Wagaye Tefera

Building Construction Productivity of Labour Improvement Model Designing for Defense Construction Enterprise
Addis Ababa University

School of Graduate Studies
Institute of Technology
School of Mechanical and Industrial Engineering
Building Construction Productivity of Labour
Improvement Model Designing for Defense
Construction Enterprise
This Thesis is submitted to The School of Graduate Studies of Addis

Ababa University in Partial Fulfillment of the Requirement for the
Degree of Masters of Science in Industrial Engineering.
Prepared by: - Wagaye Tefera
Advisor: - Dr.Ing. Danel Kitaw
Co-Adviser: - Yitagesu Yilma (PhD candidate)
Date: - December, 2014

Wagaye T. 2014
Table of Contents
Acknowledgment ............................................................................................................................ i
List of Tables .................................................................................................................................. ii
List of Figures ............................................................................................................................... iii
Acronyms ...................................................................................................................................... iv
Abstract ...........................................................................................................................................v
Chapter One Introduction ...............................................................................................................1
1.1 Background of the Study...…...………...…………………………………………….……….1
1.2 Statement of the problems .........................................................................................................3
1.3 Objective of the research ..........................................................................................................4
1.3.1 General objective ...................................................................................................................4
1.3.2 Specific Objectives .................................................................................................................4
1.4 Significance of the research .......................................................................................................5
1.5 Scope of the research .................................................................................................................5
1.6 Research methodologies ............................................................................................................5
1.7 Organization of the research ......................................................................................................7
Chapter Two Related Literatures survey ........................................................................................9
2.1. Concept of construction process ..............................................................................................9
2.2. The management of a construction process .............................................................................9
2.3. Productivity & productivity mgt in construction process ..............................................…….13
2.4. Factors affecting labor productivity ........................................................................................24
Chapter Three status of construction industry in Ethiopia………………………………………31
3.1. The Ethiopian construction industry .......................................................................................31
3.1.1. Contribution to national income ..........................................................................................31
3.1.2. Contribution to employment ................................................................................................32
Wagaye T. 2014
3.1.3. Contribution to government revenue ...................................................................................32
3.1.4. Multiplier effects .................................................................................................................33
3.2. Labor productivity in the construction industry .....................................................................33
3.3. Construction contractors in the Ethiopian construction ..........................................................34
3.4. Background of the case Enterprise .........................................................................................37
3.5. Construction process of Defense Construction Enterprise .....................................................38
3.6. Raw materials inputs ...............................................................................................................42
Chapter Four data collection, data analysis and Interpretation .....................................................43
4.1. Data collection, analysis, results and discussion ....................................................................43
4.1.1. Key constraints of labour productivity in the case enterprise ..............................................45
4.2. Productivity measurement & analysis methodology development .......................................61
4.3. Productivity improvement model design ................................................................................61
Chapter Five Conclusion and Recommendation ...........................................................................63
5.1. Conclusion .............................................................................................................................63
5.2. Recommendation ....................................................................................................................64
References .....................................................................................................................................65
Wagaye T. 2014
ACKNOWLEDGEMENT
Above all, I would like to thank the Almighty GOD for being with me in all circumstances I am
in. Next, I would like to thank my co-advisor Yitagesu Yilma (Phd candidate) for his friendly
and prudent guidance and support during the research work of this thesis.
My great gratitude reaches to Major General Birhane Negash (State Minister), the head of
Defense Infrastructure sector and Mr. Tibebu Ayele, General Manager of Defense construction
Materials Manufacturing enterprise for giving me this opportunity having the believe that higher
education can bring change so that I can continue my higher education.
I would like to Thank Birhanu Beshah (Dr.), the head of Industrial Engineering Department for
his help during the beginning of my study in industrial engineering.
My thanks also gives to Captain Mebrhatu Lemlem, Manager of Kality construction material
production fatory and all other staff members of the factory for giving me any support that was
helpful for this research work. In particular, I would like to thank also all the managers and staff
members of Defense Construction Enterprise for their cooperation. I also thank all of my
instructors who are endeavored to make us, the students, to be fruitful in all our studies.
Finally, I would like to thank all my families for their moral support and all esteem friends,
especially, Mr. Muluken Habtu and Mr. Dereje Gizaw who are with me in support of idea and
morale for the realization of this thesis.
Wagaye T. 2014
List of tables
Page
Table 3.1 Rental income tax, total tax and total domestic revenue……………………..32
Table 3.2 Lobour productivity table ……………………………………………………33
Table 3.3 Number of contractors licensed by city administer as of 2006 ……………..35
Table 3.4 Number of licensed contractors by grade level in 2006……………………..36
Table 4.1 Sub components having the highest level of impact in the enterprise ………48
Table 4.2 Productivity constraints related to project characteristics ……………………49
Table 4.3 Productivity constraint related to work force ………………………………..51
Table 4.4 Productivity constraint related to management ……………………………....53
Table 4.5 Productivity constraint related to technology ………………………………...54
Table 4.6 Labour productivity constraints related to unforeseen events ………………55
Table 4.7 Labour productivity constraints related to consultants……………………….56
Table 4.8 Productivity constraints related to other external factors……………………..57
Table 4.9 Relative levels of impact of the broad categories constraints………………..58
Table 4.10 Relative levels of impact of onsite labour productivity constraints ….…….60
ịị
Wagaye T. 2014
List of Figures
Page
Fig.1.1. The research framework………………………………………………………...8

Fig.2.1. The construction work process model ………………………….…….………..11
Fig.2.2.A schematic diagram of the overall construction process model...…….………..12
Fig.2.3. Process of productivity management …………………………………………17
Fig.2.4. Nine basic components of MPPMM …………………………………………..21
Fig.2.5. Frame work of productivity improvement …………………………………….24
Fig.3.1.The Defense Construction Enterprise construction process high level Map……39
Fig.4.1. Demographic profile of respondents by experience …………………………..44
Fig.4.2. Internal constraints to building construction labour productivity ……………...46
Fig.4.3. External constraints to building construction labour productivity……………...47
Fig.4.4. Building construction productivity model for DCE……………………….….62
ịịị
Wagaye T. 2014
Acronyms
BCSPT – Build & construction sectors productivity task force

ISIC – International standards industrial classification
EANPC- the European association of national productivity center
MFPMM – Multifactor productivity measurement model
TFP – Total factor productivity
R & D- Research and Development
MCAA – Mechanical Contractor Association of America
EEA – Ethiopian Economic Association
GPP – Gross Domestic Production
LFS – Labour Force Statistics
MoFED – Ministry of Finance & Economy Development
ILO – International Labour Organization
CSA- Central Statistic Agency
VA – Value Added
BPR – Business Process Re-engineering
HCB – Hollow Concrete Block
MR- mean rate
TRC – Travelers Research Center
ịv
Wagaye T. 2014
Abstract
Now days Productivity has become a day to day issue that every researcher, politician, and
managers and any workers of an organization talks about it because it is key to the survival and
growth of any organization, industry or nation. Because the world’s resources are getting scares
and life is continuing, out puts of greater or equal amount should be produced or built for what is
consumed possibly with optimum wastage so that resources can be conserved.
From several research works it is observed that the history of the construction industry
worldwide is full of projects that were completed with significant time and cost overruns.
Furthermore, many researchers and practitioners have also identified poor management practices
that lead to poor performance such as scope changes, design errors and omissions, lack of proper
planning and scheduling, improper management of tools, equipment, materials, and labour
among many other factors. This is also true for similar construction projects in Defense
Construction Enterprise.
In an attempt to reverse these trends, this study aims in identify and analyze these problems
using the statistical survey and multi-attribute analytic technique. Based on the results of these
problems, a model that would integrate the relationship between time and cost overrun with
labour productivity has been developed and by this the productivity of the enterprise will be
improved and hence, project cost will be reduced and projects will be completed before contract
time will be elapsed. Consequently customers would be satisfied since buildings would be
delivered on time for the intended service.
Wagaye T. 2014
Chapter One: Introduction
1.1 Background of the Study

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. 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.
Productivity is a complex concept that could be interpreted in varied contexts depending on the
objectives sought; the objectives in turn determine the parameters involved in its assessment in
relation to the benchmark used for its comparison. Productivity can be considered in many ways
and on different levels. It has also been defined by different researchers and practitioners in the
manufacturing and construction industries. According to Borcherding Productivity is defined as a
ratio between an output value and an input value used to produce: the output consists of products
or services and input consists of materials, labour, capital, energy, etc. According to Drucker,
there is nothing as dangerous to an economy as a decrease in productivities because it creates
inflationary pressure, social conflict, and mutual suspicion. [2] According to the 10th Nordic
Conference of small Business Research, Vajo University, productivity can be determined as the
relationship between the outputs generated from a system and the inputs provided to create those
outputs. According to Rantanen, at the firm level productivity can be defined as the measure of a
firm’s ability to utilize the inputs to make as match outputs as possible. [3] At the macro-
economic level, the Building and Construction Sector Productivity Taskforce (BCSPT) sees
productivity as an industry’s ability to convert inputs into outputs. Generally, productivity is a
measure of how well resources are utilized to achieve set objectives or desired outputs. This is a
definition that fits well with different perspectives; it emphasizes creativity and innovation,
which target achieving more outputs with less resource inputs by re-engineering the production
or service delivery process and optimizing the resource consumption. The benchmark for
comparison is critically important because productivity outcome in itself is meaningless except if
it can be compared with a benchmark.
Wagaye T. 2014 Page 1

The comparison could be intra-entity - i.e. comparing productivity outcomes within a given
entity across a time period with a view to gaining insights into the implicit trend. It could also be
inter-entities - i.e. comparing productivity outcomes across similar entities with a view to
determining the relative levels of productivity of the entities at a snapshot or across a time
horizon. [5]
Construction is a collaborative activity that it consists of many stages and it is a joint effort of
many parties. The larger number of participating companies is the result of wide range of
expertise needed. In addition, generally construction is implemented in the form of one-off
project, which make it difficult to coordinate the process for successful completion. The situation
is further complicated by the fact that the various stages and activities of buildings are highly
interdependent which creates a vicious circle. Hence any disturbances are widely reflected on the
activities of other parties causing compound effect.

1.2 Statement of the problems

The world today is full of competition and any business sectors have to device methods of
improving their productivity so that they can compete and survive in this dynamic global
market. Defense construction enterprise is one of the well known construction enterprise in
Ethiopia, which is playing its role mainly in the construction demand of the ministry of
national defense of the federal democratic republic of Ethiopian. As government enterprise the
enterprise has got a good advantage in that it has a good government support and that it can
get the market through negotiation when different construction demands arise from different
department of the national defense. The enterprise also involves in roads and dams
constructions in different regions of the country where there is high security problems and
areas where the weather conditions are hard negotiating with the federal and regional
government of the country. On contrary the enterprise has different problems that affect the
productivity of the enterprise. Since most of the problem on productivity are on building
construction, this research work deals with the factors affecting labor productivity of building
construction of the case enterprise. The problems that most affect the productivity of labor in
the enterprise are;
A. Project time and cost overrun
Here since construction projects did not performed within the contract agreement time, the
enterprise is exposed for extra cost for labour, equipment rent, inflation, and lower
profitability. While the client is affected in that it remains with no services because of late
finish of the construction projects. Based on the interview made with the building construction
cost estimate team leader 90% of the building construction works require extra cost and time
for completion.
B. Professional turnovers.
This affects the project work in that it requires time to replace and experience the new one to
hand over the new environment/system. During data collection, the percentage of professional
turnover is more than 12.5% up to 16% from year 2003 up to 2006 E.C.

C. Management problems
Here there is a gap in properly allocating resources and proper procurement planning, ware
housing, scheduling of works. Productivity is affected due to less commitment in giving
serious attention to prepare proper schedule and execute accordingly until the project is
completed. Since resources (materials and equipment and labour, etc.) required for the project
are not arranged on time, work couldn’t be performed and can be a cause for dalliance. In this
case the enterprise need extra time and cost for completion, besides exposed to inflation due
to time value of money etc.
D. Rework problems
This is the major problems among the others which affect the productivity of the enterprise.
So, the presence of those problems requires the enterprise extra time, extra labor cost, and
extra materials.
E. Man power skill and experience problems
There is a skill and experience gap in the assigned personnel to execute the project based on
plan and schedule. Here capacity problem to hold the given responsibilities to the required
extent and lack of experience and skill of the assigned personnel are some of the problems
stated in this regard.
F. Safety problems
There is an injury problem in the construction sites. Due to this problem the enterprise is
exposed for medical expense, payment for the injured workers idle and require for extra labor.
These problems can be minimized and avoided by investigating the root causes of these
problems and developing a model which can help to improve labor productivity of the
enterprise.
1.3 Objective of the Research

1.3.1. General Objective
The general objective of this research is to develop labour productivity improvement model
for the construction industry specifically for Defense Construction Enterprise.

1.3.2. Specific Objectives

The specific objectives of the research
• To identify the current productivity status of the enterprise and find out factors that affect
labour productivity.
• To analyze the relative level of impact of the constraints of onsite/ project labour
productivity
• Devise methods to avoid those factors affecting labour productivity.
• To examine the effects of labour productivity on project cost and time overrun.
• To design a model that can ensure efficient resource utilization and increase the
enterprise effectiveness through improving the enterprise’s labour productivity
1.4 Significance of the Research
This research benefits the enterprise how it can improve its building construction productivity
by applying the designed productivity improvement model. The research can also help the
enterprise to properly utilize its resources by improving labour productivity for better
customer satisfaction and profitability. By this the enterprise also gets benefit creating
competitive advantages in the market. On the other hand, this research can be a source of
information for other research works that may be conducted in the field. Moreover, the study
can be applied to visualize labour productivity problems for similar enterprises specifically on
building construction.
1.5 Scope of the Research
The causes of lower productivity in defense construction enterprise are management, project
time and cost overrun, materials and equipment late delivery, poor incentive mechanisms and
improper assignment of personnel and high professional turn over. So, this research focuses
on to the assessment of productivity of labour in relation to these problems which are seen on
building construction sites. Because these are the major causes on building construction that
affect the productivity of labour in the enterprise.

1.6 Research Methodologies

The methodologies tried to be employed to achieve the objective of this research are as
follows:
• Using Primary Data
The study relied on experienced-based feedbacks on the key on-site/project labour
productivity constraints from those at the forefront of project implementation:
- In this method the Enterprise General Manager, Building Construction Core Process
Manager, Building and Road Construction Cost Estimate Team Leader, Building and
Road Construction Plan and Control Team Leader, Some Consultants and Selected
Construction Project Managers and selected subcontractors are interviewed how the
enterprise is performing and what construction problems are in the enterprise which
affects productivity of labour.
These personnel are chosen because they have strong relation with the construction
processes. In this way qualitative data which is important for the research work are
obtained.
- Closed ended Questionnaires or check list are prepared and distributed to selected
building construction project managers, project office and construction engineers,
head quarter office engineers and all team leaders, case team leaders and cost
estimators, and others personnel who are responsible in procurement and store
administration as well as selected work men those who are working in the
construction sites at least for a year. These individuals are selected because they have
high exposure to know more about the condition of the building construction
problems to give reliable information which is an important input for the research
work in order to assess and find out all the problems and their impacts very easily.
Here quantitative data are obtained to determine the level of impact of those factors
affecting productivity of labour in the enterprise. Based on this result detail root
causes of those problems which have higher impact on the productivity of labour is
investigated.

- Using site visit. In this method project site observation is made. Here the moral,
capacity to perform the job, methodology of construction, equipment employed is
observed. In addition the coordination among members in the construction project,
resource management and method of supervision is observed and analyzed.
• Using Secondary Data
In this method data is collected from the following sources.
- Important Data was collected, analyzed and reviewed from documented sources and
recordings on building construction projects and on the methods how the construction
projects are managing resources in the construction process and the number of
employ, schedules and etc. Here qualitative and quantitative data are found to
evaluate the productivity of labour and the factors those affecting productivity.
- Using different books and websites which help to access ample information related to
productivity of labour to improve productivity of an organization.
- Collecting data from Minster of Urban Development and Construction and From
Central Statistic Agency such data as, employee in the construction industry, the
development of the construction industry of the nation etc.
The descriptive statistical survey is chosen for this research work as the most appropriate
research tools. [5] This involves the use of pilot interviews and questionnaire surveys at the
qualitative and quantitative data gathering stages, respectively. At the qualitative data stage, a
convenience sample of project managers, consultants, subcontractors and higher management
members in the head office are interviewed on the constraints to labour productivity in building
construction of the Enterprise. This used to design a questionnaire which can subsequently be
pretested to ensure its clarity and relevance. The feedbacks can form the basis for redesigning
the content and structure of the questionnaire so as to improve its appeal and following survey
response rate.
To analyze the ratings of the respondents, the multi-attribute analytical technique is used. This
approach was recommended in past studies by Mbachu and Nkado; Chang and Ive as the
appropriate analytical approach to group ratings of the variables in a given set.

The analysis involves the computation of the Mean Rating (MR), which is the average or
representative rating point for the collective ratings made for each variable in the subset as
provided by Mbachu and Nkado. [5]
1.7. Organization of the Research

This research work is structured as, chapter one is the introduction of the study which concerns
on the concept and definition of productivity and deals about statement of the problems,
objectives, scope, significance and etc of the study; Literatures is reviewed and discussed in
chapter two; chapter three assess about construction industry in Ethiopia and the case enterprise.
In chapter four data were collected, analyzed and discussed, and based on the result obtained
from the analysis an appropriate model that can improve the productivity of the enterprise was
designed; and finally conclusion and recommendation are presented in chapter five. The
framework of the research is shown schematically in fig. 1.1 bellow.

Data collection
Introduction
 Interview
 Research brief introduction  Questioner
 Statement of the problems  Observation
 Research objective , significance,  Document reviews
scope and methodology
Status of construction industry in

Ethiopian
 The Ethiopian construction industry
The case construction enterprise
 Data collection
 Analyzing and discussion
Literature review
Theoretical and empirical views and Development of Conceptual model
concepts on
 productivity
 construction process
 Construction management
 Productivity measurement Conclusion and recommendations
models
Fig. 1.1 research framework

Chapter two: Related Literatures survey
2.1. The Concept of Construction Process

The construction process involves the designing and implementing a building project from
the conception of the project in the client’s mind to its completion for commissioning and
use. The process consists of many stages and it needs a joint effort of many parties. Thus,
special focus should be on the interrelated tasks of the numerous parties, i.e. communication
and interfaces. The large number of participating companies is the result of the wide range of
expertise needed. In addition, construction is generally implemented in the form of one-off
projects, which makes it difficult to co-ordinate the process for success full completion. The
situation is further complicated by the fact that the various stages and tasks of building are
highly interdependent which creates a vicious circle. Any disturbances are widely reflected
on the activities of other parties causing compound effects. [13]
2.2. The management of a construction process
Before discussing about the management of a construction process let see about the clear
definition of construction. According to UN International Standards Industrial Classification
(ISIC), Rev.3, construction is defined generally as an economic activity directed to the
creation, renovation, repair or extension of fixed assets in the form of buildings, land
improvements of an engineering nature, and other such engineering constructions as roads,
bridges, dams, etc. The industry consists of a group of establishments engaged in one or more
of the following activities: Site preparation; Building of complete constructions or parts
thereof, civil engineering; Building installation, Building completion and Renting of
construction or Demolition equipment with operators. The industry includes all activities of
construction irrespective of whether they are carried out by private or public construction
firms or enterprises, whether done on a contractual basis or of own account. [22]
According to central statistics agency of Ethiopia construction is classified as
A. General Construction
It is the construction of dwellings, office buildings, farm buildings, stores, and public &
utility Buildings, etc., or motor ways, streets, bridges, tunnels, railways, airfields, harbours or
ports, etc.

B. Building Construction
Building construction is the construction of Building of all kinds. It includes new work,
repair, and addition/extension, erection of prefabricated buildings or structures on the site and
also construction of temporary nature.
C. Road construction
It is the construction of motorways, streets and bridges only.
D. Specialized construction
The construction of parts of buildings and civil engineering works without responsibility for
the entire project is placed under specialized construction. It also includes pile driving,
foundation work, concrete work, brick lying, stone settings, scaffolding, plumbing,
installation of electric air conditioning and heating systems, etc.
Enterprise:-
It is an economic unit producing goods (construction works) and services and owning assets,
incurring liabilities, and involving in economic activities and in transactions with other
economic entities. It is an economic transactor with autonomy in financial and investment
decision making as well as allocating resources for the production of goods and services. It
may be engaged in one or more productive activities at one or more locations.
Thus, the management of a construction process describes the processes used to administer
the activities of a construction according to the construction Agreement and the Agreements
with the design professionals. Construction Management explains activities during the
construction phase: – meetings, submittals, inspections and testing, changes in the work
affecting the project schedule or budget, pay requests, field observation reports, and project
closeout. [14]
Among management’s usual questions are: are we on schedule, are cost projections being
met? Conventional construction management is focused on planning and controlling
outcomes, not on the process. Project controls are typically set up to ‘manage the contract’,
and ensure schedule and budget expectations are met. In different research works different
construction process model and construction process frame work had been developed for
improving labour productivity in construction. Figure 1.2 depicts the input output relation
passing through construction process which is monitored by the project staffs.

Inputs Process Outputs
Resources
• Human
• Financial Management
Construction
• Physical
Regulatory facility
• Information
Attributes Operation
Information
• Facilitation work
by externals
Monitor
Fig.1.2. The Construction Work process Model (source taken from [28])
On the other hand the construction process model covers the activities needed to carry out a
building project by various major parties and integrates these activities as illustrated in figure 1.3
bellow.

Possible need
Of client Feedback
Need of Client
Produce
and
manage
Produce ARCH design
building
and
process
manage
1
architectu STB design
ral design Produce
data and
2 manage
structural
Resources design
data
3 BS design
Produce
and
manage
service
design
data GEO design
Produce and
4 manage
geotechnical
design data
5
Implement
building
6
Client Architect Structural Building Geotechnical
Engineer services designer Building
Designer Contractor readyfor
use
Fig.1.3. A schematic diagram of the overall construction process Model
Source: VTT Building Technology, technical research center of Finland, 1997, construction
Process model

Feedback of results of planning and control is necessary for management to decide whether or
not and which corrective action to take. But basic control data are accounting-based outcome
measures that usually arrive too late for viable management action. [23]
2.3. Productivity and productivity management in construction process

2.3.1. Concept of productivity
The concept of Productivity is complex. In different research works and books it has been stated
that it could be interpreted in varied contexts depending on the objectives sought. The objectives
in turn determine the parameters involved in its assessment in relation to the benchmark used for
its comparison. [5]
Because of its central importance to competitiveness and world prosperity, the topic of
productivity has been a matter of interest since the beginning of industrialization. Productivity is
perhaps one of the most important and influential basic variables governing economic production
activities. While high productivity can be a significant source of competitive advantage for
companies, it also contributes to the general well-being of a society. Due to the size of the
construction industry, productivity trends in this industry have notable effects on national
productivity and on the economy as a whole. The increased pressure of global competition has
forced companies and authorities to put even greater emphasis on productivity improvements.
Widespread discussions have resulted in multiple interpretations of the concept of productivity;
despite the fact that the term is commonly used by both academics and practitioners, it is often
confused or used interchangeably with similar terms such as profitability and performance. [4]
Though the meaning of productivity is confusing it could not be difficult to understand that it
encompasses the notion of avoiding wastes through properly utilizing input resources, maximizing
out puts in usable form or quality with minimum competitive price that customers can afford it, make
maximum profit and job security of the workers can be insured with better income. By doing this, the
well being of the enterprises and the nation development can be maintained.
2.3.2. Definition of productivity
Productivity is defined by different professionals, academicians and institutes by relating the
input resources consumed with the output and/or service produced. According to Borcherding
Productivity is defined as a ratio between an output value and an input value used to produce the
output. Output consists of products or services and input consists of materials, labour, capital,

energy, etc. Drucker, argues that there is nothing as dangerous to an economy as a decrease in
productivities because it creates inflationary pressure, social conflict, and mutual suspicion. [2]
According to Bernolak productivity means “how much and how good we produce from the resources
used,” whereas The European Association of National Productivity Centres defines productivity as
“how efficiently and effectively products and services are being produced.” Efficiency in this context
can be seen as “doing things right” or utilizing resources to accomplish desired results. Effectiveness,
on the other hand, is often described as “doing the right thing”; it refers to the extent to which
customer requirements are met. [4]
The European Productivity Agency defined productivity as an attitude of mind. It is a mentality
of progress, the constant improvement of that which exists. It is the certainty of being able to do
better today than yesterday and continuously. It is the constant adaption of economic and social
life to changing conditions. It is the continual effort to apply new techniques and new methods; it
is the faith in human progress. [30]
The Building and Construction Sector Productivity Taskforce sees productivity at the macro-
economic level as an industry’s ability to convert inputs into outputs. In most of the research
works, generally productivity is described as a measure of how well resources are leveraged to
achieve set objectives or desired outputs. This is a definition that fits well with different
perspectives; it emphasizes creativity and innovation, which target achieving more outputs with
less resource, inputs by re-engineering the production or service delivery process and optimizing
the resource leverage. The benchmark for comparison is critically important because productivity
outcome in itself is meaningless except if it can be compared with a benchmark. The comparison
could be intra-entity - i.e. comparing productivity outcomes within a given entity across a time
period with a view to gaining insights into the implicit trend. It could also be inter-entities - i.e.
comparing productivity outcomes across similar entities with a view to determining the relative
levels of productivity of the entities at a snapshot or across a time horizon. [5]
Researchers and practitioners around the world have provided several contributions related to
improving the various aspects of construction productivity in research centers on many areas
related to construction productivity. These research centers include industry associations and
academic institutions in Australia, Nigeria, Thailand, Canada, United Kingdom, and the United
States of America and etc. Disregarding the differences in the definition of productivity it should
be the concern of everybody to talk about productivity so that output can be achieved smarter.

2.3.3. Productivity of Labour in Building Construction Projects

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. 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.” [33]
output
Labour Productivity = …………………..1
labour cost
Understanding critical factors affecting productivity of both positive and negative can be used
to prepare a strategy to reduce inefficiencies and to improve the effectiveness of project
performance.
Based on the definition and arguments made by different practitioners, academicians and
institutes it may be possible to characterize productivity as: [18, 19]
• Achieving more output for the same input
• Achieving the same output from less input
• Achieving much more output for slightly more input
• Getting slightly less output for much less input
Hence, since construction is a labour intensive industry particularly in the developing
countries, to maintain/improve the productivity of labour special attention should be given to
avoid factors that influence productivity of labour in construction projects.
2.3.3. Significance of productivity
Productivity growth has a great role on the prosperity of a nation and better living standards of
the citizens. This means that there is direct relationship between productivity and the living
standard of the people. Productivity growth is a crucial source of growth in living standards.
Productivity growth means more value is added in production and this means more income is
available to be distributed. It is one of the key factors affecting the overall competitiveness of a
company/organization. Productivity as a source of growth has moved to center stage in
analyses of growth of developing economies in recent years. Earlier, the focus was mainly on
the growth of capital, through greater mobilization of resources. As investment levels have
increased substantially in most developing countries and the scope for further increases
becomes more limited, attention has naturally turned to productivity improvements which offer

a complementary route to growth by getting more out of limited resources. To this effect,
productivity is discussed at all levels because of its direct relationship with the standard of
living of a people. At the level of an individual, it is rational to argue that, the standard of
living of any man is the extent to which he is able to provide himself and his family with the
things that are necessary for sustaining and enjoying life. The greater the amount of goods and
services produced in any economy or imported into such economy, the higher its average
standard of living will be. The higher productivity growth gives the following benefits [6, 16]
• Increased volume of outputs – create the ability to reach wider market.
• Reduced costs - Lower unit cost, more profit or more sales.
• Better service - Better delivery, better quality, better output, better benefits and higher
satisfaction of customers and stake holders.
2.3.4. Productivity analysis
The steps in the productivity management process include measurement, interpretation,
evaluation, choice of corrective or alternative improvement solutions, and implementation of
chosen solutions. Productivity analysis comprises the first three phases, figure.2. Measurement
involves selecting the appropriate measurement model or models, setting up the measurement
system, gathering of relevant data, and generation of performance results. Interpretation is
where tentative assessments are made based on the results produced by the measurement
model. The numbers and ratios resulting from a model yield nothing more than a set of
symptoms.
Evaluation leads to identifying the root causes of poor performance based on these symptoms.
The phase of implementation is primarily a managerial action and planning for the next cycle
of the process. Measurement involves the following tasks: [7, 8]
• Selection of appropriate measurement model or models;
• setting up the measurement system;
• Gathering of relevant data; and
• Generating of performance results.
The total number of productivity measurement techniques or models, used from the individual
level to the national level, can add up to a hundred or more. In literatures it is explained that in
the last 25 years, a number of schemes have been devised to measure productivity at the firm
level, so it is not easy to choose an appropriate model.

Interpretation
Evaluation
Measurement
Implementation Solution
Figure.1.3. Process of productivity management

Source: Expert systems applications for productivity analysis University of Texas Pan American,
College of Business Administration Mohan P. Rao.
The model selected, however, depends largely on the taxonomy or criteria one uses for
classification. Sink et al. developed a comprehensive taxonomy for the classification of
measurement models. Their classification uses two criteria to categorize models. If designed
properly, the task is well bounded and would not lead to combinatorial explosion. The task of
selecting models essentially involves symbolic processing. It needs the knowledge of and
familiarity with all models being considered. Such knowledge is not common in organizations.
Depending on the local expertise, there is a significant difference between the best and worst
selection, and it may take anywhere from a few hours to a few weeks to select a model. But the
task of selecting models is done infrequently. So once a model is selected, it can be used for a
long period of time. In general, total-factor models seem most applicable one. Once an
appropriate model is chosen, it should be set up for a given business unit. But once it is
developed, it could be used forever with little changes. That is, this task of developing a
measurement system is not done frequently.

2.3.4.1 Gathering of relevant data
Implementing a measurement model requires gathering any two of quantity, price, or value of
each input and output. Input data are categorized as material, labour, energy, capital, and
miscellaneous resources. Output data are categorized in the construction as buildings, roads,
dams etc. To measure the productivity performance of a particular period, the same type of data
is gathered for that period.
These data are then used in the model to obtain the productivity, profitability, and price recovery
contributions of each element and category in dollar terms.
The data required is dependent on the model chosen. The frequency of data gathering also
depends on the situation. Organizations may want to monitor performance monthly, quarterly or
yearly. The data may have to be collected manually or it may be available on a computer in a
proper format for the measurement system to use it. Once the data are fed into the measurement
system, the results should be computed by the system.
In summary, at the measurement phase, there is only one appropriate application – selecting
appropriate models. In this regard, a single factor productivity measurement is used as an
appropriate model based on money values.
2.3.4.2 Productivity measuring models
Productivity measurement is the quantification of both the output and input resources of a
production system. Productivity measurement models can be classified in many ways. Singh
classify them as index measurement models, linear programming-based productivity models and
econometric productivity models. Sink et al. classify them as: partial-factor, total-factor and
surrogate measures.
The intent of measuring productivity is to come up with a quantified monitoring index. The goal
of productivity measurement is productivity improvement, which involves a combination of
increased effectiveness and a better use of available resources. while productivity can be given
the sort of shorthand definition as the ratio between output and input, what productivity really is
as well as how it can be measured has always provoked a great deal of controversy among
experts. In essence, it can be said that the measurement of productivity is only simple
conceptually. In practice, however, both measurement of outputs and inputs involves aggregation
problem, and this problem alone has situated productivity measurement in the sphere of

complexity. For example, the question of how to aggregate different products that do not have
constant quality or characteristics constitutes the veil to be removed from output measurement.
In the same vein, the problem of how to aggregate the different types of inputs into a well
defined composite unit remains a critical one on the side of input measurement. [7, 9]
To solve output and input aggregation problem, particularly when heterogeneous inputs and
outputs are combined, some authors have suggested that inputs should be added up in ‘constant
price’ money values. The same thing should be done for output. The loophole/ambiguity in this
approach is that the resultant productivity index will be economic productivity and not physical
productivity, which, obviously, should convey more meanings to most of the users of
productivity measures.
Added again to the input measurement problem is the question of how to measure capital input.
Consequently, preference is often expressed for a single factor measure of productivity, and it is
common to see emphasis being placed on labour input. [7]
i. Measuring and Interpreting Partial Productivity
In practice, measurement in production means measures of partial productivity. In that case, the
objects of measurement are components of total productivity, and interpreted correctly, these
components are indicative of productivity development. The term of partial productivity
illustrates well the fact that total productivity is only measured partially. In a way, measurements
are defective but, by understanding the logic of total productivity, it is possible to interpret
correctly the results of partial productivity and to benefit from them in practical situations.
Typical models of partial productivity are: [12]
1. Single-factor productivity
2. Value-added productivity
3. Unit cost accounting
4. Efficiency ratios
Single-factor productivity refers to the measurement of productivity that is a ratio of output and
one input factor. A most well-known measure of single-factor productivity is the measure of
output per work input, describing work productivity. Sometimes it is practical to employ the
value added as output. Productivity measured in this way is called Value-added productivity.

Also, productivity can be examined in cost accounting using Unit costs. Then it is mostly a
question of exploiting data from standard cost accounting for productivity measurements.
Efficiency ratios, which tell something about the ratio between the value produced and the
sacrifices made for it, are available in large numbers. Managerial control ratio systems are
composed of single measures which are interpreted in parallel with other measures related to the
subject. Ratios may be related to any success factor of the area of responsibility, such as
profitability, quality, position on the market, etc. Ratios may be combined to form one whole
using simple rules, hence, creating a key figure system.
The measures of partial productivity are physical measures, nominal price value measures and
fixed price value measures. These measures differ from one another by the variables they
measure and by the variables excluded from measurements. By excluding variables from
measurement makes it possible to better focus the measurement on a given variable, yet, this
means a more narrow approach.
aggregate output
Single factor productivity = ……………....2
single input
A measure or index of aggregate output divided by the observed quantity of a single input thus
became the earliest approach to productivity measurement. This index-number approach based
upon the use of single or partial factor productivity measures has one unique advantage:
computational simplicity and feasibility save that the required aggregate labour input data are
available. The greatest shortcoming of partial factor productivity measures, particularly labour
productivity measures is its inability to identify the causal factor accounting for observed
productivity growth. For instance, substitution of capital for labour, the introduction of more
(labour) efficient vintage of capital, the realization of economies of scale and the employment of
better-trained manpower will all show up in an index of output per man-hour. Labour input itself
is also difficult to measure. For example, it is sometimes suggested that labour must be defined
and classified along the line of mental and physical efforts. It is fundamentally wrong to assume
homogeneity for labour when differences are evident in terms of sex, age and aptitude.

ii. Multifactor productivity
Multifactor productivity measures are designed to address this shortcoming of labor productivity
measures. The American Productivity and Quality Center developed multi factor productivity
measurement model, MFPMM, for measuring productivity and price recovery, and for explicitly
relating these results with profitability at the organizational/ functional levels as depicted in the
figure bellow. [6, 10]
Change in Chang in Chang in

output quantity revenue output price
Chang in Chang in cost Chang in price

productivity and cost (price
recovery)
Chang in input Chang in Chang in input

quantity profit cost
Fig.1.4 Nine basic components of the MFPMM.
The multifactor productivity measurement model (MFPMM) is a comprehensive and analytical

to measuring changes in productivity. This model uses the techniques to break the total variation
into price effects and productivity effects. The analyses can be done on both inputs and outputs
in more flexible forms. Therefore, the MFPMM offers a valid productivity model.
output output
Multifactor productivity = , , ………...3
material+labour material+labour+machine
iii. Total Productivity Measurement

Emerging literature on productivity measurement of late indicate that early productivity
measures revolve around the value of aggregate output per man hour of labour input despite the
problems associated with measuring labour input.
At the moment, productivity research has focused more on total factor productivity (TFP)
measures, where comprehensive aggregates of outputs and inputs are of interest. It is helpful to
note that production theory remains the basis for analyzing the factors that explain output level
changes. It is known from available literature that, the rate of output depends on three factors:
[25]
• The state of technology or kind of production process that is in use;
• The quantities and types of resources put into the production process; and
• The efficiency with which those resources are utilized
Arising from these three factors behind productivity changes are three possible explanations
for differences in total factor productivity. These are differences in productive efficiency, the
scale of production, and the state of technology, depending on the specific assumptions that are
made with respect to the production function and the market conditions.
total tangible out put

Total productivity = ………………………..4
total tangible input
Tangible inputs are as described below:-

• Human - Workers, Managers, Professionals, Clerical staff.
• Fixed capital - Land, Plant (buildings and structures), Machinery, Tools and
equipment, and others
• Working capital - Inventory, Cash, Accounts receivable, Notes receivable.
• Materials - Raw materials, Purchased parts
• Energy - Oil, Gas, Coal, Water, Electricity and etc.
• Other expense - Travel, Taxes, Professional fees, Marketing, R&D, etc.
Total tangible outputs are the following:-
• Value of finished units produced
• Value of partial units produced
• Dividends from securities
• Interest from bonds
• other income and
• Total tangible input

2.3.5. Interpretation
Interpretation is the phase between measurement and evaluation. It involves making tentative
assessments based on the numbers generated by the measurement model. [7, 8]
2.3.6. Evaluation
Interpretation, although useful, is just one step in the analysis. The numbers and ratios resulting
from a model yield nothing more than a set of symptoms. Evaluation leads to identifying the
real causes of poor productivity, price recovery, and profitability. To find the causes of
symptoms, evaluation requires interaction between the productivity analyst and the manager of
the profit centre. The answers are not obvious because they may depend on many variables
such as product-mix, volume, and resource-mix, any of which might have changed because of
a number of factors such as market conditions, employee morale, union problems, safety,
overtime, scheduling problems, and inventory problems. For a more accurate diagnosis, it is
often necessary to examine other performance measures such as effectiveness, efficiency,
quality, quality of working life, and innovation, because these measures influence productivity,
and thus the root problems that would be uncovered through productivity analysis. [7, 20]
2.3.7. Framework for Productivity Improvement in Construction
Productivity improvement in construction is best understood when the construction process is

visualized as a complete system as shown in Figure 4. The system is made up of the
construction project to which material; personnel, equipment, management, and money are
inputs. They are consumed by the system in the process of producing the construction unit.
Control of the system is achieved by collecting and processing information about the rates at
which production is attained.

Scheduling
Data Procurement scheduling
Collection Control
Site layout
Planning Handling
Materials
Management material
Practice timelines
Personnel Output
P-H System Production
unit
Construction
Management Process
Labour
Effectiveness
Equipment
Measure
productivity
P-H
Unit
Safety Physical
Environment
limitation
Motivation
Take corrective Feedback/control Compare

action/ control actual to
estimate
Figure.1.5. Framework for productivity improvement

(Source: National Research Council Canada 1993)
To improve labour effectiveness, various factors can be addressed, including motivation, job
safety, environmental factors, and physical limitations. Management practices include
scheduling, planning, data collection, job analysis, and control. Material timeliness is ensured by
proper procurement scheduling, site layout, and other issues. [29]

2.4. Factors Affecting Labor Productivity

Labour productivity is one of the least studied areas within the construction industry.
Productivity improvements achieve higher cost savings with minimal investment. Due to the
fact that profit margins are small on construction projects, cost savings associated with
productivity are crucial to becoming a successful contractor. [24]
There are many factors that affect the productivity of labor in construction. These are
generally set forth in publications or manuals made available through associations like the
Mechanical Contractors Association of America (MCAA) and other organizations. [17, 21]
1. Overtime
Scheduling of extended work days or weeks exceeding a standard eight-hour work day or 40-
hour work week lowers work output and efficiency. The most frequently stated reasons are
fatigue; increased absenteeism; decreased morale; reduced supervision effectiveness; poor
workmanship, resulting in higher rework; increased accidents. Working overtime initially
result in increased output, but continuing overtime may lead to increased costs and reduced
productivity. Time used by a construction laborer on productive activities averages about
30% of the total time available.
2. Morale and Attitude
Spirit of workers based on willingness, confidence, discipline, and cheerfulness to perform
work or tasks can be lowered due to a variety of issues, including increased conflicts,
disputes, excessive hazards, overtime, over-inspection, multiple contract changes, disruption
of work rhythm, poor site conditions, absenteeism, unkempt workspace, and so on.
3. Fatigue
Fatigue can be caused by prolonged or unusual physical exertion.
4. Stacking of Trades
This occurs when operations take place within physically limited space with other
contractors, resulting in congestion of personnel, inability to use or locate tools conveniently,
increased loss of tools, additional safety hazards, increase visitors, and prevention of crew
size optimum.

5. Joint Occupancy
This occurs when work is scheduled utilizing the same facility or work area that must be
shared or occupied by more than one craft, and not anticipated in the original bid or plan.
6. Beneficial Occupancy
This is a result of working over, around, or in close proximity to other crafts, owner’s
personnel, or production equipment, which may cause noise limitations, dust, or other
hazardous risk. This may also prevent or cause access restrictions.
7. Concurrent Operations
This is the effect of adding operations to any sequence of operations that has already been
planned, without a gradual and controlled implementation of additional operations.
8. 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
labor 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.
9. 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.
10. 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.
11. 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. Stop-starts can have an impact on
productivity and cost of a project. Work scheduled or reassigned during holidays such as

Thanksgiving, Christmas, New Year’s, and so on 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.
12. 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.
13. 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.
14. Crew Size Inefficiency
This is when the optimal crew size is altered by adding or deleting crew members. When
workers are added or deleted from a crew, it breaks up the original team effort and rhythm of
the crew and results in loss of productivity.
15. Site Access
This is a result of interferences to the convenient or planned access to work areas. This can
be due to blocked stairways, roads, walkways, insufficient man-lifts, or congested work sites.
16. 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
then 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.
17. Security Check
This could be caused by workers entering or leaving the area or from “bras sing” in and out,
toolbox checks, transport of labor to secure area, and so on.
18. 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.
19. Ripple Effect

This is caused when changes in other trades’ work then affects other work, such as the
alteration of schedule.
20. Confined Space
When work is in a confined space with limitations on egress and ventilation, this can result in
nonproductive labor to provide hole watch, along with other issues. Time is also lost when
getting to and from the work area.
21. 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.
22. 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.
23. 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.
24. Shorter Daylight Hours
Delays can cause work to be deferred from one time period to the next, which may involve
seasonal changes. Different regions and locations around the world also have different
amounts of daylight hours, depending on the season.

25. 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.
26. Rain
Most crafts do not work in the rain, but many do, especially those who live in wet regions of
the country and must work or risk losing too much in wages. Work can, and does occur in the
rain, but not without inefficiencies due to rain gear, visibility, safety, morale, discomfort,
hazards, and other issues.
27. 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.
28. Working in Operating Area
Inefficiencies can result when work is in close proximity to operating units such as heat from
boilers, smoke from emissions, explosion zones, and so on. This can cause work stoppages,
need for protective clothing, work permits, or other requirements.
29. Over-manning
This is caused when work planners hire too many workers for the estimated work scope and
duration. Sometimes, when labor in certain areas or regions is scarce or hard to get, 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
30. 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.
31. Area Practices
This can be the result of added or extended coffee breaks, unique observance or custom, or
other practices unique to the craft, owner, country, project location, or other customary
practices in the area.

32. Proximity of Work

This is caused by working in a remote area, proximity of tools, break areas; material lay
down yard, or other resources causing a loss of time for access.
33. Alternating, Staggered, or Rotating Work Schedules
This usually results in unusual or unique scheduled work periods designed to optimize craft
hours worked, attract labor to remote sites, compete for labor 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 week and then take a week off.

Chapter Three the Status of Construction Industry in Ethiopia
3.1. The Ethiopian Construction Industry
According to the fifth annual report on the Ethiopian Economy published in March 2007 by
the Ethiopian Economic Association, “unemployment challenges and prospects” being its
thematic issues. In the report, the Current State of The Construction Industry has been chosen
to be the thematic issue. [27] According to the report of EEA the construction Industry has
been identified as a thematic issue owing to a variety of considerations: first, the issue is
timely; second the industry has been registering remarkable performance in recent years; and
third, despite its importance in the overall economy, it has not been assessed
comprehensively to a level that enables one to understand the industry and make policy
recommendations. The country’s huge infrastructure expansion and urban centers’
remarkable building construction activities provided an opportunity for taking up the issue
for further analysis. According to the report since there was lack of sufficient information on
the industry, it was not allowed an in-depth analysis of the issue to the required level. In
addition, lack of time series historical data on the industry had also limited comparisons over
the years. With these limitations, the report attempted, to the extent possible, to depict the
trends and provide a comprehensive analysis of the industry.
ị Contribution to National Income
According to the report of the Ethiopian Economic Association, the construction industry has
important contributions to the Ethiopian economy, as demonstrated by its share in the GDP.
For instance, the share of the sector in the total GDP averaged at about 5.2 percent in the
period 2002/03- 2006/07. The sector has registered relatively higher growth as compared to
the growth of GDP during this period. Over this period, there has been increased investment
on the development and expansion of various infrastructure projects like roads, airports and
residential and non-residential housing units. Since then construction is continuing in
addition to building, roads, and airport constructions, in the construction of mega
construction projects like the Ethiopian renascence electric power generating dam,
construction projects in Sugar Corporation, city railway constructions and ethio-djibuty
railway construction, water and city drainage system construction etc.

ịị Contribution to employment
The role of the construction industry in terms of creating employment opportunities
especially in urban areas is becoming visible. According to the 1999 Labour Force Survey
(LFS), of the total employed persons in the country which was estimated at around 25
million, 0.9 percent was estimated to be in the construction industry. The contribution of the
industry in terms of creating employment has slightly improved over the years. For instance,
according to the 2005 LFS, of the total employed population in the country (31.4 million),
1.4 percent was estimated to be in the construction industry. On the other hand according to
the data obtained from ministry of urban development and construction in 2011/12 the
number of employee in the construction industry was 342,276.
ịịị Contribution to government revenue
The construction industry also contributes to the generation of revenue for the government.
The rental income tax is one of the major revenue sources within the construction industry to
the government. The rental income tax which was Birr 15.2 million in 1997/98 has increased
to Birr 78.3 million in 2004/05 but lowered to Birr 32 million in 2005/06 generating nearly
half a percentage point of the total government revenue in the period 1997/98- 2005/06(see
Table 3.1).
Table 3.1: Rental income tax and total tax, in million Birr
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04
2004/05
2005/06
Description
Rental income tax 15.2 16.2 51 48 46 52 53 78 32
Total tax revenue 5261.2 5591.6 6482.8 7440 7928 8243 10520 12398 14122
Total Domestic 8400.2 9453.2 10147.9 10577 10478 11150 13186 15592 19493
Revenue
(Source: Computed based on data obtained from MoFED.)

Though there are many other direct and indirect revenues that are generated from the
construction industry, the paucity/scarcity of data has limited the report of the EEA to indicate
the total revenue that is generated from the construction.
ịv Multiplier effect
According to the EEA 2005/6 report empirical researches support the strong linkages
between the construction industry and other economic sectors. For instance, Park quoted in
Raufdeen Rameezdeen has confirmed that the construction industry generates one of the
highest multiplier effects through its extensive backward and forward linkages with other
sectors of the economy. The World Bank as quoted in Raufdeen Rameezdeen also argues that
the importance of the construction industry stems from its strong linkages with other sectors
of the economy.
Up to 2005/6, Since Ethiopia doesn’t have an input- output table that would help depict the
inter-sectoral relationship; it would be difficult to determine the industry’s linkages with the
rest of the sectors, namely; agriculture, industry and services. [26]
3.2. Labor Productivity in the Construction Industry
Value added per person engaged in construction activity (a proxy for labor productivity) can
also be used as another indicator of efficiency. As shown in Table 3.2, labor productivity
according to the 1999, 2005 and 2008/9 Labour Force Surveys was only Birr 11600, 12000
and 22,800 per person per year. As noted above, this attributes to all factors, and what is left
for wages and salaries is quite small, indicating the low productivity, hence inefficiency in
construction.
Table 3.2: Labor productivity (value in ‘000 Birr)

No. Description 1999 2005 2011/12 Census VA
1. VA constant market price 2,641,471.8 5,352,933.3 7,813,107.3
2. Employment in the 228,500 445,600 342,276
Construction industry
3. Value Added per Employee 11.6 12 22.8
Source: MoFED and CSA, 2000 and 2006 Labor Force Surveys

According to the EEA report of 2005/6, moreover, compared to low income countries
average, it is quite too small. For instance, as noted in a study made in 1998, construction
output per employee in Ethiopia was only US $994.9, while the corresponding amount for
low income countries average was as high as US $8507, which is nearly 10 times greater.
According to the report, the fact that construction in Ethiopia is largely labor intensive, might
contribute to this extreme low productivity.
3.3. Construction Contractors in the Ethiopian Construction
A contractor is defined as a company, or a person with formal contract to do a specific job,
supplying labour and materials. According to Ministry of Works and Urban Development
found in the report of Ethiopian Economy Association contractors in Ethiopia are categorized
into four major groups including: [27]
• General Contractors,
• Building Contractors,
• Road Contractors, and
• Specialized Contractors.
In addition according to the data obtained from Ministry of Urban Development and
Construction of year2011/12, others, is another category of fifth group construction category.
As per the Ministry of Works and Urban Development, a General Contractor is a contractor
that is allowed to engage in any types of construction contract works, a Building Contractor
only in building construction, a Road Contractor involves only in road construction, and A
Specialized Contractor in a special construction works other than those mentioned above
such as water works, airport field construction...etc.
Based on the data acquired from the Addis Ababa Bureau of Trade and Industry
Development the total licensed contractors in the city is 13, 557 as of June 2006. Out of the
total contracting firms about 60% or 8,140 are general contractors and about 38% or 5,189
are building contractors. The number of specialized contractor and road contractors is
insignificant contributing 1 % and 0.69% to the total number of contractors in the city
respectively (see table 3.3). But according to the data found from Ministry of Urban
Development and Construction as of year 2011/12, the numbers of construction contractors
are 2112.

As can be seen from Table 3.3 most contractors are small in size. About 36% registered
capital between Birr 5001- 20,000 and 35% Birr 5,000 and below. Overall the two
categories of firms account about 71% of the total contracting firms licensed by the City
administration. Those firms who registered capital Birr 200,000 and above account only
about 6% of the total licensed firms in the city.
Table 3.3: Numbers of Contractors Licensed By the City Administration by Type and
Capital as At June 2006.
Birr
Birr 5000 Birr 5001- Birr 20,001 200,000 Total %
Type and below 20,000 - 200,000 and Number Share
Above
Building contractor 1833 1843 1163 350 5189 38.28
Road contractor 36 29 20 8 93 0.69
General contractors 2791 2963 1905 481 8140 60.04
Specialized Contractors 55 37 29 14 135 1.00
Total 4715 4872 3117 853 13557 100.00
% Share 34.78 35.94 22.99 6.29 100.00
Source: Bureau of Addis Ababa Trade and Industry Development, 2006(Unpublished).
According to the data obtained from Central Statistics Agency of year 2008/9 the numbers
of contractors are 1384. And according to the data obtained from the ministry of urban
development and construction in 2011/12 the number of contractors are 2112. As per the
regulations of the Ministry of Works and Urban Development all types of contractors are
categorized into ten grade levels (see table 3.4).

Table 3.4: Number of Licensed Contractors by Grade Level In 2006
Grade Building Road General Specializes Total contractor

contractor contractor contractor contractor
No. % No. % No. % No. % No. %
Grade 1 224 4.32 7 7.53 93 1.14 0 0 324 2.39
Grade 2 20 0.39 0 00.00 8 0.01 0 0 28 0.21
Grade 3 298 5.74 12 12.90 85 1.04 0 0 395 2.91
Grade 4 443 8.54 18 19.35 53 0.65 0 0 514 3.79
Grade 5 1029 19.84 5 5.35 420 5.16 49 36.3 1503 11.09
Grade 6 921 17.75 15 16.13 2885 35.44 12 8.89 3833 28.27
Grade 7 987 19.02 22 23.66 2501 30.72 16 11.85 3526 26.01
Grade 8 936 18.04 9 9.68 1812 22.26 33 24.44 2790 20.58
Grade 9 306 5.90 0 00.00 252 3.10 6 4.44 564 4.16
Grade10 25 0.48 5 5.38 31 0.38 19 14.07 80 0.59
Total 5189 100.00 93 100.00 8140 100.00 135 100.00 13557 100.00
Source: Bureau of Addis Ababa Trade and Industry Development, 2006(Unpublished)
3.4. Background of the Case Enterprise

Defense Construction Enterprise is one of public construction enterprises in the Ethiopian
construction industry. The enterprise is re-established as a construction enterprise in 2003
E.C. as the result of the study of BPR in the Ministry of National Defense. The enterprise is
re-established by splitting the construction part of Kality Construction and Construction
Materials Production Enterprise and merging with Defense Construction and Engineering
Enterprise as grade one general construction enterprise to give a one window service.
The same as to the establishment of other former defense construction enterprises such as,
Lalibela Engineering and Construction Enterprise, and Norela Construction Enterprise,

Defense Construction Enterprise is re-established primarily for the purpose of fulfilling the
construction demand of the ministry of national defense. In addition to this, the enterprise is
involved in other construction works taking agreement with other government institution and
regional government in the place where there are harsh weather condition and high security
problems.
The head office of Defense Construction Enterprise is situated in Addis Ababa, Kirkos
District, around the place where informally called Welo Sefer. The involvement of the
enterprise in the construction is divided in to two main streams: one in the building
construction and second is in road and irrigation & dam construction works.
In the building construction, the enterprise is involved in the construction of apartments for
the military members, hotels, swimming pools, moles, zoo building, military staff colleges,
office buildings, public schools construction and etc. negotiating with different national
defense departments/regiment and other government institutions in Addis Ababa, Mekele,
Shire, Bahir Dar, Dire Dewa, Debre Zeyt/ Bishoftu towns and in other areas/regions of the
country as well. By doing this, Defense Construction Enterprise is playing its role in adding
good facilities for ministry of national defense and other government institutions. In addition
the enterprise is playing its role in the process of transformation of the cities into
modernization which is part of the activities of the government working for changing cities
and towns into modernization. On the other hand the enterprise is taking its part in creation
of job opportunities in all regions of the country where the enterprise is conducting
construction works.
Second, the enterprise has been involving in road and irrigation & dam construction sector.
Out of the road, irrigation and dam construction works the enterprise has been involving are:
Agula Berhale road construction, Mekele Towon internal road construction etc., Wikro
Grindaho Dam construction, Tendaho Irrigation Dam construction and etc. are some of the
road, irrigation & dams construction, which are under the construction of Defense
Construction Enterprise works. By doing this the enterprise has shown the thought that
defense can play a development role in the country in addition to protecting the sovereignty/
territory of the country. Besides, the enterprise has built trust on peoples and involved them
to participate on the construction work in the enterprise. By constructing new roads,
irrigation & dams in the regions where there were no significant infrastructures before, the

enterprise has made the people benefited from the construction work through employment
and from the final outputs. By doing with the enterprise many subcontractors and piece rates
became milliners who.
3.5. Construction process of defense construction enterprise
As a system the business process reengineering has been implemented as it was highlighted
in section 3.1. So the construction flow process had set as the stated procedures in the studied
business process reengineering system. As construction is unique in its nature it requires the
participation of many parties from inside of the enterprise and from external. The participants
of the process are the project teams, subcontractors, consultants and supervisors, supportive
staffs, customers or project owners and other stakeholders. The enterprise’s construction
core process high level map is depicted in fig. 4 bellow [24]
The high level map represents the construction work flows of the enterprise based on the
system developed as a result of the study of BPR. As continuous improvement process the
enterprise is working with different performance improvement techniques such as
performance related payment in addition to BPR to increase performance of the enterprise.
The enterprise main business sectors/processes are:
A. Building construction sector/process
B. Road, irrigation and dam construction sector/process.
Even though Defense Construction Enterprise is involved in both building and road,
irrigation and dams constructions, due to the unique nature of construction process of these
two sectors this study focuses specifically on labour productivity of the building
construction.

Construction
demand
Assess the construction document and prepare quotation

and make agreement
Organize the project and begin the construction work
Resource mobilization and continue construction process

and follow up the process
Completing the construction process and make primary

acceptance
Complete maintenance work and make final acceptance
Satisfied customer
from constructed
outcome
Figure.3.1.The enterprise construction process high level map

Source: adapted from defense construction enterprise construction process high level map,
BPR document
The main construction processes of building construction after receiving construction design and
the necessary manpower and resources including site are: site clearing, site facility preparation,
excavation and cart away process, bar bending and tying, formwork preparation, footing
casting/mat slab casting, floor (or slab work) and beam casting, collon casting, wall or partition
work using hollow block (HCB) lying, plastering, steel structure work, site work and finishing
works are most of the process among building construction processes. The construction process
flow is show in the figure 3.2.

Site facility
preparation
Excavation and
Site clearing cart away

Casting of footing
and process
mobilization or mat slab and
Bar bending beam
process
Formwork
preparation
Plastering
Colon casting
HCB lying
Fixing of Back fill work

doors and
windows
Roofing and ceiling

work
Glazing work
Completed
building
facility
Steel
structure Finishing works
Fig.3.2. Construction process flow

A. Site clearing
Site clearing is the process of demolishing any existing building, plantations or any other
barriers which are obstacles for the construction work.
B. Site facility preparation
This is the process of preparing offices, temporary cafeteria, sanitation houses where the
work forces get or give the necessary services during the construction process.
C. Excavation and Cart Away Process

After the site is cleared, the process of excavation of bulk soil will be dug using
excavators/man and disposed using dump trucks away from project site.
D. Bar Bending and Tying

This is part of the structural work which is the process of cutting, bending and assembling of
bars according to the given specification in the design. Here bars of different diameters are
bended which is used for reinforcement purpose.
E. Formwork Preparation
Form work is fabricated from timber or sheet metal reinforced by bracings. It uses as mould
for keeping fresh concrete from out flow from the specified area during casting until it is
cured.
F. Casting of Footing
After the form work is prepared the assembled reinforcement bar is placed appropriately
based on design. Then, fresh concrete prepared onsite using own mobile mixer or by sub-
contractor using batching plant, transported using truck mixer and poured in to the prepared
formwork using concrete pump or labour to cast the footing/mat slab. Casting of footing is
made if the design of the building requires.
G. Floor (Or Slab Work) and Beam Casting

This is a structural work which is performed after the formwork and bars bending and tying
process is completed. It is the process of pouring fresh concrete in to the prepared formwork
so that the building’s floors and beams are casted.

H. Colon Casting
This is the supporting structure of a building which is casted by preparing reinforcement bar
and formwork and pouring fresh concrete in to the form work. The shape of the colon can be
circular or rectangular form depending on design. In the process, the steel structure, the form
work and concrete casting process are performed using manpower.
I. Wall or Partition Work
Here the wall of building is constructed using hollow blocks or shear wall based on design
and specifications. The type of hollow block can be of grade A, B or C and of size 10/15/20
x20x40cm based on the specification of bill of quantity in the design.
J. Plastering
After hollow block is lied according to design, a 2.5cm thick plastering work is performed on
both sides of building wall based on design using cement and sand.
K. Fixing Doors and Widows
This can be manufactured on site or purchased from sister factory and fixed by the
manufacturer or subcontract. Doors can be wooden, LTZ steel structure, aluminum imitation,
PVC or aluminum structures based on specifications. Windows also can be made of steel
LTZ, PVC, aluminum or aluminum imitation based on specifications in the design.
L. Glazing
Glazing is a process of fixing different featured glass half or fully on window or doors based
on specification in the design.
M. Steel structure work
The steel structure work includes the fabrication of truss and purlin or lattice purlin and hand
rails using steel hollow sections and flat strips and painted with antirust. The manufactured
steel structure then fixed on a building as per design.
N. Roofing and Ceiling work
Roofing is the process of covering the top of the building using EGA roof covering or
concrete when building height is completed. While ceiling work is performed after a roof is
covered so that roof structure is covered using chip wood and omega section.

O. Finishing
Painting, fixing of different fixtures, terrazzo tiling, skirting and polishing are among the
process of finishing.
3.6. Input raw materials
Defense construction enterprise is constructing different types of buildings such as hotels,
apartments, office buildings etc in its building construction department. The major raw
materials used for building construction works in the enterprise are listed as follows:
- Cement, Sand, Aggregates of different sizes (00, 01, 02)
- Reinforcements of different diameters (6, 8, 10, 12, 14, 16 etc.)
- Electric and sanitary pipe lines
- Electric and sanitary fixtures
- Formworks
- Fresh concrete
- Structures: truss, purlin, doors and windows, handrail
- Terrazzo and/or plastic tiles
- Water proofing
- Glazing materials
- Paintings
- Roofing etc.
In year 2006 E.C. the enterprise has got eighteen building construction projects in Addis
Ababa, Bahir Dar, Bishoftu, Dire Dawa, Mekelle and Shire towns with its head office
situated in the capital of Addis Ababa. Its organizational structure is: Board of Director at the
top, the General Manager and the management staffs in the enterprise, and projects.

Chapter Four Data Collection, Data Analysis and Interpretation
4.1. Data Collection, Analysis, Results and Discussions

This survey is conducted by taking four sample projects from Addis Ababa city, a project
from each of the following towns; Debrezyt/Bishoftu town, Dire Dawa and Bahir Dar towns
so that a representative data can be found for the building construction sector of the enterprise.
From the survey response, out of a total of 75 initial invitations, around sixty usable responses
were received by the cut-off date; this represented about 80 percent usable response rate.
Out of the sixty usable responses about 73% are from project site staffs, 27% are from the
enterprise head office staffs. On the other hand about 40 daily labours have been invited
initially and thirty three usable responses were received at the end of the cut-off date which
represents a usable response rate of about 83 percent. Out of the thirty three usable responses
about 52% percent is from the city of Addis Ababa and Bishoftu town and the rest response is
from Dire Dawa and Bahir Dar town which is 48%. Based on the survey results obtained, the
feedback is therefore biased towards the construction projects in Addis Ababa & Bishoftu and
construction projects out of Addis Ababa.
.
1.7%
18.3%
11.7%
46.7%
21.7%
Figure.4.1. Demographic profile of respondents by experience

The demographic profiles of the respondents as in figure 4.1. showed that 46.7 percent – had
work experience of not more than five years, 21.7 percent - of the respondent has an

experience of six up to ten years, and 11.7 percent - have working experience between ten up
to fifteen years of working experience and 18.3 percent of the respondents have a working
experience of more than 15 years of experience in the building construction work. And their
academic status is shown in table 4.1.
Table.4.1. Academic status of the respondents
Cumulative
Frequency Percent Valid Percent Percent
Valid Certificate and Bellow 8 13.3 13.6 13.6
Diploma 11 18.3 18.6 32.2
First Degree 31 51.7 52.5 84.7
Second Degree and 9 15.0 15.3 100.0

Above
Total 59 98.3 100.0
Missing 0 1 1.7
Total 60 100.0
As it is shown in table 4.2 more than 30 percent of the respondents are occupied high ranking
positions in the enterprise as general manager, building construction core process manager,
building construction plan, project follow up and control team leader, project managers,
building construction engineers, and etc., about 45 percent of the respondents are
professionals as office engineers, cost estimates, building construction site engineers, and etc.
the rest about 23 percent of the respondents are administrational persons. The survey also
includes daily labours who have been working in the enterprise at least for a year. The
feedback is therefore included from high occupational position who have the authority to
make important decisions about productivity improvement in the enterprise and those

professionals, technical persons and daily labours that have high contribution towards
productivity improvement process in the enterprise.
Table.4.2. Current occupational position of the respondents
Cumulative
Frequency Percent Valid Percent Percent
Management 18 30.0 31.0 31.0
Professional 25 41.7 43.1 74.1
Technical/Operation 2 3.3 3.4 77.6

al
Administration 13 21.7 22.4 100.0
Total 58 96.7 100.0
Missing 0 2 3.3
Total 60 100.0
This adds to the quality and reliability of the feedback, because the finding could be
generalized in the data points due to the representation of the target populations in the
enterprise even though the survey could not include construction projects which are
constructed in Mekele and Shire towns in the tigry region.
4.1.1. Key constraints of labour productivity in the Case enterprise
During the pilot interviews, the most frequent problems mentioned by the interviewees as key
constraints of labour productivity in the enterprise were insufficient use of technology, project
characteristics, and project management, coordination problems, lack of skill and experience,
capacity problem, rework, commitment problem, labour turnover, condition of equipment in
use, resource supply problems are some of the problems. The problems of subcomponents of

each category are listed in the figures bellow. Totally, thirty seven factors were identified in
the seven broad categories constraints see figure (4.2 and 4.3).
Internal Constraints
C. Management related D. Technology

B. Work force related constraints
A. Characteristics related constrains
constraints
of the project - Level of management - Use of machineries
- Level of skill and commitment
- Site conditions: and equipment on
experience of work force
access, subsoil; construction project
- Level of labour - Material shortage at
topography involvement project site/delay - Employed
-Project complexity - Rework problem due to - Project budget machinery and
-Build ability issues construction error shortage/delay equipments
- Relationship among - Project leadership
condition
labours for coordination style
- Workforce absenteeism - Work stop due to late - Inadequate IT
- Level of staffs turnover payment of labour infrastructure and
- Health of the workforce force application in
- Level of familiarity - Incentive mechanism enterprise
with current job and employed
conditions - Adequacy of
- Level of work force planning and risk
moral management process
- Proper coordination
and execution follow
up and control
- Management relation
ship
- Excess/insufficient
manpower
- Project team
competency problem
- Underestimating
project cost
Figure.4.2. Internal constraints to building construction labour productivity

External constraints
A. Unforeseen constraints C. Other external constraints

- Stop work order because B. Consultant’s related - Local legal issues
of site accident constraints
- Lack of consultant’s site - Contractual problem
- Inflation/ Fluctuations in
labour, materials, etc. staffs experience causing - Right of way
- Poor weather unreasonable insistence on
condition፡- high rain; compliance to specification
high wind, heat, without due regard for
humidity, cold practicality or site condition
- Incomplete Design/delay
- Slow response of
consultant’s site staffs
attending to inspection work
- Consultant’s slow payment

certificate verification
Figure.4.3. External constraints to building construction labour productivity
At the questionnaire survey stage, the relative levels of impact of the broad categories and the
subcomponents in each set were rated by the respondents to determine the significant and non-
significant factors that have greater impact on productivity of labour. The results in Table.4.3
show the most significant factors under each broad category; the analyses are made in the
following subsections under each broad category. The method used for analysis is the likert scale
and is shown in the annex.

Table.4.3. Subcomponents having the highest level of impact on productivity under the
respective broad categories in the enterprise
No. Broad category of constraints Subcomponent constraint having the highest level
of impact on labour productivity
Internal constraints
ị Site conditions: access, subsoil; topography
characteristics of the project
ịị work force related constraints Level of skill and experience of work force
Level of staffs turnover

ịịị management related constraints Material shortage at project site/delay
ịv technology related constraints Employed machinery and equipments condition
External constraints
ị Poor weather condition፡- high rain; high wind, heat,
unforeseen constraints
humidity, cold
ịị consultant’s related constraint Incomplete Design/delay
ịịị other external constraints Contractual problem
right of way
ị Project Characteristics related Constraints
Analysis of the subcomponents under project characteristics set of constraints is presented in

Table 4.4. Results show that Site conditions: access, subsoil; topography have the highest level
of impact on labour productivity. In this regard if the site condition has lack good access and is
not comfortable for free movement on project/site, it could slowdown the project work progress.
But according to the building construction core process manager, and the data obtained from the
annual report of the enterprise (from year 2003 up to 2006) site condition constraint didn’t
considered as constraint as productivity influencing factor even though it is rated higher in the
broad category of project related characteristic constraints from the respondents during
questioner.

Table.4.4. Productivity constraints related to project characteristics
Level of Impact
No. Very Very
high High medium low low
Characteristics of projects
related constraints:
1 Productivity issues arising 5 4 3 2 1
TR MR
from:
% % % % %
Significant
Site conditions: access, 57 2.5
1.1 subsoil; topography
5.30 14.00 28.10 35.10 17.50
1.2 Project complexity 1.70 10.30 24.10 43.10 20.70 58 2.3

1.3 Build ability issues 3.60 14.30 17.90 41.10 23.20 56 2.3
Note: TR = Total responses; MR = Mean rating
So, due to these reason this result wasn’t considered as constraint of productivity of labour in the
enterprise in this research work and as the same time the result of the respondent is at the lower
limit of the likert re-scale threshold (see from the annex).
ịị Workforce Constraints
Table.4.5 represents the analysis of the relative levels of impact of the sub-factors under the
workforce broad category of labour productivity constraints. Level of skill and experience of the
workforce is rated as the subcomponent having the highest level of impact on labour
productivity. This result is consistent with some earlier findings of Alinaitwe, Mojahed and
Aghazadeh, Serdar Durdyev and Syuhaida Ismail that the level of skill and experience of the
workforce is the key determinant onsite labour productivity and performance. This result also
agrees with Henriod’s conclusion that a happy team and improved work attitude can result in
tremendous improvement in labour productivity. Henriod opines that high level of workforce
motivation and commitment can be achieved through job security, effective reward system,

culture of openness, trust and devotion or loyality and the involvement of the people at the
coalface or stratum in the decision making process.
The root cause of this constraint in the enterprise is because such an experienced and skilled
workforce is not available in the market since the market demand is very high for such an
experienced work force. On the other hand since there is professional turnover in the enterprise it
was also difficult to create such experienced and skilled workforce. The next most influencing
factor in the workforce related broad category is the level of staff turnover.
Labour Turnover
Before going to discus about the root cause of labour turnover let’s see what was described by
different professionals about what labour turnover is. According to Ahuja, labour turnover is
defined as the relationship between the number of persons joining the organization and leaving
due to the resignations to the average number on the payroll. In the other way Labour turnover is
defined as the cessation or termination of membership in an organization by an individual who
received monetary compensation from the organization. According to Kamukama, labour
turnover is the rate of displacement of personnel employed in an organization. He further said
that a higher turnover is a sign of instability of labour, and labour turnover is expressed as the
ratio of the number of persons leaving the company in a period to the average number on the
payroll. According to Shelley, defined Labour turnover as employees who voluntarily leave their
jobs and must then be replaced. He added that turnover is shown as an annual percentage, so if
25 people leave a company with 100 people, that is 25 percent turnover a year, and he also said
employees often leave companies for higher pay elsewhere, but many other factors contribute as
well, and the negative effects of employee turnover should motivate managers to increase
retention.
According to Bwire, there are two categories of labour turnover depending on the circumstances
that is to say; voluntary labour turnover refers to the employees leaving the organization due
to retirement quits, resignations and death. And involuntary labour turnover on the other hand
is where the employees are forced to leave the company against their wish.

Table 4.5 Productivity constraints related to workforce
Level of Impact
Work force related productivity

Very Very
constraints arising from:
No. High High Medium Low Low TR MR
5 4 3 2 1
2 % % % % %
Level of skill and experience of work
2.1 force 8.5 20.30 39.00 25.40 6.80
59 3.0
2.2 1.70 22.40 43.10 22.40 10.30 58 2.8

Level of labour involvement
Rework problem due to construction
17.20 34.50 22.40
2.3 error 6.90 19.00 58 2.5
Significant
6.80 6.80 28.80 45.80 11.90
2.4 Level of work force moral 59 2.5
6.90 25.90 39.70 15.50 12.10 58 3.0

2.5 Level of staffs turnover
2.6 3.40 0.00 27.60 51.70 17.20 58 2.2
Workforce absenteeism
2.7 Health of the workforce 0.00 1.8 12.3 47.4 38.60 57 1.8
Level of familiarity with current job

1.80 5.30 29.80 43.90 19.30
2.8 and conditions 57 2.3
Relationship among labours for
0.00 7.00 33.30 42.10 17.50
2.9 coordination 57 2.3
According to the result of exit interview obtained from the annual reports of the enterprise (from
year 2003 up to 2006 E.C.) and the interview made with the building construction core process
manager, the major cause of staff turnover in the enterprise are seeking better payment, seeking
better working environment, due to limitation to practical exposure on project work seeking
practical exposure for better experience, instability due to the vast job opportunity in the market.
According to the result of the analysis of table 4.12 this result is also supported by the response

of project workmen who are working as contract and daily workers. Different researchers have
found different causes for turnover. For example, Clint notes that the prospects of getting higher
pay elsewhere leads to turnover. He further said that this is one of the most obvious contributors
to turnover. However, Stewart, found out that there is evidence that money is often not the root
cause of turnover, even when it is a factor in an employee's decision to quit. Mullins on the other
hand asserts that labour turnover arises because of various factors including dissatisfaction with
job, low rate of wages and salary, unsatisfactory working conditions, and non availability of
adequate basic facilities. According to the data obtained from human resource management of
the enterprise, the three consecutive fiscal years, 2004, 2005 and 2006 E.C., work force turnover
is 12.29%, 14.28% and 16.10% respectively.
Other constraints which are rated higher impact on labour productivity are rework problem due
to construction error, work force morale and level of workforce involvement. The root causes of
rework are due to capacity of workmanship and lack of continuous and serious supervision. Even
though the system of measuring the value added by a workforce or performance measurement
was developed in the enterprise as the result of the study of BPR, the measurement wasn’t
continuous and maintained in such a way that it could explain the state of the workforce. If
proper measurement activity was maintained and effective motivational activities was
experienced in the enterprise the morale of the work force can be made to develop or became
higher because they feel as recognition were given to the value they added in the enterprise.
ịịị Management characteristics constraints
With the highest MR value of 3.2 listed in Table 4.5, lack/delay of material supply problem set
of constraints was found to be the most influential factor on project labour productivity under
management constraints group. This result is also supported by the respondents of workmen
involved as daily labours or contract workers at projects (see result of table 4.5 and 4.12).
This result is coincident with the finding of different researchers like Kaming, in Indonesia, Iran,
Zakeri and Nigeria, Olomolaiye that lack of materials found to be the most critical construction
delay factor. In the same way, this result is supported by the result of the study of central
statistics agency of Ethiopia that is carried on in 2008/09 and published in 2010 which was found
that 59 percent of construction enterprises reported construction delay was by shortage of
materials as first major problem.

During the root cause analysis, the major causes of lack or delay to deliver materials or resources
are: material with the specified design is unavailable or scarce in the market; procurement
method is traditional which is not planned due to problem on capacity of individuals and small
staffs to satisfy the need of projects, no alternative supplier was sought, gaps in material
management on project to provide or request resources based on schedules ahead of time, and
due to budget constraint.
Table 4.6 management related constraints

Level Of Impact
Very High Minimum Low Very
No. Management Related Constraints High Low
5 4 3 2 1 TR MR
3 % % % % %
3.1 Level of management commitment
8.30 18.30 31.70 31.70 10.00 60 2.8

3.2
Material shortage at project site/delay 8.50 39.00 20.30 28.80 3.40 59 3.2
3.3 Project budget shortage/delay 10.50 14.00 33.30 33.30 8.80 57 2.8
3.4 Project leadership style 5.10 16.90 23.70 39.00 15.30 59 2.6
3.5 Incentive mechanism employed 7.00 17.50 28.10 35.10 12.30 57 2.7
3.6 Proper coordination and execution 3.40 13.60 32.20 40.70 10.20 59 2.6
follow up and control
Significant
3.7 Management relation ship 8.30 10.00 30.00 38.30 13.30 60 2.6
3.8 Excess/insufficient manpower 1.70 15.00 33.3 31.70 18.30 60 2.5
3.9 5.00 10.00 33.30 41.70 10.00 60 2.6
Project team competency problem
3.10 Work stop due to late payment of 1.80 1.80 5.40 35.70 55.40 56 1.6
labour force
3.11 Adequacy of planning and risk 1.70 15.30 28.80 33.90 20.30 59 2.4
management process
3.12 Underestimating project cost 0.00 15.30 27.10 35.60 22.00 59 2.4

The site management was not plan ahead of time to ensure that the critical materials are available
at site all the time in order that labour productivity not affected and project time and cost overrun
will not be resulted. The other constraints that affect labour productivity are level of management
commitment for changes as it go down from higher to lower management, project budget
shortage or delay due to late issuance of payment certificate by the contractor, poor/ineffective
incentive mechanism.
ịv Technology related Constraints
Analysis of the sub-factors under the use of technology related broad category of on project/ site
labour productivity constraints is presented in Table 4.7. The majority of the respondents rated
the adequacy of Employed machinery and equipments and the condition of machineries and
equipment in use on the building construction have the greatest impact on labour productivity.
This result is consistent with Zakeri, that equipment shortage refers to frequent breakdown of
major equipment, shortage of spare parts, improper service and maintenance, lack to use of
machinery or deliberate sabotage by operators. This problem causes major idle time since
employed workers are unable to progress their work due to material transportation problems.
Table 4.7 Productivity constraints related to technology

Level Of Impact
Very Very
High Medium Low
High Low
No.
Technology related constrains 5 4 3 2 1 TR MR RIl
4 % % % % %
Adequacy of Use of machineries

4.1 5.30 22.80 33.30 28.10 10.50 2.8
and equipment on construction 57
Significant
Employed machinery and

3.60 16.10 51.80 25.00 3.60 56 2.9
4.2 equipments condition
Inadequate IT infrastructure and

4.3 0.00 13.80 44.80 24.10 17.20 58 2.6
application in construction industry

The root causes for these constraints are due to lack of knowledge what construction equipment
to use, not trained personnel is assigned for operation which cause failure of the machine or
equipment due to operation error, proper maintenance personnel wasn’t assigned to give
immediate solution during machine failure.
V Unforeseen Events related constraints
According to the result of Table.4.8, it shows that Poor weather condition፡- high rain; high
wind, heat, humidity and cold weather as a sub-factor under unforeseen events have the greatest
impact on on-site labour productivity in the projects of defense construction. This factor could be
constraint for productivity of labour at projects during the rainy season when there is high rain
and cold. On the other hand high wind and heat affects project progress around Dire Dawa due to
the adverse environmental weather condition. The construction season normally refers to the
period of high building activity during the year. According to the context of Ethiopia high
construction activity is conducted out of the summer season due to seasonal effect of rain.
Table 4.8 Labour productivity constraints related to unforeseen events

Level Of Impact
Very Very
High Medium Low
No. High Low TR MR RIl
Unforeseen constraints 5 4 3 2 1
5 % % % % %
Stop work order because of site
0.00 0.00 6.90 34.50 58.60 58 1.5
5.1 accident
Inflation/ Fluctuations in labour,
3.40 5.20 29.30 37.90 24.10 58 2.3
5.2 materials, etc.
Poor weather condition፡- high
Significa
rain; high wind, heat, humidity, 5.30 24.60 45.60 17.50 7.00 57 3.0
5.3
cold
nt
According to 1964 report made by the Travelers Research Center (TRC), inc. for the U.S.
National Weather Service attempted to calculate the cost of bad weather to the construction
industry. Advance information about the weather has its value; however, if such information is
used only to stop work, most of the problems caused by the weather are not really solved.

According to the TRC in the U.S, the only positive solution seems to be the protection of
construction materials and equipment and the provision of a suitable working environment for
the workmen. To improve productivity of labour during this season clothing for the workmen
should be fulfill so that better working condition is created and most activities that should be
conducted in the summer season should be those activities which are not affected by rain. For the
case of high temperature, construction projects like Dire Dawa where the temperature is very hot
during the midday better working environment and project based motivational system should be
employed by fulfilling site facilities and adopting better incentives mechanisms.
vị Consultant related constraints
Table.4.9 represents the analysis of the relative levels of impact of the sub-factors under the
consultant related broad category of labour productivity constraints. Incomplete Design, and
Consultant’s slow payment certificate verification is rated as the subcomponent having the
highest level of impact on labour productivity. During the root cause analysis the reason for
incomplete design or delay is due to capacity limitation and experience of the work force.
Table 4.9: Labour productivity constraint related to consultants

Level Of Impact
No. Very Very
High Medium Low TR MR RIl
High Low
Consultant’s related labour 5 4 3 2 1
6
productivity constraints
% % % % %
Lack of consultant’s site staffs
experience Causing unreasonable
insistence on compliance to 20.30 28.80 28.80 13.60 2.8
6.1 8.50
specification without due regard for 59
practicality or site condition
6.2 Incomplete Design/delay 25.00 18.30 28.30 21.70 6.70 60 3.3
Slow response of consultant’s site

Significant
27.60 25.90 20.70

6.3 8.60 17.2 59 2.8
staffs attending to inspection work
Consultant’s slow payment certificate

21.10 21.10 15.80 2.9
6.4 verification 57
8.80 33.30

Frequent design changes due to change of the demand of the client or consultant are among the
reasons why design is delayed. Since design didn’t deliver on time and wasn’t complete to
implement on the floor, the work force became forced to wait idle until correction is given.
As the result productivity is affected. To improve the quality of design which will be released to
the contractors, training should be prepared for the workforce and update the design workforces
with recent design software for better design work. Payment certificate verification didn’t place
as constraint of productivity in the annual reports of the enterprise rather payment certificate
didn’t prepare properly. Therefore it wasn’t considered as constraint of productivity in this
research work. The other constraints considered as factors affecting productivity of labour in
consultant’s related constraints are Lack of consultant’s site staffs experience Causing
unreasonable insistence on compliance to specification without due regard for practicality or site
condition and Slow response of consultant’s site staffs attending to inspection work.
vịị Other External Factors Group
Table 4.10 shows that, within the external factor broad category, the right of way, Contractual
problem has been rated by the respondents as the set of factors having the highest impact on on-
site/project labour productivity.
Table 4.10: Productivity constraints related to other external factors
Level Of Impact
Other external Very High Medium Low

Very
No.
constraints High Low
5 4 3 2 1 TR MR
7 % % % % %
Local legal 1.90 54 2.4
7.1 issues 13.00 33.30 27.80 24.10
Contractual 3.60 54 2.5
Significa
7.2 problem 14.30 30.40 30.40 21.4
7.3 right of way 7.00 12.30 29.80 24.60 26.30 57 2.5

nt
During root cause analysis the impact of contractual problem was not considered as constraint of
productivity in the annual reports of the enterprise and by the building construction core process

manager during interview made in the root cause analysis even though it is rated higher by
respondents during questioners as it has an impact on productivity of labour. But right-of-way
was considered as constraint and rated higher by the respondents during questioner as it has an
impact on productivity of labour and project work progress. This result is also supported by the
annual reports of the enterprise.
This is the legal issue which was raised at the beginning and during construction process which
can be solved by clearing any legal issues before the project is handover. To solve such
constraint, the selected construction site should be cleared whether the site selected has any legal
issues related to right-of-way so that such issue couldn’t be a constraint for labour productivity
during construction process.
ị Relative Levels of Impact of the Broad Categories of Productivity Constraints

The relative levels of impact of the broad categories of labour productivity constraints are
analyzed in Table 4.11. Results showed that all internal broad categories and one external
category constraints are significant, having achieved MR values of greater than the threshold
value of 2.5 (see Equation 6 in the annex).
Table 4.11 Relative levels of impact of the broad categories of onsite productivity constraints
Level Of Impact
Very Mediu Very
High Low
High m Low
No RIl
TR MR
. Description 5 4 3 2 1 (%)
management related
1 4.2 19.5
constraints 3.30 15.00 40.00 35.00 6.70 60
2 work force related constraints 3.3 6.70 40.00 33.30 16.70 60 4.0 18.6
3 consultant’s related constraint 21.7 16.70 23.30 26.70 11.70 60 3.1 14.4
4 technology related constraints 6.70 16.70 35.00 31.70 10.00 60 2.8 13.0
5 characteristics of the project 5.00 18.30 35.00 30.00 11.70 60 2.7 12.6
6 other external constraints 1.70 11.70 33.30 33.30 20.00 60 2.4 11.2
7 unforeseen constraints 0.00 10.00 33.30 36.70 20.00 60 2.3 10.7

The internal constraint categories comprising workforce, technology, project characteristics and
management, as calculated above, contribute about 64 percent of the labour productivity
constraints, implying that the external constraints only contribute 14 percent since the rest 22
percent of the external constraints are not significant. Out of the significant constraints of the
broad category 81.5 percent is internal constraint which shows that the internal constraint
contributes the maximum share for lower labour productivity of the enterprise. This result is in
agreement with the findings of Fabling and Grimes that the relative importance of internal/
controllable and external/uncontrollable constraints to firm’s performance and concludes that the
differences in firm performance are explained in large measure by factors over which they can
control rather than purely by exogenous factors. Likewise the findings of this research show that
the internal constraint factors have weightier impact on labour productivity of the enterprise than
external factors.
The finding that management related constraint has the highest impact on labour productivity
concurs with the findings in previous studies of Knutson and Burati that the way a project is
managed, especially as it relates to the critical path and critical cost activities, is key to
productivity and performance. However, a number of authors like Mbachu, Henriod and Lantran,
believe that positive net cash flow, being the lifeblood of the industry and the source of project
finance has the most profound impact on productivity and performance.
ịị Responses of labours on constraints of project/onsite labour productivity
The result of table 4.12 supports the result of table 4.5 in that Rework problems due to
construction error, Material shortage/delay at project site, Level of staffs turnover, and
Workforce morale are constraints which have impact on productivity of labour.

Table 4.12 Relative levels of impact of onsite labour productivity constraints

Level Of Impact
Very High Medium Low Very
No.
Description
High Low TR MR RIl
5 4 3 2 1 (%)
1 Rework problem due to
16.10 12.90 35.50 19.40 31 2.7 11.7
construction error 16.10
2 Level Of Labour Involvement 15.60 37.50 25.00 18.80 32 2.6 11.3

3.1
3 Material shortage at project
Significant
site/delay 3.20 12.90 35.50 22.60 25.80 31 2.5 10.9
4 Level of staffs turnover 16.70 16.70 16.70 36.70 13.30 30 2.5 10.9
5 Workforce level of moral 3.10 21.90 21.90 25.00 28.10 32 2.5 10.9
6 Absenteeism 6.7 13.30 20.00 36.70 23.3 30 2.4 10.4
Work stop due to late payment

7 6.30 31.30 31.30 28.1 32 2.3 10
of labour force 3.10
8 Workforce health condition 0.00 22.60 38.70 31 1.9 8.3

3.20 35.50
Level of familiarity with
9
current job and conditions 0.00 3.20 16.10 38.7 41.9 31 1.8 7.8
10 Proper coordination and
execution follow up and
9.40 12.50 28.10 43.80 6.30 32 1.8 7.8
control
By improving the impacts of those constraints of labour productivity which are identified in the
analysis; increases output imports, decrease cost of expenditures, minimize wastages, and hence
increase profit which can as a result be another financial source for the enterprise.
Hence, according to the above analysis made based on the response of the respondents during
questioners, the impact of internal constraints have more impact on productivity of labour
compared to external constraints. So, as the result of the analysis indicates the enterprise should
work on the improvements of those factors which affect the productivity of labour in particular
and productivity of the enterprise in general.

4.2. productivity measurement and analysis methodology Development

Due to the unique nature of building construction it covers many different activities to bring
buildings in to realization. These activities require the coordination and involvement of
different parties from the very initial idea of the building construction of the client to the
completion of the building construction process of a building and final acceptance and then
delivered to the final user. According to the findings of different researchers and this research
work, to bring a building construction into the usable complete building form, many different
activities which demands the skill and experience of different parties and a remarkable time
is required for completion. On the other had in building construction process, one activity
depends on the completion of other activities and it is not a form of activity that a party could
complete his task and left it for other party. Based on the standards of the building
construction manual for labour each activity in building construction has a standard. Even
though different approaches are developed in measuring the productivity of labour in
manufacturing and construction, due to the unique nature of building construction the method
employed to measure the productivity of labour in this research work is daily based
measurement of labour productivity for each activity done in the day. This method is chosen
because if an activity done by one party is less productive its effect will be reflected on the
other activity which requires the completion of this activity and can be help to recognize
problems easily for an appropriate action.
4.3. Productivity improvement model design
Based on the construction process model and the frame work for productivity improvement
and productivity improvement model in the related literature survey and the results of labour
productivity problems in the enterprise the following building construction Labour
Productivity Model for Defense Construction Enterprise is developed.
The model developed used to illustrate the relationship between parties involved in the
process of building construction and the input to output relationship which is helpful for
improving the productivity of labour in the enterprise. Once the productivity of labour is
improved the case that building construction projects require extra time and budget would be
avoided and a building would be completed on project time and cost otherwise lesser.

Management Practice in Head Office
System
In puts
- Building Construction process
- Materials - Resource management Out puts
- Man power -Operation and regulatory - Completed building
- Financial
facility
- Equipment
- Building design
Participating Staffs
- Schedule etc
- Consultants, client and stakeholders
- Project staffs
Fig 5.3. Building Construction Productivity Improvement Model for DCE

Information flow
Material flow

Coordination among participating parties in construction process is very vital for the
successful completion of a construction project. As it can be seen from the model if the
information flow, material flow and the construction process are well managed according to
the demand of the construction process among participating parties, a successful building
construction which is completed at the right time, at the estimated cost and better quality
which satisfy the users’ requirement could be attained.
At the management stage information, materials and the construction process would be
managed. This can be done when the project staff request or issue its requirement based on
the project plan and when the head office staff respond for the required resources such as
materials, human resources, budget and able to pass an important decision on time.
Moreover, once the resources available based on schedule, the construction process will be
conducted using last planner system based on specifications with cooperation among staffs
creating good working condition, motivation and attitude.
On the other side all stake holders, client and consultants should assist the project staffs for
any challenge which requires their involvement for supervision, clearing legal issues, and
other issues before and during the building construction process.
The model can help see the progress of construction based on schedule and give appropriate
solution for successful completion. So, in this way quality building which can satisfy user’s
requirement which is completed in scheduled time and budget can be built. From this the
enterprise can be benefited by increasing its profitability, create means of financial source
through decreasing its expense by avoiding wastage, built its name in the market meeting
customer’s need.

Chapter Five Conclusion, Recommendation and future works
5.1. Conclusion
Building construction is the process in which various activities such as site clearing,
excavation, bar bending, plastering, and hollow block or brick lying, plastering, electric and
sanitary line installing, painting and etc. are carried out to install a complete serviceable
building. These activities require the participation of many parties for the realization of
conceptual building design in to visual existing building.
Defense Construction Enterprise building construction experiences time and cost overrun due
to various project delay factors that affect construction labour productivity. This paper has
identified those factors that affect building construction labour productivity in the enterprise.
Results indicated that
 Material shortage or delay at project site is one of the factors affecting labour
productivity
 Levels of skills and experience of workforce in the enterprise
 Levels of staff turnover
 Rework problems due to construction errors
 Levels of management commitment for change as it go down from higher to down
 Project budget shortage or delay due to late issuance of payment certificate from projects
 Poor incentive mechanism
 Employed machinery and equipments poor condition
 Right-of-way problem during construction is on progress
 Poor weather condition; high rain and cold in summer, and high wind and heat in
projects such as dire dawa and others where the weather condition is bad for work during
mid-day and
 Incomplete or late issuance of construction drawing by consultants is some of the factors
which affect the productivity of labour found in the research.

5.2. Recommendation
It is known that Construction is a collaborative activity in that only by pooling the knowledge
and experience of many people or parties that buildings can meet the needs of today, let alone
tomorrow.
The results of the survey in this research indicated that factors that are adversely affecting
building construction labour productivity in the enterprise were material shortage at site. Lack
of material means that the workers are waiting idle doing nothing until material is supplied.
To solve those factors which affect productivity of labours in the enterprise, the following
recommendation are suggested.
 The procurement department should always coordinate with site staff on the material
shortage at site. The procurement staffs should seek for alternative suppliers list for
different materials.
 The procurement staff should be organized in such a way that when the project number is
increasing the number of the procurement staffs should be increased so that project
demand can be covered.
 Commitment to productivity improvement should be there at all management levels
 Since the understanding in the concept of productivity and its effect wasn’t equal in the
enterprise and since there is a gap in the skill and experience, training on the concept of
productivity of labour, its effect in the enterprise and factors affecting it should be given
for all staff members in the enterprise so that ever staff members can sense it and
motivate for change.
 Right-of-way problems should be cleared before a project is hand over.
 Create good working environment so that the staff turnover is minimized by
strengthening the performance related payment incentive mechanism adopted in some of
the project and creating good relationship in the enterprise.
 A nearby supervision should be adopted to minimize rework problem due to construction
error.
 Suitable equipment which are products of recent construction technology, easily
assemble scaffolding, formwork, concrete pump, batching plant etc should be introduced
in the construction process. this can help to simplify the construction process and increase
the productivity of labour in the construction process.

 For projects which could be affected its productivity with bad or adverse weather
condition a performance related incentive mechanism should be adopted. Material
procurement should be carried out on project site so that the project would not be affected
due to delay in material supply.

5.3. Future works

The current research study was limited to the building construction industry specifically in
Defense construction enterprise. So Future study should be carried on road and bridge
construction of the enterprise and further should be conducted in the construction industry of the
country. Because huge amount of investment or money is injecting in the construction industry
by the country so that infrastructure facility will be fulfilled.
Due to less experience in the construction industry in the country finding factors that affect the
productivity of labor, machinery and other inputs in the enterprise and further more in the
construction of the country, which will help to minimize unnecessary cost escalations and
project-schedule delays.

References
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Engineering in University of Calgary, Alberta, Canada. Improving Construction
Productivity on Alberta Oil and Gas Capital Projects
2. Oko John Ameh, Department of Building, University of Lagos, Nigeria, Emeka
Emmanuel Osegbo, Department of Building, University of Lagos, Nigeria International
Journal Of Construction Supply Chain Management Volume 1 Number 1 2011
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productivity improvement in small and medium sized enterprises.
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Management – Managerial Practices in the Construction Industry International Journal of
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construction industry: Key constraints and improvement measures’, Australasian Journal
of Construction Economics and Building, 11 (3) 18-33
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http://www.cenbank.org/out/Publications/occasionalpapers/rd/2000/Abe-00-1.PDF
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productivity_02_how.html
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Offshoring, and Productivity Measurement in U.S. Manufacturing” International Labour
Review, volume 146. Number 1-2, pp 61-80, 2007
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Engineering September 2012. Study Of Factors Affecting Labor Productivity At A
Building Construction Project In The USA: Web Survey
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Construction Industry Ethiopian Economic Association (EEA)
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Project Labor Cost
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Appendix: 1
1. Method Employed for Data Analysis
To analyze the ratings of the respondents, the multi-attribute analytical technique is used as it
was recommended in past studies by Mbachu and Nkado; Chang and Ive, as the appropriate
analytical approach to group ratings of the variables in a given set. The analysis involved the
computation of the Mean Rating (MR), which is the average or representative rating point for
the collective ratings made for each variable in the subset. Bellow the equation shows the
computation for the MR as provided by Mbachu and Nkado.
MRj = ∑5k=0(Rpjki × %Rjk) ………………………………5

Where:
- MR j = mean rating for constraint factor j,
- R pjk = rating point k (ranting from 0-5);
- %R jk = percentage response to rating point k, for constraint factor j.
1.1. Level of significance of the constraint factors
Based on the MR values, the most significant constraint factor in a subset is one with the
highest MR value. The constraint factor having an average or higher level of impact on labour
productivity is considered significant as shown in Equation 5.
Significant constraint factor: MR ≥ 2.5 …………….…6
Non-significant constraint factor: MR < 2.5 …………..7
Where: 1 < MR < 5 on a 5-point Likert rating re-scale.
The middle of the 5-point Likert re-scale is 2.5. Therefore 2.5 is the lower end of the likert re-
scaled middle band hence it uses as the threshold of significance.

Appendix 2: Questionnaire for Survey of DCE building construction
ADDIS ABABA UNIVERSITY

ADDIS ABABA INSTITUTE OF TECHNOLOGY
School Of Mechanical and Industrial Engineering Post Graduate Program
Title of the thesis: productivity improvement model designing for

Defense Construction Enterprise
Questioner that is filled by employees
Dear employees this questioner is prepared by Addis Ababa University post graduate student in
industrial engineering. The main objective of this questioner is to investigate factors that affect
labour productivity and forwarding probable solution that could improve labour productivity in
your enterprise:
So, the response that you will give for each question has a great share for the research work and
all the responses are kept under confidence. More thanks for your cooperation.

Respondents’ profile
1. * Please mark /x/ in the box provided
1. Age 20-30 31-40 41-50 50 and above

2. Marital status married not married
3. Sex male female
4. Accadamic status
2. Certificate and Bellow Diploma First Degree
3. Second Degree and Above
5. Experience In Building Construction
4. 1-5 years 6-10 years 11-15 years
5. 15 years and above
6. Current occupational position
6. Management Professional Technical/Operational
Administration Contract
Please try to fill the questioners provided bellow based on the level of impact they have on
productivity of labour in your enterprise

* Please mark /x/ in the box provided
Level Of Impact
No. Descriptions Very Very
High High Medium Low Low
5 4 3 2 1
Q1 Consultant’s related constraints
Lack of consultant’s site staffs experience Causing

Q1A unreasonable insistence on compliance to specification
without due regard for practicality or site condition

Q1B Incomplete Design/delay
Slow response of consultant’s site staffs attending to

Q1C inspection work
Q1D Consultant’s slow payment certificate verification

Level Of Impact
Very Very
High High Medium Low Low
No. Description
5 4 3 2 1
Q2 Management related constraints
Q2A Level of management commitment
Q2B Material shortage at project site/delay

Q2C Project budget shortage/delay
Q2D Project leadership style
Q2E Work stop due to late payment of labour force
Q2F Incentive mechanism employed
Adequacy of planning and risk management
Q2G
process
Proper coordination and execution follow up and
Q2H
control
Q2I Management relation ship
Q2J Excess/insufficient manpower
Q2K Project team competency problem
Q2L Underestimating project cost

Level Of Impact
Very Very
No. Description High High Medium Low Low

5 4 3 2 1
Q3 Work force related constraints
Q3A Level of skill and experience of work force
Q3B Level of labour involvement

Q3C Rework problem due to construction error
Q3D Relationship among labours for coordination
Q3F Workforce absenteeism
Q3G Level of staffs turnover
Q3H Health of the workforce
Level of familiarity with current job and
Q3I conditions
Q3J Level of work force moral
Level of impact
Very Very
high high medium low low
No. Description
5 4 3 2 1
Q4 Characteristics of the project
Q4A Site conditions: access, subsoil; topography
Q4B Project complexity

Q4C Build ability issues

Level Of Impact
Very Very
High Medium Low
No. Description High Low
5 4 3 2 1
Q5 Unforeseen constraints
Q5A Stop work order because of site accident
Poor weather condition፡- high rain; high wind,
Q5B heat, humidity, cold
Q5C Inflation/ Fluctuations in labour, materials, etc.
Level Of Impact
Very Very
High Medium Low
Q6 Technology related constrains

Use of machineries and equipment on
Q6A
construction
Q6B Employed machinery and equipments condition
Inadequate IT infrastructure and application in
Q6C
construction industry

Level Of Impact
Very Very
High Medium Low
5 4 3 2 1
Q7 Other external constraints
Q7A Local legal issues
Q7B Contractual problem
Q7C right of way
Level Of Impact
No. Description Very High Medium Low Very
High Low
5 4 3 2 1
Q1 Consultant’s related constraint
Q2 Management related constraints
Q3 Work force related constraints
Q4 Unforeseen constraints
Q5 Characteristics of the project
Q6 Other external constraints
Q7 Technology related constraints

Level Of Impact
No. Very High Medi Low Very

Description
High um Low
5 4 3 2 1
Q1 Material shortage at project site/delay
Q2 Work stop due to late payment of labour force
Q3 Proper coordination and execution follow up
and control
Q4 Level of labour involvement
Q5 Rework problem due to construction error
Q6 Absenteeism
Q7 Level of staffs turnover
Q8 Workforce health condition
Q9 Level of familiarity with current job and
conditions
Q10 Workforce level of moral

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Building Construction Productivity of Labour Improvement Model Designing for Defense Construction Enterprise

Addis Ababa University

This Thesis is submitted to The School of Graduate Studies of Addis

Prepared by: - Wagaye Tefera

Advisor: - Dr.Ing. Danel Kitaw

Co-Adviser: - Yitagesu Yilma (PhD candidate)

Date: - December, 2014

List of Tables .................................................................................................................................. ii

List of Figures ............................................................................................................................... iii

Chapter One Introduction ...............................................................................................................1

1.1 Background of the Study...…...………...…………………………………………….……….1

1.2 Statement of the problems .........................................................................................................3

1.3 Objective of the research ..........................................................................................................4

1.3.1 General objective ...................................................................................................................4

1.3.2 Specific Objectives .................................................................................................................4

1.4 Significance of the research .......................................................................................................5

1.5 Scope of the research .................................................................................................................5

1.6 Research methodologies ............................................................................................................5

1.7 Organization of the research ......................................................................................................7

Chapter Two Related Literatures survey ........................................................................................9

2.1. Concept of construction process ..............................................................................................9

2.2. The management of a construction process .............................................................................9

2.3. Productivity & productivity mgt in construction process ..............................................…….13

2.4. Factors affecting labor productivity ........................................................................................24

Chapter Three status of construction industry in Ethiopia………………………………………31

3.1. The Ethiopian construction industry .......................................................................................31

3.1.1. Contribution to national income ..........................................................................................31

3.1.2. Contribution to employment ................................................................................................32

3.1.3. Contribution to government revenue ...................................................................................32

3.1.4. Multiplier effects .................................................................................................................33

3.2. Labor productivity in the construction industry .....................................................................33

3.3. Construction contractors in the Ethiopian construction ..........................................................34

3.4. Background of the case Enterprise .........................................................................................37

3.5. Construction process of Defense Construction Enterprise .....................................................38

3.6. Raw materials inputs ...............................................................................................................42

Chapter Four data collection, data analysis and Interpretation .....................................................43

4.1. Data collection, analysis, results and discussion ....................................................................43

4.1.1. Key constraints of labour productivity in the case enterprise ..............................................45

4.2. Productivity measurement & analysis methodology development .......................................61

4.3. Productivity improvement model design ................................................................................61

Chapter Five Conclusion and Recommendation ...........................................................................63

5.1. Conclusion .............................................................................................................................63

5.2. Recommendation ....................................................................................................................64

Fig.1.1. The research framework………………………………………………………...8

BCSPT – Build & construction sectors productivity task force

Chapter One: Introduction

1.1 Background of the Study

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1.2 Statement of the problems

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1.3 Objective of the Research

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1.3.2. Specific Objectives

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1.6 Research Methodologies

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1.7. Organization of the Research

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Status of construction industry in

Fig. 1.1 research framework

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