CHAPTER ONE

INTRODUCTION

1.1              Background of the study

Construction performance and productivity improvement are the focus areas in construction industry for any nation. Productivity is expressed in many ways but generally as the ratio of output to resources which are consumed to produce that output. Productivity is the average direct labour hours required to install a unit of material. In construction, labour productivity is often expressed as a number of labour hours per unit of work; and or the quantity of work performed by a crew during a standard eight-hour day (Fagbenle, Ogunde and Owolabi, 2011). In a broader sense, it may also measure how much value a worker adds to the economy per unit time.

Productivity in the construction industry is of importance to the economic health of a nation. Labour productivity has always been a key issue for project managers to improve their project results and productivity studies are getting special emphasis in developing countries (Musamil and Khurshid, 2014). A primary task in construction is to bring about a climate conducive for management, workforce and resources to combine effectively and efficiently towards raising productivity, which is achieving a given level of output with fewer inputs, while also providing high reward to those involved (Harris and McCaffer, 2001).

The construction industry is one of the most labour intensive industries and human resources cover a large proportion of the project cost. Particularly, the construction industry in Nigeria has remained largely non-mechanized with heavy reliance on large number of manual workers (Aina and Omoniyi, 2014). Labour is defined as a task that requires the exertion of body and mind or both (Fagbenle, Ogunde and Owolabi, 2011), and remains the most essential and complex resources that the construction manager will have to deal with. The unprecedented rise in construction demand, shortage of skilled construction workers, enervating weather conditions, complexity of the construction process, poor supervision and delays in receiving instruction have been cited as contributing to the decline in labour output in Nigeria construction sector (Fagbenle, Adeyemi and Adesanya, 2004), and that of the developing countries like New Zealand (Page and Norman, 2014). Failure by project managers to effectively motivate operatives has been identified to cause productivity to decline. Those managers that seek to understand human behaviour and apply the principles of motivation theory to motivating the construction workers can and nearly always benefit through improved productivity. The construction manager is expected, among other things, to develop ability to motivate and develop the spirit of teamwork among them as workforce motivation is an important aspect in achieving an environment of good industries relations. In fact, it is in

Lai (2009) opined that motivated employees are the cornerstone of any successful enterprise. Understanding motivation theory and being able to apply this theory to the labour force plays an important role in increasing productivity (Gonzalez, 1991). Corroborating this assertion, Fagbenle, Ogunde and Owolabi (2011) affirmed that researchers have suggested that in order to have any meaningful improvement in construction workers’ performance, contractors must study the peculiarities of their workers and also identify their main motivators. Labour productivity has always been an issue for project managers in order to produce results. Concerns have also been raised about the choices of particular scheme either financial or non-financial, whether incentive schemes actually raise construction workers output in all circumstances, and the measurement of the actual impact generated (Abdusalam, Faki and Dardau, 2012).

1.2              Statement of the Research Problem

The construction industry in Nigeria is still largely labour intensive and most empirical studies have, unfortunately, revealed that the output of the industry is quite low when compared with many developed countries (Fagbenle, Adeyemi and Adesanya, 2004; Aina and Omoniyi, 2014). Workmen’s productivity is central to cost and time performance of construction projects. There have been frequent delays and cost overruns in construction projects and poor productivity has been identified as one major contribution (Siriwardena and Ruwanpura, 2012). Yet, it has also been observed that most projects managers and site supervisors do not understand how to identify the operative’s goal and link them with organisational reward in order to motivate the operatives, as a result operatives get frustrated and productivity suffers (Nwachukwu, 1998). Employees occupy a strategic role in any organisation; they are responsible for converting input resources into productive outputs. Therefore, they ought to be adequately and fairly compensated for their effort in order to increase productivity (Ude and Coker, 2012). Construction workers represent a very important asset in construction industry and the ability of a company to retain its employees is associated with its ability to recognise their contribution to the achievement of company goals (Aina, 2014). Furthermore, the productivity of individuals, which in turn affects the productivity of a firm, is a very important consideration because it measures a firm’s competitive power. It is an indicator of a firm’s profit margin, a measure of the firm’s survival in business, a yardstick for remuneration of employees, and a means of recognition of hard work (Aiyetan and Olutuah, 2006).

It has been said that most construction firms select incentive schemes haphazardly, sometimes leading to ineffectiveness and abuse of incentive programmes. A major challenge faced by construction firm is related to decision on how to select incentive schemes, and what factors to consider in the selection of a scheme. Despite the extensive use of incentive schemes in construction, studies have not examined the method of selecting and the factors influencing the selection of incentive schemes (Aina and Akinyemi, 2014).

Most of the previous studies concerned with the use of incentive schemes on construction sites as well as construction workers’ productivity were carried out in one or two states of Nigeria which were mostly in the western part of the country (Fagbenle, Adeyemi and Adesanya, 2004; Aina and Olutuah, 2006; Aina, 2011; Fagbenle, Ogunde and Owolabi, 2011; Aina and Akinyemi, 2014; Aina, and Adesanya, 2015) and the only one carried out in a state in the south-south was limited to painting activity. None of the previous studies had compared productivity among states to take account of differences arising from geographic location as noted by Odesola (2012). Odesola (2012) was concerned with ascertaining the contribution of selected productivity factors to the productivity of construction labour in the South-South zone and established the level of productivity of construction workers in about five activities (operations) without examining the influence or effect of incentive schemes associated with the productivity level of construction workers. To this end, this study intends to examine and evaluate the impact of incentive schemes on construction workers’ productivity level in the Cross River state, Nigeria to bridge the paucity of research and literature on the subject in the area.

1.3      Research Questions

To give proper focus to the study, a number of research questions were raised. These include:

1.      What are the significant factors affecting the use of incentives schemes on building sites?

2.      To what extent have incentive schemes been used on building sites in the study area?

3.      What relationship exists between the use of incentive schemes and productivity level of construction workers?

1.4       Aims and Objectives of the study

The aim of this study is to examine the use of incentive scheme, its effects and contribution to productivity level in construction industry in Cross River state with a view to achieving optimum productivity. The objectives are to:

(a)   Examine the factors affecting the use of incentive schemes on building sites in the study area;

(b)    Assess the level of use of selected incentive schemes on building sites in the study area; and

(c)   Determine the relationship between the use of incentive scheme and workers’ productivity level for selected building operations.

1.5       Research Hypotheses

To achieve the above objectives, the following research hypotheses were formulated:

H1           There is no significant variation in the perceptions of the respondents about factors affecting the use of incentive schemes;

H2           There is no significant variation in the level of use of selected incentive scheme among States in the study area; and

H4           There is no significant relationship between the use of incentive scheme and workers’ productivity level.

1.6        Significance of the study

The importance of this study can be fully appreciated when one realises the importance and the contribution of the construction industry to the Nigerian economy. Productivity is of great importance to the individual worker, the organisation and the national economy at large (Aina and Omoniyi, 2014). Monitoring and measuring performance of incentive schemes is crucial for successful implementation of incentive schemes. Incentive schemes that are not monitored and evaluated firmly and systematically against intended business outcomes would have little or no business impact. If a process is not measured it cannot be managed. Incentive schemes require continual review and redirection (Aina, 2011). From the result of this study construction managers will have insight into the extent to which the incentive scheme they are currently utilising can impact upon their workers’ output levels. This will help them in deciding whether to maintain or modified the existing schemes or altogether opt for other schemes that could guarantee increased productivity. Manager will also have improved control, and will have a better understanding of the capabilities/limitations of the organisation. Their decision making abilities will also be enhanced by knowledge of the impact of incentive scheme on their workers.

1.7       Scope and delimitation of the study

This study will examine the practice of incentive schemes in building projects being undertaken in Cross River states. The study will be carried out on building construction sites undertaken by organised construction firms of all categories (small, medium and large) or ownership structure (indigenous or multinational)

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