Reward and Productivity in Construction

Introduction

In every organization, the productivity and performance of the employees are important to increase the effectiveness of the organization in the market. The performance of the employees in their tasks depends on the demanded responsibilities of the organization. However, according from the past research studies that focuses in the organization, the rewards and other incentives given to the employees can increase the productivity and effectiveness in the performance of the people. In this paper, the focus centers in the issue of reward and productivity, and the steering question is “how does reward system increase productivity and efficiency in construction?”

What is Productivity in Construction Industry?

The operations in the field of construction is managed and controlled through the use of schedule. All the activities are monitored according to the appropriate projects and have a wise allocated budget (TBR, 1980). Because of the strict compliance on the activities, the performance of the employees takes an important role. Therefore, the productivity that each employee will exert should be maintained and should reflect in the performance.

Based on the statistics, the long-term productivity has an impact to increase the trend in the performance in many of the industries. However, the construction industry cannot be the same as for the mining and manufacturing industries. This is due to the measurement and difficulties regarding the real inputs and output which are unique to the construction industry. But, within the comparison of the industrial sectors, the construction productivity definitely varies because of the application of the technological and technical supports. And in the continuous development of processes in the construction productivity, the potentials to enhance the productivity are discovered not only on the machineries or materials but on the labor. The performance of the people under the construction industry is another important factor to gain the advantage because of their knowledge, skills and innovativeness (BFC, 2006).

The Rewards

Again, for most on the organizations, the rewards or incentives are awarded for the people who showcases the productivity and quality performance during the given time and which created a significant impact in the overall performance of the organization. Rewards in construction industry can be also applied to increase the productivity. With the use of reward system, the unnecessary forces are reduced to increase the strength of the positive ones. This simply means that the labor forces, knowing that there is an existed reward in the system will change their traditional work to achieve the most desirable outcome. The efforts and performances of the employees guarantee that the organization receives the productivity from the people and delivers the same productivity to the market. The productivity, in long practice, can be achieved and influence the other changes in the area of work to gain the same effect. If there is a great productivity in the organization, there is an assurance that the people comply on the objectives of the organization and at the same time qualified to receive the reward. This rewarding system is a motivational factor that affects the behavior of the worker but adds value to their system. Obviously, the business leaders use this approach as a best way to improve the productivity but should be apply depending on the specific situation and not placing the financial aspect of the organization at risk (Mattila, Li, & Pocock, 2007).

Pentagram of Productivity

The productivity on an organization signifies the measurement on how the entity uses the resources to produce the desirable outputs. In the attempt of the organization to set the standards in aiming for the productivity, there are discover links between the individual, firm and sectors, and the entire economy (BFC, 2006). To increase the knowledge in productivity, there are five most used productivity concepts:

1. Labor productivity, based on gross output that measures the labor requirement per unit of output

2. Labor productivity, based on value-added that are useful in the analysis of micro-macro links, such as an individual industry’s contribution to the economy

3. Capital-labor MFP (multifactor productivity), based on value added that can also be part in the analysis of micro-macro links in the contribution of the industry in the economy.

4. Capital productivity, based on value-added which represent the idea regarding the changes in capital productivity, there is a degree of output growth.

5. Multi-factor productivity which measure through the technical change

Conclusion

Predicting the construction productivity is difficult, therefore, it is important that the entire management can control and administer each project. The contribution of comprehensive project management and labor are good foundation of successful construction activities.

References:

BFC, (2006) Measuring Productivity and Evaluating Innovation in the U.S. Construction Industry, The Building Futures Council, Accessed 03 Aug 2010, from http://www.thebfc.org/uploads/BFC_Productivity_whitepaper.pdf

Mattila, K.G., Li, K., & Pocock, J., (2007) Demonstrating Construction Productivity, American Society for Engineering Education, Accessed 03 Aug 2010, from http://www.icee.usm.edu/ICEE/conferences/asee2007/papers/3125_DEMONSTRATING_CONSTRUCTION_PRODUCTIVITY.pdf

TBR, (1980) Scheduled Overtime Effect on Construction Projects: A Construction Industry, Cost Effectiveness Task Force Report - The Business Roundtable, Accessed 03 Aug 2010, from http://www.curt.org/pdf/156.pdf