2.5.6. Performance Indicators
Key Performance Indicators (KPI) are a set of quantifiable measures that a company or industry uses to gauge and compare performance in terms of meeting their strategic and operational goals. KPIs vary between companies and industries, depending on their priorities or performance criteria. Also referred to as “key success indicators (KSI)”.
Chan and Chan (2004) compiled Key Performance Indicators (KPI) for construction projects from exploration of literature and proposed a methodology for measuring each KPI. They identified construction time, speed of construction, time variation, unit cost, percentage net variation over final product, net present value, accident rate and environmental impact as KPIs for which they proposed an objective way of measuring performances. On the other hand, they identified quality, functionality and satisfaction of end users, clients, design teams and construction teams as KPIs which can only be quantified by using subjective measurement criteria
Generally performance dimensions may have one or more indicators, and could be influenced by various project characteristics. For example, Dissanayaka and Kumaraswamy (1999) found that project time and cost performances get influenced by project characteristics, procurement system, project team performance, client representation’s characteristics, contractor characteristics, design team characteristics, and external conditions. Similarly, A, Enshassi et al (2009) cited Iyer and Jha (2005) identified many factors as having influence on project cost performance, these include: project manager’s competence, top management support, project manager’s coordinating and leadership skills, monitoring and feedback by the participants, decision- making, coordination among project participants, owners’ competence, social condition, economic condition, and climatic condition. Coordination among project participants, however, was identified as the most significant of all the factors, having maximum influence on cost performance. Interestingly, Love et al. (2005) examined project time-cost performance relationship, and their results indicate that cost is a poor predictor of time performance. Elyamany et al. (2007) introduced a performance evaluation model for construction companies in order to provide a proper tool for the company’s owners, shareholders and funding agencies to evaluate the performance of construction companies in Egypt.
Measuring the performance of any construction project in terms of success or failure, despite looking simple, is in fact a very complex process. Modern construction projects even moderate in size are generally multidisciplinary in nature and they involve participation of designers, contractors, subcontractors, specialists, construction managers, and consultants. The objectives or goals of all participants need not be the same even in a given project. Hence to define the success or failure of a project without specifying the participant and without specifying the criteria for judging the performance holds no meaning. The present study has identified quality of work, timely completion, tender estimation, and tender preparation as measures of performance.
Zulu and Chileshe (2010) argue that to enhance project performance, the project implementers, project sponsors and other stakeholders should agree on the project goals. They should be guided by clear guidelines to ensure that projects cater the needs of the end- users and implementation is executed on- time. The project implementers should have a clearly defined plan having assigned responsibilities on how the deliverables ought to be defined including the required tasks that should be carried out and the risk involved. Project implementers should manage the scope of the project effectively; this involves defining goal setting and planning project stages. The project implementer must be prepared for any changes to the scope and find ways to effectively cope with the changes.
2.6. Empirical Framework
The study established by Chanzu ; Kwasira, (2016) that the performance of road construction projects is affected by county and national financing. As a result, successful completion of rural road projects is directly related to factors such as time, cost, quality, client satisfaction; productivity and safety. These factors fundamentally depend on proper budgeting for rural road projects. Inadequate financing and delay in the payment of contractors, design changes or variations, low motivation for project teams, poor planning and supervision affects rural road construction projects’ performance. This in essence affects successful completion of the rural road projects.
2.6.1. Factors Influencing Project Performance in different countries
The failure of any construction project is mainly related to the problems and failure in performance. Moreover, there are many reasons and factors which attribute to such problem. In US, Long et al (2004) remarked that performance problems arise in large construction projects due to many reasons such as: incompetent designers/contractors, poor estimation and change management, social and technological issues, site related issues and improper techniques and tools. Navon (2005) stated that the main performance problem can be divided into two groups: (a) unrealistic target setting (i.e., planning) or (b) causes originating from the actual construction (in many cases the causes for deviation originate from both sources). Chan and Kumaraswamy (2002) stated that construction time is increasingly important because it often serves as a crucial benchmarking for assessing the performance of a project and the efficiency of the project organization.
In Nigeria, Chan and Kumaraswamy (2002) remarked that effective communication and fast information transfer between managers and participants help to accelerate the building construction process and performance. Kuprenas (2003) studied the impact of the use of a project management based organizational structure, project manager training, frequency of design meetings, and frequency of design reports on design phase cost performance.
In East Africa countries such as Kenya, the factors affecting cost performance are: project manager’s competence; top management support; project manager’s coordinating and leadership skill; monitoring and feedback by the participants; decision making; coordination among project participants; owners’ competence; social condition, economical condition and climatic condition. Coordination among project participants was as the most significant of all the factors having maximum influence on cost performance of projects (Iyer ; Jha, 2005). According to Kithinji and Kamaara (2017). Project finance that Budgets, sources of finance, Cash flows influenced the government infrastructure projects Completion in Meru County.
David et al (2015) reveal many road projects fail in time performance, others fail in cost performance and others fail in other performance indicators. In the past there were many road projects which finished with poor performance because of many evidential reasons such as: obstacles by client, non-availability of materials, road closure, amendment of the design and drawing, additional works, waiting the decision, handing over, variation order, amendments in Bill of Quantity (B.O.Q) and delay of receiving drawings. There are other indicators for problems of road contractor’s performance in developing countries such as project management, coordination between participants, monitoring and feedback and leadership skills. In addition, political, economic and cultural issues are three important indicators related to failures of road projects’ performance in the Country (Becerik, 2007).
Developing countries are experiencing delays in the constructing industry which influence completion of the projects. According to Mustapha (2013) research on the factors causing delays in project delivery in Ghana found out that the major delay factors were: Delay in honouring payment certificates, Delay by sub-contractors, Fluctuation of prices, Difficulty in accessing bank credit and Client initiated variations. While Asiamah and Asiamah (2013), study on causes of delays in construction of public buildings in Ghana revealed that the following were the main causes of delay: Method of construction; long bureaucratic process of honouring certificates; Variation orders; Cash flow problems and attitude to decision making.
188.8.131.52. South Africa
According to Ramabodu and Verster (2013), empirical analysis in South Africa found change in scope of work on site, incomplete design at the time of tender, contractual claims, lack of cost planning and monitoring of funds, delays in costing variations and additional works as important overrun factors in South Africa.
In South Africa, Baloyi and Bekker (2011) researched on causes of construction cost and time overruns and revealed that the following were the most important causes of time overruns: Incomplete drawings; Design changes; Clients’ slow decision-making; Late issue of instructions; and Shortage of skilled labour. Alaghbari, Kadir and Salim (2007) studied the significant factors causing delay of building construction projects.
In Malaysia and found out that the major causes of delay were: Owners’ financial difficulties and economic problems; Contractors’ financial problems; Late supervision and slowness in making decisions; Consultants’ slowness in giving instructions; and Lack of materials on market (Kithinji and Kamaara, 2017).
Prinsloo, Kasese and Hoffman, (2011) study has shown that time and cost overruns are a real problem in the Botswana local authorities. Leading causes being inefficient contractor’s management, low productivity of contractor’s workforce, low productivity of contractor’s equipment, client’s responsibility, and design errors by consultants as being the highest ranked causes.
From the studies conducted above, the major factors affecting the performance of contractors include:, incompetent designers/contractors, poor estimation and change management, effective communication and fast information, project manager’s competence; top management support; project manager’s coordinating and leadership skill; monitoring and feedback by the participants; decision making; coordination among project participants; owners’ competence; social condition, economical condition and climatic condition slow decision making and bureaucracy in client organization, inadequate planning and scheduling, Project finance that Budgets, sources of finance, Cash flows, availability of personnel with a high experience and qualifications, average delay in payment from owner to contractor, information coordination between client and project parties, team leader experience, planning effort, adequacy of design and specification, cost progress monitoring, delays, unavailability of resources.