivity data for consideration in project planning, costing and budgeting in the construction industry in Nigeria. Therefore, this study seeks to assess the effect of human resource management practices on productivity in the construction industries in Uyo.

1.3 OBJECTIVES OF THE STUDY

The general aim of this study is to evaluate improving productivity in the construction industry through human resource development. The specific objectives are;

1.        Determine whether productivity been enhanced through efficient human resources management in the construction industry.

2.        Ascertain the extent to which human resources management impacted on employees’ performance.

3.        Determine whether effective human resources management has any impact on the achievement of the company’s objective.

1.4 RESEARCH HYPOTHESES

The following statement will be validated in the course of this study;

H01: Productivity have not been enhanced through efficient human resources management in the construction industry.

H02: The extent to which human resources management impacted on employees’ performance is low in the company.

H03: Effective human resources management have no impact on the achievement of the company’s objective.

1.6 SIGNIFICANCE OF THE STUDY

This research serves as reference for construction firms. The findings led to establishment of appropriate human resource management practices that could increase labour productivity in the construction industries. The results of the investigation could also be used as a useful benchmark tool for other contractors who may not have been adhering to the set standards and best practices.

A competitive advantage should be established as a result of implementing the findings of the study. Human resource management practices contribute significantly to creating a competitive advantage by creating human resources, which are unique and difficult to replicate, therefore, contributing significantly to labour productivity. Human resources are the most important asset of an organisation but very few are able to fully harness its potential.

The findings from the study will be valuable in the construction industry as they prioritize the factors that are associated with effective labor productivity on construction site. This would assist the planning for the resources to be used in the execution of the work and thereby improve labor productivity. The findings will further contribute to the pool of knowledge available in this area of construction project management and would form a useful archival material for reference to other researchers and institutional libraries which will be vital to the present and future scholars in regard to labor productivity.

A body of knowledge on effect of human resource management practices and productivity has been created, since few pieces of research have been carried out on this subject. The knowledge shall be used by scholars for teaching purposes; contractors can utilize it to increase their labour productivity, leading to reduced costs and number of craftsmen in masonry work, in order to create a conducive working environment. Improved labour productivity in construction industry will definitely lead to timely completion of works within project time frame and budget. The outcome of this investigation, shall hopefully contribute to high standards of workmanship as a result of incorporating efficient HRM practices into management of employees in construction companies and sites.

1.6 SCOPE OF THE STUDY

The study looks into improving productivity in the construction industry through human resource development. The study further delve into determining whether productivity been enhanced through efficient human resources management in the construction industry, ascertaining the extent to which human resources management impacted on employees’ performance, and determining whether effective human resources management has any impact on the achievement of the company’s objective.

Thus, this study will be carried out in Sintax Construction industry, Anambra State.

1.7. LIMITATIONS OF THE STUDY

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents.

In addition, there was the element of researcher bias. Here, the researcher possessed some biases that may have been reflected in the way the data was collected, the type of people interviewed or sampled, and how the data gathered was interpreted thereafter. The potential for all this to influence the findings and conclusions could not be downplayed. 

More so, the findings of this study are limited to the sample population in the study area, hence they may not be suitable for use in comparison to other construction companies in the world.

1.8 DEFINITION OF TERM

Productivity: This is the effectiveness of productive effort, especially in industry.

Human Resource Management: This is the strategic approach to the effective and efficient management of people in a company or organization such that they help their business gain a competitive advantage. It is designed to maximize employee performance in service of an employer's strategic objectives.