UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS MASTER OF BUSINESS (Honours) Ho Chi Minh City - 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Bui Trung Kien FACTORS AFFECTING THE FLUCTUATION OF LABOUR PRODUCTIVITY IN THE CONSTRUCTION PROJECTS ID: 60340102 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. CAO HAO THI Ho Chi Minh City - 2012 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com i ACKNOWLEDGMETS Firstly, I would like to express my deepest appreciation to my supervisor Dr. Cao Hao Thi for his professional guidance, valuable advice, continuous encouragement, and motivated support that made this thesis possible. I would like to extend deep senses of gratitude to Prof.
Nguyen Dinh Tho and lecturers who have taught and transferred me valuable knowledge and experience during the period of Master of Business course at International School of Business. Special thanks, to all of my dear friends in MBUS 2010 class, who gave me useful material, response and experience to conducting this study. I would like to express my grateful thanks to my friends and all the construction company in Vietnam who participated in filling the questionnaires and provided the valuable information for this study. Personally, I wish to express my deep gratitude to my parents, my wife, sister and brother for their spiritual support and encouragement during the time of study.
Ho Chi Minh City, Vietnam, 12 Dec. 12 Bui Trung Kien LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ii ABSTRACT Productivity has an important role to help construction companies to be competitive, achieve set goals, meet stakeholder and value propositions. The objectives of this research are to identify the factors affect to the Labor Productivity Fluctuation in construction project in Vietnam, to access the impact strength of influenced factors on the fluctuation of labor productivity and to suggest recommendations to reduce the fluctuation of labor productivity. The objective of this study have been achieved through study 233 questionnaires and the results of analysis of 46 variables considered in questionnaire show that, there are five main factors positively affect to Labor Productivity Fluctuation in construction project.
They are Supervision factor, Motivation factor, Workforce factor, Material/Equipment factor and Schedule factor. After conducting Multiple Linear Regression and ANOVA analysis, the model of study have been indentified which could explains 68.7 % of the total variance in Labor Productivity Fluctuation and ANOVA testing result also shows that there are significant different among project characteristic group on LPF. The results of this study recommend that construction companies have to conduct labour productivity study in their project to reduce Labour Productivity Fluctuation. It is important to have training program to increase labour skill, improve labor commitment and the relationship among worker by increasing labor benefit and team building program.
It also suggested that the planning software should be used in the project to have a good planning work to reduce the frequency of working overtime and make the labor more productivity. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com iii TABLE OF CONTENT ACKNOWLEDGMETS. ii TABLE OF CONTENT. iii LIST OF FIGURES.
vii LIST OF TABLES.viii LIST OF ABBREVIATIONS .1 Statement of the problem .2 Objective of the study.3 Scope of the study. 3 CHAPTER 2: LITERATURE REVIEW.1 Definition related to project and project management .2 Definitions related to productivity. 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.4 The formulation for the fluctuation of labor productivity.3 Factors affecting construction productivity .4 Factor and indicators affect to labour productivity fluctuation .1 Factor related to workforce .2 Factor related to management team .3 Factor related to motivation .4 Factor related to schedule compression .5 Factor related to material/equipment .6 Factor related to supervision.7 Factor related to safety. 30 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.10 Multiple regression analysis.
32 CHAPTER 4: DATA ANALYSIS.1 Sample descriptive statistics .3 Exploratory factor analysis .4 Revised the research model.5 Multiple regression analysis .2 Multiple linear regression analysis.2 Result on the linear regression analysis .4 One-Way ANOVA Analysis in project characteristic.1 One-Way ANOVA testing in type of project .2 One-Way ANOVA testing in project ownership .3 One-Way ANOVA testing in project budget. 53 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.5 Results of ANOVA testing on project characteristics.6 Summary of data analysis result. 53 CHAPTER 5: RECOMMENDATION AND CONCLUSION .3 Limitations and future research. 69 Appendix C: First time running- Eigenvalues.
76 Appendix D: First Time Running – Factor Loadings. 77 Appendix E: Charts of Multiple Regression Analysis. 79 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com vii LIST OF FIGURES Figure 2.1: Factor model of construction labor productivity.2: Factors that are statistical significant .3: External affects to construction on-site productivity .4: Internal affects to construction on-site productivity .5: Workforce factor and LPF .6: Management team factor and LPF .7: Motivation factor and LPF.8: Schedule compression factor and LPF.9: Material/Equipment factor and LPF.10: Supervision factor and LPF .11: Safety factor and LPF .1: Revised conceptual model .2: Final research model. 53 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com viii LIST OF TABLES Table 2.1: Factor affecting on construction workforce productivity.2: Factor affecting on labor productivity .1: Mode of data collection .2: Distribution of respondents’ position .3: Type of project .4: Ownership of project .5: Total budget of project.7: Reliability analysis result .8: KMO and Bartlett's Test.9: Total variance explain of factor analysis.10: Factor analysis results.11: Correlation analysis result .12: Model summary of multiple linear regression analysis.13: ANOVA of multiple linear regression analysis .14: Coefficient of multiple linear regression analysis .16: Descriptive for type of project group.17: ANOVA for type of project group.18: Descriptive for project ownership group.
51 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ix Table 4.19: ANOVA for project ownership group .20: Descriptive for project budget group .21: ANOVA for project budget group. 52 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com x LIST OF ABBREVIATIONS EFA: Exploratory Factor Analysis GDP: Gross Domestic Product GNP: Gross National Product GVA: Gross Value Added HCMC: Ho Chi Minh City KMO: Kaiser-Meyer-Olkin LPF: Labour productivity Fluctuation MRS: Market Research Society PMBOK: Project Management Body of Knowledge LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 1 CHAPTER 1: INTRODUCTION 1.1 Statement of the problem The construction industry has an important role in the developed and developing countries. In the Vietnam, construction industry is growing very strongly and has gained many significant achievements. The General Statistic Office of Vietnam (2011) reported that it accounts for about 6.41 % of gross national product and 6.4 % of total employment.
The expansion of construction activities has generated a lot of jobs for skilled, semi-skilled, and unskilled labour, but beside with this, Vietnam’s labor productivity remains low against other Southeast Asian countries despite witnessing an on-year rise in the total productivity of 5.1% as showed in the Vietnam’s labour and social trends report (Institute of Labour Science and Social Affairs, 2010). A successful construction project is one that achieves the intended objectives in terms of cost, time, quality and safety. This is possible only when the planned levels of productivity can be attained. However, productivity, or lack of it, is perhaps one of the main problems confronting the construction industry, the construction firm and the construction project.
As a consequence of the importance of the construction industry, the nature of construction projects and the available economic resources, more emphasis should be given to improving productivity. Productivity enables 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 (Durdyev and Mbachu, 2011). Understanding critical factors affecting the fluctuation of labor productivity is very necessary to improve the efficient of construction project likes reduce total cost and time, and it could increase the LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2 competitive advantages of the construction company in Vietnam toward foreign construction company.
All the above things leads this study to raise the questions “What are the factors affecting labor productivity fluctuation in the construction” and “How to evaluate the effects of this factor on the fluctuation of labor productivity”. To answers these questions, it necessary to conduct the topic Factors Affecting the Fluctuation of Labor Productivity in the Construction Projects.2 Objective of the study This study is conducted to achieve the following objectives - To identify factors affecting to the fluctuation between real and planed labor productivity of construction projects. - To assess the impact strength of these factors on the fluctuation of labor productivity. - To analysis the difference in Labor Productivity Fluctuation due to Project Characteristics.3 Scope of the study The study will be conducted base on the accomplished construction projects in Vietnam from 2002 until now, and more focus in HCMC.
The respondents will be the person who has a important role in the project such as clients, contractors, project managers, construction managers, foreman, chief engineers … and has had experience in managing specific construction project 1.4 Research contribution The research results can be used to: LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 3 - Help Construction Companies in Vietnam to have an overview on Labor Productivity in construction project. - Help Construction Companies in Vietnam to have deeply awareness about the main factors affect to the fluctuation of labor productivity in construction project and they can manage Labor Productivity more effectively. - Help them in building a suitable Labor Productivity Plan with its characteristic and condition. - Be a reference for new investors who want to invest in construction industry in Vietnam.
- Help to develop Vietnam’s construction industry in particular and economic development in general.5 Research Structure This research consists of six chapters from Chapter 1 to Chapter 5 Chapter 1 – Introduction This chapter includes research statement, problem outlines, research objectives and scope of research and especially it will outline the study process which quite important for the study as it shed a light for the successful of mater thesis. Chapter 2 – Literature Review This chapter will present recent definitions related to project management, productivity, labor productivity and construction productivity. Base on the previous studies, this section also identify the factors affecting to labor productivity in construction project, states the Hypothesis and proposed the research model for this study Chapter 3 – Methodology LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 4 This chapter presents the research process and the methodology that will be used for empirical testing of the research model which has been developed in chapter 2. Chapter 4 – Data Analysis This chapter presents the data analysis result, this is the most significant part of the study as it will contain the data analysis including of Sample Descriptive Statistics, Reliability Analysis, Exploratory Factor Analysis, Multiple Regression Analysis and ANOVA Analysis to provide a very comprehensive picture about the relationship of factors affecting to the fluctuation of labor productivity in construction project in Vietnam.
Chapter 5 – Conclusion and Recommendation With results from analyzing data collected in chapter 4, a conclusion as well as the objective required is established. The finding reconfirms the factors affecting to the fluctuation of labor productivity in construction project. Finally, recommendations are brought to improve labor productivity in construction project and give direction for future research. LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 5 CHAPTER 2: LITTERATURE REVIEW This chapter presents a review of relevant literature related to factors affecting labor productivity and consists of definitions related to project and project management, definitions of productivity, total productivity and construction productivity.
This chapter also states the hypotheses and propose conceptual model for this study.1 Definition related to project and project management 2.1 Project A guide to the Project Management Body of Knowledge (2008, p.