Evaluation Of Incentive Schemes On Labor Production In Ghana Construction Industry

Evaluation Of Incentive Schemes On Labor Production In Ghana Construction Industry

Abstract

Productivity is directly linked to motivation, and motivation is, in turn dependent on productivity. Suitable motivation is, therefore, a contributor to maximising workers’ productivity. The low motivation of construction workers has contributed significantly to the declining productivity that cannot be determined in the construction industry. The study seeks to unravel the factors that affect construction workers’ motivation and the corresponding effect of the identified motivational factors on workers’ performance and overall productivity.

Chapter one

Introduction

• Background of the study

The construction industry is not only an intrinsic part of the economy, but also a significant part because of its contribution to the economy (Aina and Omoniyi, 2014). Globally, the construction sector is recognised as a strategic part of every society, it is one of the largest employers and attracts a large amount of investment (both public and private), while being responsible for providing necessary infrastructure to  the  nations  (Hickson  and  Ellis, 2014). Construction labour productivity demands the attention of both experts and academics because it affects project cost and time overrun (AbdulKadir,  Lee  and  Sapuan,2005, Siriwardena and Ruwanpura, 2012; Muzamil and Khurshid, 2014). Most studies have shown that productivity or output, especially in developing countries, are low (Fagbenle, Adeyemi and Adesanya, 2004; Tran and Tookey, 2011). The construction sector is also characterized by poor time and cost performance, sometimes leading to outright abandonment of the projects and one of the factors responsible for overruns is poor productivity in the sector among others. Some observers of the trend in the construction industry concluded that much of the leakage associated with rising building costs had occurred in labour, where weak output had eroded investments made by contractors (Hickson and Ellis, 2014).  Thus, improving the productivity of labour constitutes a prime target in construction (Tran and Tookey, 2011).

Productivity is expressed in many ways but generally as the ratio of output to resources which are consumed to produce that output. It is described as 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.  On the other hand, monitoring and measuring performance of incentive schemes to raise productivity level 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).Incentives  schemes are  usually utilized  in  the construction  industry to  generate higher level of performance from works, promote greater output, reduce cost of production and  increase  workers’  earning  through  a  system  which  recognizes  difference  in performance  and  ties  pay  of  performance.

Lai (2009)  opined that  motivated employees are the  foundation stones  of any  fruitful enterprise. Understanding  motivation theory  and being  able to  apply the theory  to the labour  force  plays  an  important  role  in  increasing  productivity  (Gonzalez,  1991). Substantiating  this  assertion,  Fagbenle,  Ogunde  and  Owolabi  (2011)  affirmed  that researchers 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).

 

 

Statement of the problem

Lack of workers’ motivation on construction sites has been identified and this has contributed the high employee turnover (Thomas et al, 2004). This has been a result of the difficulties in emphasising the positive side of worker motivation. These have generated numerous attempts over the years to enhance workers’ motivation as it is essential to eliminate the negative side of motivation which may be more psychological. According to Shun (2004), management is often frustrated by lack of motivation generated by the end of the year bonuses. Foremen, who form part of worker strength, are often unable to motivate the average craftsman today (Business Roundtable, 1989). There is therefore the need for craftsmen and other subordinates to be motivated by providing them with the right conditions and opportunity. A correlation exists between worker motivation and performance therefore, there is the need for worker to always feel motivated in order to increase performance.

According to Thomas et al, 2004, an unsatisfactory work environment can have an adverse effect on worker motivation that tends to make minimal effort towards work thereby lowering performance. This has contributed dwindling productivity that has been a major problem confronting the construction industry today which has led to the declining productivity every year for the past decades. Aggregate productivity measurements and studies have shown long-term decline with little improvement. Another major study revealed that productivity cannot be determined if it has increased, decreased or remained constant (Haskell, 2004). The labour cost component of direct capital cost of large construction projects gives the indication that, there is the need for its maximum utilization so as to be productive.

Objective of the study

The objectives of the study are;

1. To identify factors that affect construction workers’ motivation at the workplace
2. To ascertain the relationship between incentive schemes and labour production in construction industry in Ghana
3. To ascertain the relationship between the use of incentive scheme and workers’ productivity level

Research hypotheses

For the successful completion of the study, the following research hypotheses were formulated by the researcher;

H₀:  there are no factors that affect construction workers’ motivation at the workplace

H₁: there are factors that affect construction workers’ motivation at the workplace

H₀²: there is no relationship between the use of incentive scheme and workers’ productivity level.

H₂: there is relationship between the use of incentive scheme and workers’ productivity level.

Significance of the study

The study will be very significant to students and construction companies. The study will give a clear insight on the evaluation of incentive schemes on labor production in Ghana construction industry. The study will also serve as a reference to other researcher that will embark on the related topic

Scope and limitation of the study

The scope of the study covers evaluation of incentive schemes on labor production in Ghana construction industry. . The researcher encounters some constrain which limited the scope of the study;

1. a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
2. b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.

1.7 DEFINITION OF TERMS

Incentive scheme: An incentive program is a formal scheme used to promote or encourage specific actions or behavior by a specific group of people during a defined period of time. Incentive programs are particularly used in business management to motivate employees and in sales to attract and retain customers

Labour production: Labor productivity measures the hourly output of a country’s economy. Specifically, it charts the amount of real gross domestic product (GDP) produced by an hour of labor. Growth in labor productivity depends on three main factors: saving and investment in physical capital, new technology, and human capital

Construction industry: construction industry. Sector of national economy engaged in preparation of land and construction, alteration, and repair of buildings, structures, and other real property.

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