Performance indicators analysis for contractors in Malaysian housing construction projects

Abstract

Housing construction project is one of the main segments in Malaysia’s construction industry with contractors as the major stakeholders during its construction phase. However, contractors’ performance as monitored by the clients is found declining due to lack of reliable standardised systems that detail the project monitoring concepts to guide its development. To improve the performance of the contractors in Malaysia, there is a need for the performance indicators analysis for the housing construction project. Thus, this study developed a framework of performance indicators for contractors in Malaysian housing construction projects by identifying the current contractor’s performance, investigating the critical success factors (CSFs) for housing construction projects, assessing the Key Performance Indicators (KPIs) of contractors, and examining the relationship between project time, quality and cost in housing construction project. This study began with a literature review, followed by questionnaire development which was tested via a pilot test involving 10 experts. Subsequently, data collection via a survey on 250 construction stakeholders was undertaken. The data was analysed using Statistical Package of Social Science (SPSS) version 2015. The results showed that the current contractor’s performance in the housing construction project is poor, where contractor does not try to reduce wastage of materials used, contractor does not well maintain the client’s expectations, and contractor does not work effectively with the client to ensure costs are maintained at the acceptable level. Meanwhile, the most important CSFs are contractor has clear communication lines, followed by the contractor maintains a professional relationship with client, and construction costs must remain within the stipulated budget. Furthermore, the most important KPIs are contractor’s compliance on site security regulation, followed by contractor’s formulation on a clear working programme for construction of statutory compliance according to the legal regulations, and the client satisfaction with the progress of the project and deliverables by the contractor. The results also showed that the project time, quality, and cost of housing construction projects determine the income and profit of the project as the project time defines the quality and investment ratio of the housing construction projects. The proposed framework was validated via criterion related validity test. The framework of performance indicators analysis for contractors of the housing construction project in Malaysia consists of three variables: current contractor’s performance in housing construction project with six indicators, CSFs for housing construction project with ten indicators, and KPIs of contractor in the housing construction project with eight indicators. This framework is useful to help the client to appraise and improve the contractor’s performance towards the betterment of future housing construction projects in Malaysia.