PROJECT PERFORMANCE MEASURING

Performance measurement is defined as the process of evaluating performance relative to a defined goal. It provides a sense of where we are and, more importantly, where we are going (Rose, 1995) Rose further stated that measurement could guide steady advancement toward established goals and identify shortfalls or stagnation. Willis (1996) maintained the importance of measuring performance because it will indicate status and direction of a project.

It is widely accepted view that, at a minimum, performance measures of a project are based on time cost and quality (Barkley and Saylor, 1994). Atkinson (1999) noted that these three components of project performance as the ‘iron triangle’. However, Kumaraswamy and Thorpe (1999) considered variety criteria in measuring a project. This includes meeting budget, schedule, the quality of workmanship, stakeholder's satisfaction, transfer of technology, and health and safety. Similarly, Chan and Tam (2000) noted that various other key components also used in measuring project performance such as health and safety, environmental performance, user expectation/satisfaction, actor's satisfaction and commercial value. Therefore, variables have been identified for measuring project performance. They are cost, time, quality, clients’ satisfaction, health and safety and functionality.

Cost performance

Cost is defined as the degree to which the general conditions promote the completion of a project within the estimated budget (Bubshait and Almohawis, 1994. Salter and Torbett (2003) indicated that cost variance was the most common technique used to measure design performance. It is not only confined to the tender sum, but the overall cost that a project incurs from inception to completion, which includes any costs arise from variations, modification during construction period and the cost arising from the legal claims, such as litigation and arbitration. It can be measured in terms of unit cost, percentage of net variation over final cost (Chan and Tam, 2000. Cost variance is a very important factor in measuring project performance because it indicates how much the project is over or under budget. Andi and Minato (2003) used cost variance to measure project performance caused by defective design in Japan's construction industry. Similarly, Georgy et al (2005) suggested the element of cost to measure the performance of engineering projects. Hence, in this article, cost variance is calculated by the variance between the actual cost and the budgeted cost of a project.

Time performance

It is very important for construction projects to be completed on time, as the clients, users, stakeholders and the general public usually looks at project success from the macro view where their first criterion for project success appeared to be the completion time (Lim and Mohamed, 2000. Salter and Torbett (2003) and Odeh and Battaineh (2002) mentioned that time variance is one of the techniques for assessing project performance in construction projects. The element of time could indicate to project managers that the project was not running as smoothly as scheduled. Furthermore, Latham Report in 1994 suggested that ensuring timely delivery of projects is one of the important needs of clients of the construction industry. Construction time can be regarded as the elapsed period from the commencement of site works to the completion and handover of a building to the client. The construction time of a building is usually specified before the commencement of construction. Construction time can also be deduced from the client's brief or derived by the construction planner from available project information.

Quality performance

In the construction industry, quality is defined as the totality of features required by a product or services to satisfy a given need, or fitness for purpose (Parfitt and Sanvido, 1993). In other words, the emphasis of quality in construction industry is on the ability to conform to established requirements. Requirements are the established characteristics of a product, process or service as specified in the contractual agreement and a characteristic is any specification or property that defines the nature of those products, processes or services, which are determined initially by the client. In order to achieve a completed project that meets the owner's quality expectations, all parties to a project must acquire an understanding of those expectations, incorporate them into the contract price and other contract documents to the extent possible, and commit in good faith to carry them out (Ganaway, 2006).

Clients’ satisfaction

Satisfaction is regarded as a function of comparison between an individual's perception of an outcome and its expectation for that outcome (Locke, 1970). In the construction industry, client's satisfaction has remained an elusive and challenging issue for some considerable time. Dissatisfaction is widely experienced by clients of the construction sector and may be caused by many aspects but is largely attributable to overrunning project costs, delayed completion, inferior quality and incompetent service providers including contractors and consultants (Contract Journal, 2004). Research findings by BSRIA (2003) have suggested that it is five times more expensive to develop a new construction client than to maintain an existing one and companies could increase their profits by almost 100 per cent by retaining just 5 per cent more of their clients. Client's satisfaction is therefore a fundamental issue for construction participants who must constantly seek to improve their performance if they are to survive in the global marketplace. In the construction industry, the measurement of client's satisfaction is often associated with performance and quality assessment in the context of products or services received by the client (Parasuraman et al, 1988; Soetanto and Proverbs, 2003). Usually the client's requirements are to get construction needs translated into a design that specifies characteristics, performance criteria and conformance to specifications, besides to get the facilities built within cost and time (Ahmed and Kangari, 1995.

Health and safety

Health and safety are defined as the degrees to which the general conditions promote the completion of a project without major accidents or injuries (Bubshait and Almohawis, 1994. The measurement of safety is mainly focused on the construction period as most accidents occur during this stage. Throughout the world, construction industry is known as one of the most hazardous activities. Thousands of people are killed and disabling injury annually in industrial accident. Construction workers worldwide have three times more chances of dying and two times of getting injured than any worker of other economic activity (Sousa and Teixeira, 2004). In Malaysia, Social Security Organization (SOCSO) reported out of the total of 73 858 industrial accidents recorded in 2003, 4654 were occurred in construction industries with 2 per cent or 95 cases resulting in deaths. There is no single reliable measure of health and safety performance. Traditionally, the safety performance is measured through injury statistic. The main purpose of measuring health and safety performance is to provide information on the progress and current status of the strategies, processes and activities employed to control health and safety risks. Effective measurement not only provides information on what the levels are but also why they are at this level, so that corrective action can be taken.

Functionality

Chan (2001considered ‘functionality’ as one success measure that is made in the post construction phase when the project is finished and delivered to service. Kometa et al (1995) opined that there would be no point in undertaking a project if it does not fulfil its intended function at the end. This indicator correlates with expectations of project participant and can best be measured by the degree of conformance to all technical performance specifications (Chan et al, 2002). Both financial and technical aspects implemented to technical specifications should be considered, achieving the fitness for purpose objective. Songer and Molenaar (1996) defined specification as workmanship guidelines provided to contractors by clients or clients’ representatives at the commencement of project execution. The measure of technical specification is to the extent that the technical requirements specified can be achieved. In addition to that, Songer and Molenaar (1997) consider meeting specifications as one success criterion for design-and-build projects that is consistent with the measurement of technical performance, which is to be measured in both the preconstruction and construction phases when the technical requirements are laid down.