When the subject of improving performance and productivity is examined, it is important to know what tasks workers are doing and how well the workers are doing them. This report examines industry practices concerning job performance evaluations. Electrical contractors may use this information to either start or improve their own system of evaluating job performance. This report looks at several questions including: how electrical contractors evaluate the job performance of workers; what criteria and/or attributes should be considered in the evaluation; and for what purposes should the results of a performance evaluation be used.
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In 2003, ELECTRI International—The Foundation for Electrical Construction, the research arm of the National Electrical Contractors Association (NECA), funded a research project to develop a model pre-construction planning process that NECA members could use to improve their planning practices. The study critically evaluated the relationship between pre-construction planning and project performance. As part of the research process, in-depth project-specific information was collected on the planning effort and project outcome for several “successful” and “less-than-successful” projects. This data collection effort culminated in a detailed analysis of the planning practices of these two groups to identify clear differences between successful and less-than-successful projects. Ultimately, 27 randomly-selected companies from 11 states agreed to participate in an interview for the research project. Data was collected on 29 “successful” and 27 “less-than-successful” projects.
The planning activities that were performed on the successful projects were used to develop the model Electrical Pre-Construction Planning Process. The model process was fashioned after those projects that performed good planning and achieved a successful outcome. As such, the model planning process incorporated the best planning practices in the electrical construction industry.
The planning process of successful and less-than-successful projects were compared to the model process, and ultimately, it was discovered that those planning processes that more closely matched the model resulted in more successful performance.
Ultimately, the study responded to the research questions and hypotheses. In particular, evidence supported the two hypotheses, and a tool was developed to help contractors evaluate their preconstruction planning process.
Download Pre-Construction Activities Tables and Forms
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When estimating project costs, contractors plan for historically achievable productivity under ideal labor/job conditions. Both owners and the legal system throughout North America recognize contractors have the right to an adjustment in contract prices due to changing conditions and their impact on labor productivity. Contractors need a logical and fair approach in order to estimate factors affecting labor productivity.
The principal researcher, Dr. Awad Hanna, University of Wisconsin – Madison, begins with the premise that, when productivity is lower than anticipated, contractors can suffer considerable financial loss. Dr. Hanna conducted an in-depth analysis of quantified productivity factors and data from 145 projects across North America. The research resulted in development of a new standard electrical contractors can use to calculate Loss of Productivity.
Contractors can use the approach proactively for forward pricing as the standard allows for anticipating adverse conditions. It can also be applied retroactively when contractors need to claim for extra construction costs while projects are underway.
Electrical contractors typically allocate 33 to 50 percent of a project’s total contract budget to labor costs. Labor is the project element containing the most risk; as a result, financial success hinges upon the ability to manage labor effectively and maintain worker efficiency. In circumstances of schedule acceleration and other malevolent project conditions various situations can arise decreasing the labor’s efficiency or productivity. These situations, commonly referred to as factors affecting labor productivity, can be initiated either by the general/CM contractor or by the project owner. This report seeks to quantify these factors. Productivity factors that are quantified include shift work, overmanning, owner-furnished items, beneficial occupancy, stacking of trades, and cumulative impacts.
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Electrical contractors are frequently faced with the need to compress or accelerate the construction schedule as a result of added scope, delays and/or a late start of activities. The most common approach to schedule acceleration is the use of overtime. Past research studies concluded that placing workers on scheduled overtime reduces labor productivity. Although several research efforts have studied the effect of overtime on labor efficiency, these studies have unknown data sources and were conducted many years previously.
This study is focused on the analysis of scheduled and unscheduled (sporadic) overtime on labor productivity. There are two components of this research; qualitative and quantitative. The qualitative aspect aims to document the views of electrical contractors regarding the use of overtime and other schedule compression techniques such as overmanning and shiftwork. The quantitative component deals with macro and micro analysis of overtime. The macro and micro approaches are used for analyzing the impact of both sporadic and scheduled overtime. The macro approach is used to analyze projects where no fixed overtime schedule is utilized or mixed work schedules are used throughout a week. The micro approach is used to analyze projects that utilize a fixed overtime schedule, such as 5×10 or 6×10 throughout a certain number of weeks. This study presents the results of a statistical analysis of productivity data collected from several projects that used a variety of overtime scheduling techniques. The statistical analysis includes several productivity models that can be used to estimate electrical labor inefficiency within a project, given both its scheduled overtime per week and the total successive number of weeks of overtime.
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Change is inevitable on construction projects, primarily because of the uniqueness of each project and the limited resources of time and money that can be spent on planning, executing, and delivering the project. Change clauses, which authorize the owner to alter work performed by the contractor, are included in most construction contracts and provide a mechanism for equitable adjustment to the contract price and duration. Even so, owners and contractors do not always agree on the adjusted contract price or the time it will take to incorporate the change. What is needed is a method to quantify the impact that the adjustments required by the change will have on the changed and unchanged work.
Owners and our legal system recognize that contractors have a right to an adjustment in contract price for owner changes, including the cost associated with materials, labor, lost profit, and increased overhead due to changes. However, the actions of a contractor can impact a project just as easily as those of an owner. A more complex issue is that of determining the cumulative impact that single or multiple change orders may have over the life of a project.
The Construction Industry Institute (CII) took on this issue by forming the Cumulative Change Order Impacts Research Team. The research team was tasked with investigating the cumulative impact of change orders on electrical and mechanical efficiency.
This research resulted in the development of two models, one to identify if a construction project has been impacted as a result of cumulative change, and the other to predict the probable magnitude of the cumulative impact due to that change. A summary of the research follows, including recommendations for both owners and contractors on the approaches each party could take that would increase the effectiveness of the overall project while focusing on the common goal of project success.
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Labor productivity is one of the most important factors that affect the profitability of contractors. Stacking of trades is one of the many influences that affect labor productivity. This research primarily concentrates on the effects stacking trades have on labor productivity. This chapter will address the connection between labor productivity and profit, definitions used in this research, problem statement for this research, purpose of this research, and the methodology used to study stacking of trades.
The construction industry is very competitive and profit margins are small and any mistake can be a company’s last (Adrian 1987). To reduce the risk of business failure, contractors would like to increase their profit margins. To increase a company’s profit a contractor may increase prices (revenue) or minimize costs. A contractor could attempt to raise his or her prices; however, with the high level of competition a contractor could be priced out of the market. The contractor is left with controlling costs as the only option in order to increase profits.
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Labor costs for electrical contractors can reach 40 percent to 60 percent of total construction costs. With that much invested, contractors need a workforce that is both stable and productive. Our research has found two common problems that reduce productivity: absenteeism and turnover. While that is not surprising, the construction industry pays little attention to these problems. That might be because contractors believe that these problems just come with the territory. But once contractors understand why the problems occur, they can make some changes that will decrease absenteeism and turnover, and that should lead to an increase in productivity. That is why ELECTRI International–The Foundation for Electrical Construction, Inc. (ELECTRI International) decided to do this study. Our team reviewed existing research on these problems in the construction and other industries. We then created surveys to collect two types of information:
- Qualitative information to find out why the problems exist
- Quantitative information to find out how bad the problems are
For our qualitative research, we asked both managers and electricians for their input. Most managers believed they could do little about the problems. But when electricians listed reasons for absenteeism and turnover, they named two that management can do something about: injuries and unsafe working conditions. Electricians gave the following additional reasons for absenteeism and turnover:
- Poor management
- Length and size of jobs
- Travel distance to the work site
The surveys also listed the following as ways to reduce absenteeism and turnover:
- Better management
- More recognition by management
- Incentive programs
- A 4-day, 40-hour workweek
- Availability of overtime
For our quantitative research, we created another survey to gather information on electrical construction projects. We analyzed this information on two levels:
- Macroanalysis (an entire project)
- Microanalysis (specific tasks)
For the macro analysis, we gathered information on 35 completed projects. For the microanalysis, we gathered information each month on five ongoing projects. We then used statistical analysis to learn the effect of absenteeism or turnover on productivity. As the last step in this research project, we asked for examples of best management practices. Those examples (see chapter 7) will help contractors increase productivity in their companies.
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This What-To-Do-Guide for Schedule Acceleration and Compression is intended to assist electrical subcontractors in minimizing the impact of schedule acceleration and compression and to provide guidance for recovering additional job costs due to acceleration. Schedule acceleration and compression is a serious problem for electrical contractors. As an aid to the electrical contracting industry, this publication was developed for The Electrical Contracting Foundation by researchers at Penn State and the University of Wisconsin-Madison.
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