ADDIS ABABA UNIVERSITY

(EiABC)

Assessment on factor affecting labour productivity in Addis Ababa: the

case of mixed use building.

Research proposal

Members

1. Esubalew Shiferaw ETE/5194/05

2. Lemlem Mamo ETE/6258/04

3. Rehima Muhajir ETE/2219/06

Advisor: - Ins. Ezra Kassa

Date: - March 22, 2019 G.C

 Table of content

1. Introduction ------------------------------------------------------------------------------------------ 1

1.1 Research background --------------------------------------------------------------------------- 2

1.2 Problem statement ----------------------------------------------------------------------------- 3

1.3 Research objectives ----------------------------------------------------------------------------- 5

1.4 Significance of the study ---------------------------------------------------------------------- 7

1.5 Scope of the study -------------------------------------------------------------------------------- 7

1.6 Research questions ----------------------------------------------------------------------------- 8

2. Literature review ------------------------------------------------------------------------------------- 9

3. Research methodology ----------------------------------------------------------------------------- 17

3.1 Research approach ------------------------------------------------------------------------------ 17

3.2 Research area ------------------------------------------------------------------------------------ 17

3.3 Research design --------------------------------------------------------------------------------- 17

3.4 Sample size and sampling method ----------------------------------------------------------- 17

3.5 Method of data collection --------------------------------------------------------------------- 17

4. Budget and schedule -------------------------------------------------------------------------------- 19

5. References -------------------------------------------------------------------------------------------- 20
 1. Introduction
Construction is a key sector of the national economy for countries all around the world, as
traditionally it took up a big portion in nation’s total employment and its significant
contribution to a nation’s revenue as a whole. However, until today, construction industries
are still facing number of problems regarding the low productivity, poor safety and
insufficient quality.

Productivity is the one of the most important factor that affects overall performance of any
small or medium or large construction industry. There are number of factors that directly
affect the productivity of labour, thus it is important for any organization to study and
identify those factors and take an appropriate action for improving the labour productivity.
At the micro level, if we improved productivity, ultimately it reduces or decreases the unit
cost of project and gives overall best performance of project.

There are number of activities involved in the construction industry. Thus the effective use
and proper management regarding labour is very important in construction operations
without which those activities may not be possible.
 1.1. Research background
Today the world is full of competition and countries of the world are attempting to find means of
keeping their well-being in the global market. Improving the Productivity of an organization is
one of the enablers of an organization to be competitive, achieve set goals, meet stakeholder
value propositions and maintain strategic and financial health.

Labor productivity has a significant impact on time, cost, and quality of a construction project.
Especially the competitive environment of the construction industry forces construction
companies to increase their labor productivity values in order to keep their positions in the
industry. In this respect, identification and evaluation of factors that affect the labor productivity
becomes a crucial issue for construction industry practitioners.

Labour Productivity remains an interesting subject and a dominant issue in the construction
sector, promising cost savings and efficient usage of resources. Labour Productivity is one of the
most important issues in both developed and developing countries. The developed countries are
aware of the importance of economic growth and social welfare. The developing countries which
face unemployment problems, inflation and resource scarcity seek to utilize resources and in
such a way to achieve economic growth and improve citizens’ lives.

Labour Productivity is an issue of particular importance to building projects located in Addis

Ababa, as it is considered a newly-developed area, and a huge number of projects have been
planned for the near future. The aim of this research is to identify factors affecting labour
productivity within mixed use building projects, and to rank these factors according to their
relative importance from a contractor’s viewpoint.
 1.2. Problem statement
In the construction industry productivity loss is one of the greatest and severe problems. Present
construction contracts lack enough to classify recompense for productivity loss due to field
factors (Construction Industry Institute [CII], 2000; National Electrical Contractors Association
[NECA], 1989). Of various project-costs components such as labors materials and equipment’s,
labor component is considered the most risk. Whereas others components (equipment and
material) are determined by the market price and price and are, consequently, beyond the
influence of project management. Labor cost in construction industry is estimated to be about
33% - 50% of the entire project cost (language Hanna et al., 2005). Because labor is more variable
and unpredictable than other project-cost components, it becomes necessary to understand the
effects of different factors on labor productivity. An increase in productivity can reduce the labor
cost in a direct proportion. It can either benefit or reduce a project’s profit, making it of vital
interest to the construction industry for its success (Hanna et al., 2005).

The Canadian construction industry is vitally important to the nation’s economy. Construction
labour productivity (CLP) deals with the efficiency of crews in the complex process of converting
inputs (labour, material, equipment, etc.) to outputs (project products) in various construction
project contexts. Based on the possibilities for inputs and outputs, construction productivity can
be computed at the economic, project, or activity level (Thomas et al. 1990). Canadian CLP at the
economic level based on the indexed value from 1997 to 2012 with seasonal adjustment for
inflation shows a declining trend (CANSIM 2013). This decline in CLP together with a national
labour supply shortage threatens the future of investment in Canadian construction (CSC 2013).
The CLP has a significant impact on project costs, as on-site labour costs contribute between one
third and one half of overall project costs (Fayek 2011).

In most construction sites, best possible performance are unachievable with poor productivity
resulting in time overrun and consequently cost escalation of the projects. According to Eldin and
Egger (1990), construction productivity has been on a steady decline. The problem of low
productivity is not limited to Nigeria. Proverbs et al. (1999) observed that construction
productivity in the United Kingdom was lower than in many other European countries despite the
encouraging signs observed in the 1980s boom. There is nothing as dangerous to an economy as a
decrease in productivities because it creates inflationary pressure, social conflict and mutual
suspicion (Drucker, 1980).
Mbachu and Olaoye (1999) opined that the Nigerian construction industry is bedevilled by projects
that are completed much longer than mutually planned. This was buttressed by Odusami and
Olusanya (2000) who concluded that most projects executed in the Lagos metropolis experienced
an average time overrun of 51% on their planned duration. Volume of articles have been written in
an attempt to eliminate or minimize construction time overrun along with its debilitating effects on
project owners, contractors and consultants, but the issue remains unabated. Time overrun results
in the growth of adversarial relationships, litigation, arbitration, cash flow problems and a general
feeling of apprehension between project participants. Numerous studies relating to causes of time
or cost overruns have been conducted worldwide in developed countries such as the USA and UK
(Xiao & Proverbs,2002), and developing countries such as Nigeria (Okpala & Aniekwu, 1988;
Mansfield et al.,1994; Dlakwa & Culpin, 1990), Saudi Arabia (Assaf et al., 1995), Thailand
(Ogunlana et al.1996), Malaysia (Wang, 1992) and Jordan (Al-Momani, 2000).

In India, one of the greatest challenging faced by the construction industry is to attract
and to attain skilled labour. Low productivity among the labour will give impacts to the
construction industry such as cost overruns and schedule delays. Besides that the
foreigner labour which is estimated to constitute 70% of the construction workforce
were reported to be involved in such social problem, lack of skill and communication
problem. In order to expand the economic growth and to compete globally, the construction
industry has to continuously improving the standards of construction especially regarding
quality of labor performance because productivity is part of a key performance indicator to
determine the success of the project.
 1.3. Research objectives
The general objectives of this research are to develop labour productivity for the construction
industry specifically for Addis Ababa mixed use building projects.

The paper will deal with the specific objectives of the effects on labour productivity and
improvements with respect to economy of the country, cost of material, the quality of works, inputs
of the works, budget for that specific project, environmental effect, commencing and completion
time of the project, speed of the project to recommend the best labour productivity outputs suited
for our country situation.

1.4. Significance of the study

This research is can be the benefits of building contractors how to develop labour productivity
in Addis Ababa mixed use building constructions. And also this research can be a source of
information for other research works that may be conducted in the field.

1.5. Scope of the study

This study will observe and analyze surveying data including personal interviews, questionnaires
for assessment on factor affecting labour productivity in Addis Ababa mixed use building
projects. The reason of why we choose this title is in our country one of the big problems
regarding the construction industry is labour productivity for the reason that the concerned body
is not put the standard document with reference to labor productivity and in internship program
we were seen the poor measurement of labor productivity in Addis Ababa mixed use building
construction projects.

So the study will be limited in private mixed use building projects in Addis Ababa. Surveys in the
forms of questionnaires, site visit and personal interviews will be conducted with the
stakeholders who will undertake referenced projects.

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The scope of this thesis is limited to the labor productivity of mixed use building projects. The
reason that we choose mixed use building project is since it is vast or huge project it is going to handle
a lot of skilled and unskilled labors so it will be suitable or available to collect data. In addition this
research will be based on factor affecting labour productivity in Addis Ababa mixed use building
projects.

The research will be conducted in Addis Ababa mixed use building projects. The study
compromise different category of contractors starting from grade 5 up to grade 1 with relating to
supervisors or consultants involved in the construction of the projects. We desire the above
contractors mostly they are participating in such kind of projects.

1.6. Research questions

How much of the Project cost do you think is the cost of labour, how to fewer your labour cost to
shrink cost overrun and how to boost your output?

What type of labour productivity measurement, handling of labors and treatments do you use &
How to improve it?

What are the most common labor productivity problems and effects and how to solve it?

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 2. Literature review
Productivity can be defined in many ways. In construction, productivity is usually taken
to mean labour productivity, that is, units of work placed or produced per man-hour. The
inverse of labour productivity, man- hours per unit (unit rate), is also commonly used.
Productivity is the ratio of output to all or some of the resources used to produce that output.
Output can be homogenous or heterogeneous. Resources comprise: labour, capital, energy, raw
materials, etc.

Productivity = Output
Labour cost
Horner and Talhouni stated “A popular concept in the USA, and increasingly in the UK,
is the concept of earned hours. It relies on the establishment of a set of standard outputs or
„norms‟ for each unit operation. Thus, a number of „earned‟ hours are associated with each
unit of work completed.”

“Productivity may then be defined as the ratio of earned to actual hours. The problem with
this concept in establishing reliable „norms‟, for setting standards. It also depends on the
method used to measure productivity, and on the extent to which account is taken of all the
factors which affect it.‟‟

At the project site, contractors are often interested in labor productivity. It can be defined
in one of the following ways:-

Labour Productivity = Output

Work hour/ Labour cost

There is no standard definition of productivity and some contractors use the inverse of above,
Labour Productivity = Labour cost / work hour
Output

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In general, productivity signifies the measurement of how well an individual entity uses
its resources to produce outputs from inputs. Moving beyond this general notion, a glance
at the productivity literature and its various applications quickly reveals that there is neither
a consensus as to the meaning nor a universally accepted measure of productivity. Attempts
at productivity measurement have focused on the individual, the firm, selected industrial
sectors, and even entire economies. The intensity of debate over appropriate measurement
methods appears to increase with the complexity of the economic organization under analysis.

There are however, a number of different productivity measures that are commonly used.
Choosing between them usually depends on the purpose of the productivity measurement and
the availability of data.

A United Nations report (1995) stated that in ordinary situations two major sets of factors
affect the site labour productivity requirements: organizational continuity and execution
continuity. Organizational continuity encompasses physical components of work, specification
requirements, design details etc. Execution continuity relates to the work environment and
how effectively a job is organized and managed. Management aspects include weather,
material and equipment availability, congestion, and out-of-sequence work.

Kane et al (cited in Herbsman et al, 1990) classified factors affecting construction productivity
into two main groups: technological factors and administrative factors. The technological
factors encompass those related mostly to the design of the project; the administrative group
factors relate to the management and construction of the project. Technological factors
comprise sub-groups such as design factors, material factors and location factors.
Administrative factors comprise sub-groups, such as construction methods and procedural
factors, equipment factors, labour factors, and social factors.

Heizer and Render (1990) classified factors influencing site productivity into 3 groups: labour
characteristic factors; project work conditions factors; and non-productive activities.
Olomolaiye et al (1998) stated that factors affecting construction productivity are rarely
constant, and may vary from country to country, from project to project, and even within the
same project, depending on circumstances. They classified factors influencing construction
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productivity into 2 categories: external and internal, representing those outside the control of
the firm’s management, and those originating within the firm. External factors included the
nature of the industry, construction client knowledge of construction procedure, weather, and
level of economic development. Internal factors included management, technology, labour,
and labour unions.

Enshassi et al 2006, Enshassi et al 2007, and Al Haddad 2007 stated that among the problems
which the Palestinian construction industry is facing are material supply schedules and project
scheduling techniques. Although a number of training courses were conducted to local
contractors, these training efforts did not focus enough on the abilities to use project
scheduling techniques such as Microsoft project and Primavera. Therefore training effort
should also be tailored to improve methods of studying productivity and ways of productivity
improvement on construction sites.

The five most widely used productivity concepts are

1. Labour productivity, based on gross output: - This productivity measurement traces the
labour requirement per unit of output. It reflects the change in the input coefficient of
labour by industry and is useful for the analysis of specific industry labour requirements.
Its main advantage as a productivity measure is its ease of measurement and readability;
particularly, the gross output measure requires only price indices on gross output. However,
since labour productivity is a partial productivity measure, output typically reflects the joint
influence of many different factors.

2. Labour productivity, based on value-added:- Value-added based labor productivity is

useful for the analysis of micro-macro links, such as an individual industry‟ s
contribution to economy-wide labour productivity and economic growth. From a policy
perspective, it is important as a reference statistic in wage bargaining. Its main advantage
as a productivity measure is its ease of measurement and readability, though it does require
price indices on intermediate inputs, as well as to gross output data. In addition to its
limitations as a partial productivity measure, value-added labour productivity has several
theoretical and practical drawbacks including the potential for double counting production of
benefits and double deflation.
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3. Capital-labour MFP, based on value-added:- This productivity measurement is useful
for the analysis of micro-macro links, such as the industry contribution to economy-wide
MFP growth and living standards, as well as, for analysis of structural change. Its main
advantage as a productivity measure is the ease of aggregation across industries. The data
for this measurement is also directly available from national accounts. The main drawback
to the value-added based capital-labour MFP is that it is not a good measure of technology
shifts at the industry or firm level. It also suffers the disadvantage of other value-added
measures that have been double deflated with a fixed weight Laspeyres quantity index.

4. Capital productivity, based on value-added:- Changes in capital productivity denote

the degree to which output growth can be achieved with lower welfare costs in the form of
foregone consumption. Its main advantage as a productivity measure is its ease of
readability but capital productivity suffers the same limitations as other partial productivity
measurements.

5. KLEMS Multi-factor productivity, KLEMS-MFP is used in the analysis of industry-

level and sectoral technical change. It is the most appropriate tool to measure technical
change by industry because it fully knowledge’s the role of intermediate inputs in
production. Do mar‟ s aggregation of KLEMS -MFP across industries renders an accurate
assessment of the contributions of industries to aggregate MFP change. The major drawback
to KLEMS MFP is its significant data requirements, in particular timely availability of
input -output tables that are consistent with national accounts. It is also more difficult to
communicate inter industry links and aggregation across industries using KLEMS-MFP than
in the case of value-added based MFP measures.

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 Factors Affecting Labour Productivity in Construction
Poor labour productivity is one of the main reasons for costs overruns and projects falling
behind schedule. To help you identify and prevent poor productivity in your work force, listed
below are some of the most recognized factors affecting labour productivity in the construction
industry:-

Overtime: - Scheduling of longer work days than a standard eight-hour work day or weeks
greater than a 40-hour work week lowers work output and efficiency through physical fatigue
and poor mental attitude.

Morale and Attitude: - the spirit of workers based on willingness, confidence, discipline, and
cheerfulness to perform work or tasks can be lowered due to a variety of issues. The most
common are increased conflicts, disputes, excessive hazards, overtime, over-inspection,
multiple contract changes, and disruption of work rhythm, poor site conditions, absenteeism,
and unkempt workspace.

Stacking of Trades: - This occurs when operations take place within a physically restricted
space with other contractors. It often results in congestion of personnel, inability to use or
locate tools conveniently, increased loss of tools, additional safety hazards, and prevention of
optimum crew size.

Absenteeism and Turnover: - There is a great deal of time and money lost associated with
high turnover and absenteeism on projects. Construction projects in certain areas with low
manpower and high demand for labour will usually be more impacted than others. Extreme
weather conditions (such as extreme heat or cold) will also increase absenteeism and turnover.
Replacement workers are usually not familiar with the work or area, and require experienced
workers to stop work and show them what to do. The impact can be up to four days of lost
work for each worker.

Mobilize/Demobilize: - This relates to moving resources on and moving off to projects as a

result from changes or delays, causing work disruptions. Productivity may drop during these
periods as time is lost when crews move from one area or work assignment to another.

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Errors and Omissions: - Increases in errors and omissions impact on labor productivity
because changes are then usually performed on a crash basis, out of sequence, cause dilution of
supervision, or any other negative impacts.

Start/Stop: - This results from a work stoppage or suspension of work, which may cause a
break in the schedule, usually triggering a start/stop of work activity. This can have a major
impact on productivity and cost of a project. Work scheduled or reassigned during holidays
such as Thanksgiving, Christmas, New Year’s, are often impacted with stop-starts. Workers
tend to discuss the time off and lose previous momentum with a drop in productivity before
they get back in routine.

Reassignment of Manpower:- When workers are reassigned, they experience unexpected or

excessive changes, losses caused by move-on or move-off, reorientation, and other issues that
result in a loss of productivity.

Late Crew Build-up:- This is caused when the planned project manpower loading is altered
and causes manpower loading to build up slower than planned due to availability, shortage of
resources, or competition from resources. Impacts can be in excess of 10 percent.

Logistics: - Insufficient or poor material handling, owner-furnished material, procurement

practices, or a lack of controls can cause procurement or delivery problems, as well as other
issues. This prevents, delays, or disrupts the normal material workflow to a work area,
warehouse, or lay down yard. This can also be a result from the additional replacement or
substitution of material due to contract changes, defects, or delays at the work site.

Security Check: - This could be caused by workers entering or leaving the area, or from
checking in and out, toolbox checks, transport of labour to secure area, and so on.

Learning Curve: - When crew turnover causes new workers to be added to a crew or
additional manpower is needed within a crew, a period of orientation occurs in order to become
familiar with changed conditions. They must then learn work scope, tool locations, work
procedures, and so on.

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Hazardous Work Area: - This is caused when working in an area that is classified as
hazardous, requiring special safety equipment and clothing. Restrictions may limit time and
exposure of workers to the area, resulting in less time on tools in the area.

Dilution of Supervision: - This occurs when supervision is diverted from productive, planned,
and scheduled work to analyze and plan contract changes, expedite delayed material, manage
added crews, or other changes not in the original work scope and schedule. Dilution is also
caused by an increase in manpower, work areas, or project size without an increase in
supervision.

Holidays: - If workers work on holidays, there is not only a cost factor for holiday pay, but
there is usually a loss of productivity as well. It may be addressed as a morale factor since
workers are away from families and working instead of enjoying the holidays, or it can also be
factored separately. Either way, there is usually a productivity loss to consider.

Weather and Season Changes: - Performing work in a change of season, temperature zone, or
climate change resulting in work performed in either very hot or very cold weather, rain or
snow, or other changes in temperature or climate can impact workers beyond normal
conditions.

Shift Work: - This is when work is performed at any time other than the first shift or the
morning shift of a work day. Work on second and third shifts are less efficient and may even be
based on a shorter work period. The reduced daylight hours and problems trying to pick up
where the last shift left off results in less productivity.

Over-manning:- This is caused when work planners hire too many workers for the estimated
work scope and duration. Sometimes, when labour in certain areas is scarce, work planners
may overcompensate for potential absenteeism and turnover, which creates overstaffing.
Another cause is the false assumption that increased manning will always result in increased
work productivity.

Tool and Equipment Shortage: - This is caused when there is insufficient quantity or quality
of tools and equipment to meet the needs of the project.

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Alternating, Staggered, or Rotating Work Schedules: - This usually results in unusual
scheduled work periods designed to optimize hours worked, attract labour to remote sites,
compete for labour resources, and minimize fatigue. Examples include allowing half the work
force to take every other Friday off, or staggered crews of 4-12s (working on four days and
then four days off), or rotating crews to work a seven days on seven days off.

Technology Improves Productivity

A common theme between all these factors revolves around a breakdown in communication of
some sort. When tasks aren’t communicated effectively or workers do not have a clear
understanding of the task at hand, work will come to a standstill.

Technology has improved efficiency across many industries; 70% of the nation’s productivity
gains came from technology. In the construction sector, technology hasn’t always been readily
embraced, but with the rise of cloud computing and mobile devices, it’s enabling businesses of
all sizes to manage their information more efficiently. Enabling your workers to communicate
through technology as well as using it to assist in day to day tasks can help maximize output
and overcome some of these productivity draining factors.

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 3. Research Methodology

3.1. Research Approach

The research focuses on factor affecting labour productivity in Addis Ababa mixed use
buildings. In order to meet the aims of the research, a qualitative and quantitative approach
was utilized.

3.2. Research Area

Our research area is Addis Ababa, Mixed use Building construction sites which are found in
Addis Ababa Building construction site.

3.3. Research Design

Generally there are two major categories of design: For our research we have chosen
observational study since the intension of this study is assessing and describing the existing
situation hence descriptive design is applicable.

3.4. Population, Sample and Sampling Techniques

For the application of the study we have used simple random sampling technique in which
this technique helps us to give equal probability for our subject.

3.5. Method of data collection

Data gathering instrument
The instrument used to gather the required information includes questionnaire, interview,
observation and personal experience in Addis Ababa mixed use Building Projects.

Questionnaire
It’s preparing to obtain information from contractors and employer as they are the center for
the research.
Interview
To secure additional information, unstructured interview question will conduct.

Observation
In order to make the research stronger we go to the site for observation.

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Flow Chart Representation of the Thesis

Books
Detailed literature
review Archival

Questionnaires
Interview
Data Collection
Desk study
Archival
documents

Quantitative
Analysis of result and Qualitative
discussion

By analysis Conclusion and

and discussion Recommendation

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 4. Budget and Schedule

Budget

No Item Unit Qty Unit price Total price

1 Supplies & Stationeries
 Flash Disc (8GB) No 1 250.00 250.00
 Books, Paper, Magazines, CDs LS
& Others 250.00
2 Manuscript
 Typing, Photocopying, scanning,
printing, binding (manuals and LS
3500.00
pictures)
3 Transport & per-diem
 Transport for data collection LS 4000.00
4 Internet
 Internet café LS 200.00 200.00
Total 8200.00

Schedule

March April May

No Duration
Activity In Week Week Week
Week 1 2 3 4 1 2 3 4 1 2 3 4
1 Proposal writing 2
2 Literature review 7
3 Data Collection 4
5 Data analysis 2
Final thesis report
6 1
submission & Defense

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 5. Reference

(1) North Dakota state University, Study of factors that affecting labour productivity at a
building construction projects in the USA, September 2012, Mahesh madan Gundecha
(2) University of Addis Ababa, Building constructions productivity of labour improvement
model design for Defense construction enterprise, December 2014, Addis Ababa, Wagaye
Tefera
(3) The Islamic University Gaza, Study of the measurement of labour productivity is the
Palestinian construction industry, December 2003, Zayad Abo Mostafa
(4) Loughbough University, The analysis of productivity in building construction, March 1996,
http://creative commons.org/licenses/by-nc-nd/2.5/, Eww Chye LIM
(5) KTH Architecture & The Built Environment, Productivity Measurement and improvement,
Stockholm 2012, Yana Myronko
(6) International Journal of scientific & Engineering Research, Assessment of factors affecting
labour productivity on Road construction projects in Oromia Region, colume 7, Issue 11,
November 2016, Emer T. Qezon, Meleese Mengistu
(6) International Journal of Structural & Cicil Engineering Research, Factors affecting labour
productivity on construction project, ISSN 2319-2006, www.ijscer.com, Volume 3 NO4,
November 2014

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