CHAPTER ONE

INTRODUCTION

1.1 Background To The Study

Human Resource Management (HRM) is of strategic importance in all organizations. It contributes to the success of the organization and creates competitive advantage for the organization (Rana & Rastogi, 2010). The way HRM practices and policies take shape also affects the employee’s experiences of work and the employment relationship (Sambasivan, 2007). HRM is therefore important in any organization. The construction company is no different in this regard. However, the researcher suggests that specific features of the construction company create specific challenges for HRM in that context, which are not widely recognized in the general management, HRM or project management (PM) literature (Thomas, 2012).

Construction is a process that consists of the building or assembling of an infrastructure. Large scale construction is a feat of multi-tasking. Normally the job is managed by the project manager who acts as the representative of the client/developer (Hills et al., 2008) while the construction manager is tasked with the role of supervising; the construction works, design engineer, construction engineer or project architect (Rojas & Aramvareekul, 2013). For the success of construction of any sustainable development project, many aspects must be taken into consideration, inclusive of planning and management, such as human resource, safety and health, construction delays, the designs of architecture and engineering, material availability and quality; the clients need, and financial or economic limitations.

In this age of rapid growth of globalization, many construction firms focus on the effective use of Human Resource Management (HRM) practices to gain competitive advantage to achieve the organization’s objectives and ensure optimal performances among the employees. Construction industry is an important part of the economy in many countries and often seen as a driver of economic growth especially in developing countries. Typically, construction industry contributes to 11% of Gross Domestic Product (GDP) in most developing countries(RoK, 2003). The Nigerian construction industry is one of the most important sectors in the country’s economy whose level of activity is an indicator of the general economic performance of the country.

The nature of construction industry, presents challenges and peculiar requirements in the developing nations (Ofori 1999). In order to check on performance and productivity, some measures in the construction industry have to be taken at various stages of socio-economic development. Many countries have set up special agencies to monitor the operations in this industry and harness their potential for improvement, although they have different objectives, responsibilities and levels of authority. The Construction Industry Council, for example in the UK, is a board which was initiated by the players in the construction industry to represent and support these players at national level. However, in developing countries like Nigeria the counterpart agencies like National Construction Authority and the National Construction Council of Tanzania (Miles and Neale, 1991) are government agencies controlled and managed by the government. The agencies in developing nations therefore are restricted in their mandate rather than as assigned by the government authorities. In doing so, they are likely to exclude key players in the construction industry especially the masons and casual labourers.

Productivity happens to be a significant aspect of construction industry that may be used as an index for efficiency of production. Productivity is defined as a relationship between output produced by a system and quantities of input factors utilized by the system to yield that output (Mbiti, 2008). Productivity is considered one of the most outstanding factors influencing timely completion of a project and cost control in all construction projects. Efficient management of construction resources can lead to higher productivity that can help to achieve cost and time savings (Sebastian & Raghavan, 2015).

Productivity remains an intriguing subject and a dominant issue in the construction industry, promising cost savings and efficient usage of resources. However, Rundle (1997) identified construction productivity as a cause of great concern. Ghate and Minde, (2016) concurred with Rundle’s views in observing that construction productivity seems to have declined. On the other hand, Lawal (2008) reported that in Nigeria, construction workers in the public service have almost zero productivity. Kothari (2004) identified poor productivity of craftsmen as one of the most daunting problems confronting the construction industry especially in developing countries.

Olomolaiye et al (1998) briefly studied labour productivity on construction sites in Nigeria. Their study concluded that there was a need for establishing output figures on various construction sites through time study techniques. It was concluded that method studies and research results should be disseminated not only to large firms but also to small firms so the most productive working methods (or best practices) could be adopted by operatives, resulting in increased output without necessarily increasing physical effort. Lim et al (1995) studied factors affecting productivity in the construction industry in Singapore. Their findings indicated that the most important problems affecting productivity were: difficulty with recruitment of supervisors; difficulty with recruitment of workers; high rate of labour turnover; absenteeism from the work site; and communication problems with foreign workers. Olomolaiye et al (1996) studied factors affecting productivity of craftsmen in Indonesia, with their findings indicating craftsmen in Indonesia spent 75 % of their time working productively. Five specific productivity problems were identified: ie lack of materials; rework; absenteeism; lack of equipment; and tools. Wachira (1999) did a study in Kenya construction firms and found that that labour productivity is affected by many factors including, experience of the workforce; motivation; organisation of the work; type and condition of tools and equipment; and continual monitoring of performance. Tahir et al., (2015) observed that a lack of skilled labourers’ low amount of pay, working seven days per week without taking a holiday, drawings and specifications alteration during execution of project and poor relations between labour and supervisors were the key issues. In another study, Lamka (2015) identified three major factors that affect labour productivity in masonry and painting namely; lack of training/skills, work planning & scheduling and incompetent supervisors. A critical look at these factors reveals that they are hinged on the human resource management practices. As summed up by Sebastian and Raghavan (2015), lack of proper managerial efficiency is the basic reason for all these issues. Pardo and Fuentes (2003) stated that 15% of productivity loss occurs due to resource management and 25% loss due to working environment. Ghoddousi (2015) revealed that Chief Executive Officers (CEOs) regard major aspects of human resources management as the most effective factors to increase productivity in construction projects. Monetary features of human resource management such as amount, timeliness of payments and remuneration, as well as intrinsic aspects e.g. satisfaction, ethical behaviour, promotion, individual relationships and job security were among the factors perceived by CEOs as the most influential determinant of productivity in road projects in Iran (Makulsawatudom, 2001).

Although many studies have strived to explain the effects of human resource management practices on the performance of employees in the construction companies, a few have carried out an empirical study on the effect of human resource management practices on productivity and none has looked at the moderating effect of employee engagement on labour productivity in the construction industry in Uyo, Nigeria. This research was, therefore, to fill the gap by carrying out an empirical study to establish the effect of human resource management practices on labour productivity. Mbiti (2008) in his study in Kenya found that, there is an abundance supply of semi-skilled and unskilled labour which needs to be utilized. In order to provide social and economic advantage to the population, the construction industry has been under pressure to embrace best practices as one way of creating job opportunities for operatives in the job market. Construction process is an important means of expanding the job market in the economy and therefore every effort should be made to improve labor productivity. An improvement in labor productivity will lead to enhancing project productivity and making it attractive to project sponsors.

The labor productivity on site might be affected negatively by a variety of factors which include; extraneous reasons like adverse effects of the weather, NCA, NEMA, local authorities, stakeholders and legislation. Masu (2006) argues that Nigeria being a developing country is not an exception to the trends in other countries which are at crossroads with the building teams due to the later not delivering the projects within the stipulated time. Delays on site has caused losses on project’s profit to the contractor; increased cost to the client and strained the working relationship between the parties in a project. This has been brought about by the lack of adequate information on labor productivity rates in the construction industry in Nigeria(Wachira, 1999). The inaccurate determination of activity duration has in most cases led to the incorrect estimation of contract periods. Delays in completion of projects in the construction industry are indicators of productivity problems and hence a big challenge facing the construction industry. An improved labor productivity is one of the key determinants of projects prediction and therefore an important ingredient of construction delivery.

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