NICMAR (NCP-31)

Assignment On

PRODUCTIVITY & WORK

STUDY TECHNIQUES IN
CONSTRUCTION PROJECTS

National Institute of
Construction
Management and
Research, Pune.

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Assignment submitted by:-

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Reg No. 210-10-11-8717-2124

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Course No. - NCP 31

Course Title Productivity and Work Study

Techniques in Construction Projects

ASSIGNMENT BRIEF:
Write an easy on the Role of motivation and incentives in
productivity improvement. Elaborate in detail the Role of
human factor in productivity improvement. Give Role of
incentive schemes with reference to your
Companys schemes.

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INTRODUCTION:
Construction Project can be defined as a mission, undertaken to create a
unique facility, product or service within the specified scope, quality, time
and costs. With the emerging global opportunities, projects have crossed
geographical boundaries, corporate channels, traditional systems and cultural
diversities. Thus there is a vast scope for improving performance through
knowledge in the construction industry, where men, materials, machinery,
money and management work together to build a facility. The ultimate object
of an Enterprise is to make profits and to satisfy the consumption needs of
the community. This involves a wide range of economic resources.
Productivity in the economic sense does not refer to any combination of
resources but essentially to that combination which conforms most closely to
a firms desired outputs As a Project Manager, an expert in planning and
organizing construction activities, need to be well versed with the ongoing
industrial development and accordingly create new or study the existing
techniques

related

to

productivity

towards

the

betterment

of

the

organization.
Apart from building materials, reduction in the cost of construction may be
achieved in a variety of ways such as avoiding wastages, adopting
appropriate technology, evolving innovative designs, achieving efficient
construction management, effective programming of works, improving labour
skills, on-line monitoring etc All these techniques may be clubbed as

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Productivity measures. Productivity implies effectiveness and efficiency in

individual and organizational performance. Effectiveness is the achievement
of objectives. Efficiency is the achievement of the ends with the least amount
of resources. The highest site productivity is obtained by producing the
required quantity of construction of specified quality within the budgeted
time and by the best and cheapest method. Productivity increases if a greater
output is achieved for the same input, or if a greater output is achieved for a
smaller input. There are two main ways to increase the amount of goods or
product produced; one is to increase employment and other is to increase
productivity. Efforts to increase employment are very important and should
go hand in hand with efforts to increase the productivity of those already
employed. But it is the latter task that we are concerned and is the basis for
the entire discussion henceforth.

MOTIVATION & INCENTIVES: (CONCEPT & MEANING)

Managing requires the creation and maintenance of an environment in which
individuals work together in groups toward the accomplishment of a common
objective. A manager cannot do this job without knowing what motivates
people. The building of motivating factors into organizational roles, the
staffing of these roles, and the entire process of leading people must be built
on knowledge of motivation. The managers job is not to manipulate people
but, rather, to recognize what motivates people.
The basic element of all human behavior is some kind of activity, whether
physical or mental. We can look at workers behavior as a series of activities.
The question arises as to what activities worker will undertake at any point of

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time and why. As we all know activities are goal oriented i.e. people do things
that lead them to accomplish something. The primary task of managers is to
get people to contribute activities that help to achieve the mission and goals
of an enterprise or of any department or other organized unit within it.
Clearly, to guide peoples activities in desired directions requires knowing, to
the best of any managers ability, what leads people to do things, what
motivates them.
Human motives are based on needs, whether consciously or subconsciously
felt. Some are primary needs such as physiological requirements and
secondary needs such as self-esteem, status, affiliation with others,
accomplishment and self- assertion. These needs vary in intensity and over
time with various individuals. Motivation is a general term applying to the
entire class of drives, desires, needs, wishes, and similar forces. A manager
has to motivate their subordinates by doing those things which they hope will
satisfy these drives and desires and induce the subordinates to act in a
desired manner. Thus what effect motivation has on the individual on the
above said drives and desires can be explained in the following line diagram:
Give
Needs

Which

Tensio

Cause

ns

Wants
rise to

Which
Which
Satisfaction

Actions

give

result in
rise to

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A manager can do much to sharpen motives by establishing an environment

favorable to certain drives. Similarly, the environment of a business in which
managerial performance is effective and efficient tends to breed a desire for
high quality management among most, or all, managers and personnel.
Motivation refers to the drive and effort to satisfy a want or goal. Thus
motivation implies a drive toward an outcome. The motivation factor is only
used in the construction field just only to increase the productivity of the firm.
Productivity of the construction enterprise:
To carry out any given construction project, an individual mix of resources
including land, buildings, materials, mechanical plant, tools, equipment and
manpower have to be mobilized. It is the task of management to combine
these resources to carry out the project economically and expeditiously.
In larger enterprises a management team will share the various specialist
activities, such as site management at various levels, material controls, plant
management, and financial controls and so on, but in small firm all the
management activities might be carried out by one person. Experience has
shown that there is always room for improvement in construction project
execution. The total time taken is often well in excess of what it would have
been if the designs, specifications and methods of construction were properly
planned and prepared, and if site management had implemented them
effectively so that there had been no loss of working time.
The task of management is to organize and control all the available resources
in order to achieve maximum productivity that is to reduce the work
content to as near to basic as possible and to eliminate ineffective time. As
regards to various factors affecting the productivity with regards to physical

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resources (money, material, machinery and designs & liaison) is concerned

can be easily tackled by a well experienced Project Manager, but as regards
to the productivity from the workers or labour force is highly neglected and
overlooked while studying the factors which affects the productivity of a site.
An efficient Project Manager needs to develop a work-study technique, which
will find a better way of carrying out various activities.
Productivity and labour:
On any construction site the contractors financial gain is dependent,
amongst other things, on completion of the work in good time and at the
least cost, and the productivity of labour has a direct bearing on this being
achieved.

The factors affecting the performance of labour generally fall into three
categories: 1. The human capacity for work;
2. The competence of site management;
3. The motivation of the workers.

We are concerned with the first and the last factor in the ongoing discussion.
By motivating the workers in the right manner will increase the productivity in
the desired way within the time stipulation and cost margins. The best
motivator is money itself and there are various ways of using it as the
motivating factor, one being in the form of incentives. The various incentive
schemes are discussed later on. Other means of motivation is the theory of
participation. There can be no doubt that only rarely are people not

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motivated by being consulted on action affecting them by being in on the

act. The other interesting approaches to motivation are the quality of
working life (QWL) program. These represent a systems approach to job
design and a promising development in the broad area of job enrichment,
combined with grounding in the sociotechnical systems approach to
management.
Wage is a means of providing income for employees and as a cost of doing
business to the employer. It provides a source of motivation for employees to
perform effectively and is one of the most important considerations to a
person who is contemplating taking a new job. The search has been for some
incentive plan additional to wages decided which when installed will solve all
the problems of supervision and management automatically by causing the
employees to work harder and more efficiently, making them happy on their
jobs, and increasing the profits of the business. The executive of today
probably has no more chance of finding a wage-incentive plan, which will by
itself do all these things. No wage-incentive payment plans, no matter how
carefully and intelligently designed, will work effectively unless it is well
administered.

Essentials of a good Wage-Incentive Scheme:

Fair to workers and management: An important requirement for the

lasting success of any wageincentive plan is that it shall be fair to both the

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worker and the management in every detail of its content and administration.
If any part cannot stand impartial judgment as to its fairness, then that part
must be changed or the plan will not last. In other words the plan has to be
designed in such a way that it increases earnings but at the same time
increase production.

Major encouragement on most important factor: Perhaps the first step in

the design of a wage-incentive plan is to decide what is the relative
importance of each of the various elements of the employees work effortwhat should emphasized most.

Encourage well-rounded effort: The plan should in some effective manner

also encourage and reward parts of the employees work other than the
emphasized part.

Reward proportional to individual effectiveness: Incentives applied to an

individual are more effective, as a rule, than those applied to groups. In some
cases, however, where small groups act as units and it is difficult to measure
individual contribution, group incentive plans have been effective.

Easily understood: The employee should be able to figure for himself, all
along, just how he stands, just how much extra compensation he has earned.

Steady earnings: The week-to-week, month-to-month fluctuations in

earnings should not be too large, and this is especially true if the fluctuations
are caused by things outside the employees control.

The plan should be such that, if there is extra compensation in the form
of bonus, premium, or commission, a fairly large proportion of all the
employees should regularly earn some of this extra compensation.

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It is most important that the standard by which the amount of the

incentive payment is to be determined shall be most carefully set, through
the use of all available scientific aids.

Good administration: There is probably no one thing more essential to

the success of any wage-incentive plan than that there shall be continuous,
intelligent, and sympathetic supervision by management of every phase of
the operation of the plan.

MOTIVATION OF WORKERS:
On any construction site one of the important factors affecting the
performance of labour is the motivation factor, which indirectly leads to low
productivity. Workers are motivated in their work by a variety of methods, all
of which may be present in varying degrees. They include: Fear;
Discipline;
Job Satisfaction;

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Financial Incentives.
FEAR: This includes fear of supervisor and fear of losing a job and being out
of work and destitute, especially in country where no form of social security
exists. This is a negative and unsatisfactory form of incentive.
DISCIPLINE:

This is exemplified by punctuality, lack of absenteeism, good

standards of workmanship and the observance of site cleanliness and

hygiene. Lack in discipline generally leads to low site morale and
unsatisfactory productivity. Following steps could be followed in order to
achieve site discipline: Site rules drawn up and explained to all workers.
Site in charge and respective senior personal set a high standard in
self-discipline by his own example.
Workers encouraged to feel that they are working with, rather than
under, the supervisor but at the same time the supervisor should leave
no doubt in their minds that he is the leader.
Retribution should be a matter of inevitability rather than severity. No
breach of discipline should go unchecked.
Developing self-discipline through pride in achievement. Good work
should always be praised.
Taking a personal interest in the worker, discussing problems fairly,
never showing favoritism.
Disciplinary action should be taken as soon after an infringement as
possible.
JOB SATISFACTION: Apart from work providing the means of satisfying the

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workers basic needs as to food, clothing and shelter, job satisfaction is

obtained when the higher psychological needs of the worker, such as selfrespect and personal dignity, are met. Job satisfaction is obtained through a
sense of achievement as to quality, output or other contributions, particularly
if that achievement as to quality, output or other contributions, particularly if
that achievement is recognized and acknowledged. Pride in craft and skill and
a sense of responsibility are to be encouraged and rewarded with
opportunities for advancement and promotion.
Negative aspects that detract from job satisfaction and morale, and which
consequently affect productivity, are to be avoided. These are generally
aspects that imply that the worker is held in low esteem by management and
include:
Poor working conditions and terms of employment;
Poor or subservient relations with supervisors.
FINANCIAL INCENTIVES:

One of the effective methods as regards to

motivation factor. Incentive schemes of this nature are widely used in

industrialized countries, but are often a source of contention and dispute
between management and workforce. The schemes enable the workers to
earn bonuses over and above the normal rate of pay for achieving a rate of
output at or above a predetermined standard. It is not always easy to work
out what this standard performance should be, so that the output targets set
by management of which the bonus earnings depend are often inaccurate.
TYPES OF INCENTIVE SCHEMES:
Different financial incentive schemes are discussed below:

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Bonus Targets: Targets are set before the work starts, usually in the form
of:
Piecework Targets i.e. payment based on the amount of work done;
Time targets, i.e. a target time is set for completing a specific task. If
the task is completed in less time, the bonus paid is based on the time
saved.
Basis for setting targets:
i.

Work measurement: The best method, as targets are more likely to be

accurate. Depending on policy, it is usual to offer a bonus over and above the
basic wage for a standard performance of 100.

ii.

The estimate: Where a bill of quantities has been prepared and

estimated labour cost component of each operation is known, this can be
used as a basis for target setting.

iii.

Feedback: The records of output figures fed back from previous

projects are used as a basis for target setting bonus targets.
Piecework: Piecework is the payment of a fixed price per unit of work done.
For example the price is fixed so that a 75 % performance would earn the
equivalent of the basic daily wage, and output in excess of that would provide
the bonus. This principle of piecework system is particularly applicable to
repetitive work or to the manufacture or preparation of materials.
Guaranteed Daily Wage plus Bonus: On construction projects here
motivation is low and particularly where workers are new to the job, the
performance of labour can be lower than 50% of the standard. A scheme
paying a bonus only after 75 % performance is reached may offer no
incentive to the workforce, who may remain content to receive the minimum

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wage for their very low performance. Therefore it may be of benefit to start
bonus payments at a lower level of performance that all workers can reach,
at the same time guaranteeing the basic daily wage.
Task Work: This is another form of incentive, though not as effective as
financial incentives. The incentive is to finish a task early and go home, but
be paid for the full days work. The task set requires pre-measurement, such
as excavating a given length of roadside ditch, or completing a specified
concrete pour. The task will generally equate to a 75% performance over a
full eight-hour day. Thus if the workers rate of working is 100 he will finish
the task in 6 hours giving a time saving of two hours.
Advantages of Incentive schemes:
Worker is given an opportunity to earn more than basic wage as reward
for higher output.
Workers output will be higher, so that the job completed in less time, with
a more predictable performance and at lower cost.
The systems encourage self-discipline, and supervision can concentrate on
quality rather than output.
The worker himself tries to improve the efficiency of the method.
The operation of the scheme should keep site management on its toes, as
the workers will protest against any delays or mismanagement that
reduces their opportunity to earn bonuses.
Disadvantages of Incentive schemes:

In striving for higher output, quality and safety may be neglected.

If bonus rates are too low, the incentive to work hard may be destroyed.

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Differences in earnings between good and poor workers, or due to

inaccurate bonus rates, may give rise to bad feeling and labour
problems on the site.

Bonus systems are more complicated to operate, and require special

staffing and organizational procedures.

INCENTIVE SCHEMES AND MOTIVATION:

The basic objective of a construction firm is to achieve the so planned
progress for a project within the stipulated period of construction. Any delay
in completion of the project leads to increase in direct as well as indirect cost
of the project. Its the indirect costs which leads the construction firm to
heavy losses at times.
By introducing the incentive schemes and making it clear to the employees
about its benefits and procedure a sense of urgency could be developed
amongst them. Thus here the schemes will act as a motivational factor and
as we all know Money is the biggest motivator in itself.
Before introducing an incentive scheme in any firm or company it has to be
scrutinized in all possible ways the bad or good effects, the actual impact it
will have on the productivity etc by recruiting a team of expert panels
comprising of executives of higher management. The rules and procedure
involved in the scheme has to be clearly explained to each employee before
implementing it in order to prevent its bad impact. If handled expertly in a
professional manner, incentive schemes could play as a handy tool for every
Project Manager to manage the project in the most appropriate way possible
and achieve the required targets.

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CASE STUDY ON COMPANYs INCENTIVE SCHEMES:

The company for whom I render my services has introduced some additional
Incentive Schemes additional to those provided a year ago. The following are
some of the Incentives provided explained in brief:

Compensation :

a) Annual Increment: The annual increment is paid in the month of January

every year. But due consideration is given to those individuals who has not
joined as per the start of calendar month and increment for the first year is
done as per the completion of one year from the date of his joining. Then the
increment will take place every January every year. If due to grant of annual
increment, the basic pay exceeds the maximum of the scale, the amount of
annual increment shall be so reduced that the basic pay plus increment does
not exceed the maximum of the applicable scale. At no stage, the basic pay
shall exceed the maximum of the pay scale.
b) Ex Gratia: The Company provides Ex-gratia to all its eligible employees who
have completed at least nine months from the date of his joining. Employees
who are not eligible for Ex-gratia are paid certain amount as token of
appreciation.
c) Productivity linked incentive scheme: this incentive operates independently
of Ex-gratia. This incentive is provided to those depending upon its output
and productivity against the approved targets. Productivity incentive is paid
up to a maximum of 15% of basic pay.
d) Stagnation increment: The employee who reaches the maximum of their pay
scale is eligible for grant of a stagnation increment on the next due date of

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annual increment subject to maximum of three such stagnation increments.

The stagnation increment is treated as basic pay for all purposes except for
promotional increment. In case of employees who draw stagnation increment
in the lower grade and again reaches the maximum scale of the higher grade,
in such scale he/she will be eligible to receive only the remaining number of
stagnation increments.

a)

Allowances :
House rent allowance: The employee who has been transferred to a

new project away from the city is liable for the house rent allowance incase
the accommodation is not provided. The higher management executive is
provided with the above allowance provided they submit copy of necessary
document and receipt to the company.
b)

Transportation benefits: The higher management executives and few

selected personnel are provided transportation reimbursement in the form
fuel/oil expenses and actual conveyance on submission of necessary
documents. Other employees are provided certain fixed amount against each
as transportation allowance. On special cases where the individual has to
attend certain activities on behalf of the company the conveyance charges
are paid on submission of the conveyance form along with the proof.

c)

Meal allowance: The Company provides canteen facility and provides

canteen allowance to each employee against their attendance. Also on
special cases where the individual has to visit places on behalf of company
certain amount fixed as meal allowance will be reimbursed to the personal on
submission of bills.

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Leaves :

a) Casual / Sick Leaves: Every employee of the company has one leave every
week as a week off. If he desires can accumulate the leaves in every month
and can use it as casual or compensate sick leave. Every employee has to
maintain this leaves in the month or by the end of every year.
b) Privilege leave: Every employee has been provided 1.75 day per month as
privilege leave i.e. 21 days every month. The employee can use this leaves
monthly or on yearly basis but with due consideration with the management.

Welfare :

a) The company has provided with the medical facility in the form of
reimbursement in case any accident or injury occurs on site. Along with this
the company has also insured a specific amount on every individual which
will be reimbursed to the employees family member in case any threat to the
employees life takes place at the time of work.

CONCLUSION / RECOMMENDATION:
As discussed above it is cleared that every organization and company has to
introduce to a certain extent certain incentive pay schemes for their
employee in order to increase the productivity of a unit or team towards the
progress of the organization itself. Its the normal psychology of an individual

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that he should get an additional pay scheme apart from his basic payment
i.e. food allowance, traveling allowance and bonus which are the basic needs
as far as the individual is concerned.
If the company doesnt provide at least the above mentioned incentive the
individual thinks that there is no progress or appraisal for him in the same
company and starts for a new opportunity. The sense of self satisfaction and
secured nests is lost among the employees.
In addition to this the incentives based on productivity make the individual to
strive for more and as a result the required productivity is achieved within the
said targets. This incentive has to be introduced by every construction firm
and a special committee to be appointed for this to determine the individual
as a result the progress of the site may be achieved in the said time. The
incentives to be paid to the entire team as a whole for the target achieved.
Introduction of leaves as an incentive will be another option as no
construction firms introduces it. Medical insurance is another form of
incentive which gives a kind of feeling of security to the employee as a result
of which the output of the individual towards work also increases. Along with
the incentives provided certain rules and stipulations are to be also laid in
front of the employee so that no individual demands for the same. All the
system of incentive schemes to be made cleared to every employee.
Thus it is clear that productivity of the company can be increased by
increasing the productivity of each and every employee. The incentive
schemes can be used as a motivational tool towards increasing the progress
and achieving the said targets within the stipulated time in a construction
firm.

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BIBLIOGRAPHY / REFERENCES:
Productivity and Work Study Techniques.-

Nicmar

Personnel Management.- Nicmar

The A to Z of Practical Building Construction and Management.
-

Sandeep Mantri

Essentials of Management.
-Harold Koontz Cyril ODonnell Heinz Weihrich

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