INTRODUCTION
Statement of the problem
The construction industry plays a crucial role in both developed and developing nations, with Vietnam experiencing significant growth and achievements in this sector According to the General Statistic Office of Vietnam (2011), the construction industry contributes approximately 6.41% to the country's gross national product and 6.4% to total employment This expansion has created numerous job opportunities for skilled, semi-skilled, and unskilled laborers However, despite a year-on-year productivity increase of 5.1%, Vietnam's labor productivity remains low compared to other Southeast Asian countries, as highlighted in the Vietnam’s labour and social trends report (Institute of Labour Science and Social Affairs, 2010).
A successful construction project meets its goals regarding cost, time, quality, and safety, which hinges on achieving planned productivity levels However, the construction industry faces significant challenges related to productivity, impacting firms and projects alike Given the industry's critical role and the nature of construction projects, there is an urgent need to focus on enhancing productivity to ensure successful outcomes.
Productivity is essential for organizations to remain competitive, achieve objectives, and ensure stakeholder satisfaction while maintaining financial health At the industry level, it plays a crucial role in client retention, attracting investments, and contributing to national economic growth (Durdyev and Mbachu, 2011) Identifying the key factors influencing labor productivity fluctuations is vital for enhancing efficiency in construction projects, ultimately reducing costs and timelines This improvement can provide Vietnamese construction companies with a competitive edge over foreign counterparts Consequently, this study aims to address these critical questions.
“What are the factors affecting labor productivity fluctuation in the construction” and
To effectively evaluate the impact of various factors on labor productivity fluctuations in construction projects, it is essential to analyze the specific elements influencing these changes Understanding the dynamics of labor productivity requires a comprehensive examination of the factors affecting it, which is crucial for optimizing performance and efficiency in the construction industry.
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 difference in Labor Productivity Fluctuation due to ProjectCharacteristics.
Scope of the study
This study will focus on completed construction projects in Vietnam from 2002 to the present, with a particular emphasis on Ho Chi Minh City Participants will include key stakeholders such as clients, contractors, project managers, construction managers, foremen, and chief engineers, all of whom possess significant experience in managing specific construction projects.
Research contribution
The research results can be used to:
- Help Construction Companies in Vietnam to have an overview on Labor Productivity in construction project.
Construction companies in Vietnam need to gain a deeper understanding of the key factors influencing labor productivity fluctuations in their projects By identifying and addressing these factors, they can effectively manage labor productivity, leading to improved project outcomes and enhanced efficiency in their operations.
- Help them in building a suitable Labor Productivity Plan with its characteristic and condition.
- Be a reference for new investors who want to invest in construction industry in Vietnam.
- Help to develop Vietnam’s construction industry in particular and economic development in general.
Research Structure
This research consists of six chapters from Chapter 1 to Chapter 5
This chapter presents the research statement, outlines the problems addressed, and defines the research objectives and scope Additionally, it details the study process, which is crucial for the success of the master's thesis.
This chapter explores contemporary definitions of project management, productivity, labor productivity, and construction productivity Building on previous research, it identifies the key factors influencing labor productivity in construction projects, formulates the hypotheses, and proposes a research model for the study.
This chapter presents the research process and the methodology that will be used for empirical testing of the research model which has been developed in chapter 2.
This chapter details the results of the data analysis, which is a critical component of the study It includes Sample Descriptive Statistics, Reliability Analysis, Exploratory Factor Analysis, Multiple Regression Analysis, and ANOVA Analysis Together, these analyses offer a comprehensive understanding of the factors influencing labor productivity fluctuations in construction projects in Vietnam.
Based on the data analysis presented in Chapter 4, we draw a conclusion that highlights the key factors influencing labor productivity fluctuations in construction projects This study reaffirms the critical elements affecting productivity and offers actionable recommendations to enhance labor efficiency in the construction sector Additionally, it outlines potential directions for future research in this area.
LITERATURE REVIEW
Definition related to project and project management
According to the Project Management Body of Knowledge (2008), a project is defined as a temporary endeavor aimed at producing a unique product, service, or result This temporary aspect signifies a clear beginning and end, concluding when the project's objectives are met, when it is terminated due to unmet goals, or when the project's necessity ceases Importantly, the term "temporary" does not imply a short duration, nor does it typically apply to the lasting outcomes generated by the project, as most projects aim to create enduring results.
A project is a temporary initiative that encompasses a series of interconnected activities and utilizes various resources to achieve a distinct and unique result It operates within specific constraints of time, cost, and quality, and is frequently employed to implement change (Lake, 1997).
Project management has been defined by PMBOK (2008, p.8) as “The application of knowledge, skills, tools and techniques to project activities to meet project requirement”
Yuong (2007) defined project management as “a dynamic process that utilizes the appropriate resources in a controlled and structured manner to achieve some clearly defined objectives indentified as strategic needs”.
Definitions related to productivity
Prokopenko (1987) defines productivity as the ratio of output generated by a production or service system to the input utilized to create that output It encompasses the efficient use of resources such as labor, capital, land, materials, energy, and information in producing goods or services Additionally, productivity can be viewed as the relationship between results and the time required to achieve them, with time serving as a universal measurement that lies beyond human control Consequently, a system is deemed more productive when it takes less time to achieve the desired results.
Productivity is fundamentally defined as the relationship between the quantity and quality of goods or services produced and the resources utilized in their production, regardless of the production type or economic and political systems While interpretations of productivity may vary among individuals, its core concept remains consistent across different contexts.
According to Eatwell and Newman (1991), productivity is defined as the ratio of output to input, representing the arithmetic relationship between the quantity produced and the resources utilized during production This perspective highlights productivity as the output generated per unit of input used.
International Labor Office (as cited in Mostafa, 2003) described productivity as
Productivity measures the efficiency of a project by comparing the inputs, such as manpower, materials, and tools, to the outputs achieved Enhancing productivity on a construction site involves increasing output while reducing costs and time This encompasses all activities from planning to final site clearing; if a contractor can complete these tasks with fewer resources, productivity will improve significantly.
Overall, productivity could be defined as the ratio of outputs to inputs
When calculating productivity, it is essential to clearly define the inputs and outputs involved Inputs may include labor, equipment, materials, and capital, measured in either units or dollar value Outputs can encompass the value of products or services, revenue generated, or value added By specifying these elements, businesses can effectively assess their productivity levels.
National labor productivity is calculated by using the entire economically active population as input and measuring the total value of goods and services produced as output (Prokopenko, 1987).
Productivity is commonly understood through the relationship between outputs and inputs, yet defining these terms can be challenging Outputs typically manifest as tangible goods or intangible services, while inputs are more complex due to their interdependent nature in production processes To simplify the understanding of inputs, they are often categorized into three main types: labor (human resources), capital (physical and financial assets), and materials Additionally, productivity is sometimes measured by the quantity of goods and services produced by an individual within a specific timeframe, highlighting the role of time as a crucial factor, while considering capital and energy as supportive elements that enhance productivity.
Labor productivity, as defined by Freeman (2008), is the ratio of output, measured by gross domestic product or gross value added, to input, represented by total hours worked or total employment.
Labor productivity = volume measure of output / measure of input use
The volume measure of output indicates the quantity of goods and services generated by the workforce, serving as the numerator in the labor productivity ratio This output is quantified through either gross domestic product (GDP) or gross value added (GVA) Conversely, the measure of input use accounts for the time, effort, and skills contributed by the workforce, which can be assessed by the total hours worked by all employees or the total number of individuals employed.
Total productivity is an essential metric that assesses economic efficiency by evaluating the output generated per unit of all utilized resources Over the past ten years, there has been a significant shift towards adopting this measure, which represents the ratio of total output to the cumulative input factors (Stainer, 1997).
2.2.4 The formulation for the fluctuation of labor productivity
Labor productivity fluctuation is determined by the variance between actual labor hours and planned labor hours for a specific project or work package, expressed as a ratio of actual labor hours This calculation is represented by Equation [2.2].
Where, L = Fluctuation of labor productivity
WA = Total actual labor hours of project/work package
W P = Total planed labor hours of project/work package
If L