Benchmarking Construction Labor Productivity

Abstract

There appears to be confusion regarding how to conduct a comprehensive benchmarking study, especially one on labor productivity. This paper details a six-step procedure for conducting a labor productivity benchmarking study. The procedure addresses the questions of how, who, and why. The procedure is illustrated using three case study projects. A labor productivity study has several unique features. First, the objective must be precisely defined. A study of labor productivity can be done for many reasons, and the purpose must be clearly defined because the objective influences subsequent decisions involving protocols. Procedures for how the study will be conducted to assure valid comparisons must be developed. Next, the key performance indicators (KPIs) must be determined and a procedure must be established for evaluating multiple KPIs. Labor productivity is unique in that there is no single KPI that can be used to define best performance. Multiple KPIs are proposed and procedures are developed. Once a procedure is developed for evaluating multiple KPIs, data are collected and the best performer is identified. The last question is, “why is a project/activity/entity the best?” This question is often ignored in most so-called benchmarking studies. Once the best project/activity/entity is identified, principles can be summarized as a prescription for productivity improvement.