Subcontractor Performance Evaluation with Respect to HRM Considerations

By:

Hamidreza Abbasianjahromi

Introduction

• Projects are becoming bigger and bigger, while construction tasks have become more complicated and diversified. (Kang. 2011)

• GCs need some partners for doing project tasks specialty and assign this role to some groups named subcontractors.

• SCs can contribute to the construction process for as much as 90% of the total project value. (Kummaraswamy & Matheiw, 2000)

Introduction

• GCs encounter to some issues such as evaluation, selection and monitoring in subcontracting project tasks to SCs.

• GCs have diversified approached in the evaluation and selection of SCs because some considerations are important for hiring SCs such as lack of enough resources, lack of knowledge in doing some special tasks, big volume of project tasks and high overhead in various conditions.

Introduction

• Monitoring and performance evaluation is very similar based on its concept. The main focus on monitoring step is to investigate whether SCs performance is in the direction of satisfying project goals or not.

• In the other point of view, SCs can influence on various aspects of projects such as cost, time, quality, resources, etc.

• SCs bring some sources such as human resource, equipments and materials in projects. Because of their resources involvement in the projects, GCs should manage and monitor them effectively.

Introduction • The lack of documented information in most contractor

companies and inherent uncertainty existed in the performance evaluation causes the authors to offer a model based on fuzzy set theory.

• For minimizing unintentional mistakes in the decision-making process, conducting an opinion poll from various experts is another approaches presented by this paper.

• With regard to these reasons, authors intend to combine three concepts including the fuzzy set theory, complex numbers and group decision making in SCs performance evaluation.

Literature Survey

• There are only few investigation conducted for SCs performance evaluations.(Ng, 2007)

• The previous investigations regarding SC performance evaluation divided into two broad categories:

1. Papers: Previous papers considered to suggestion of model and offering criteria (Mathew et al., 1997; Hsieh, 1998; Buck, 2003; Chung & Ng, 2006; Ng,2007;Ng et al., 2009…)

2. Standards/guidelines: These sources propose a framework for evaluating SCs based on environmental conditions. (Carolina State of government, 2001; State of Wisconsin, 1998; PCICB, 2002; ETWB, 2002; FNAL,2002;LANL, 2005)

Literature Survey

No. Criteria Reference

1 Schedule/Progress Mathew et al., 1997; State of Wisconsin,1998; Hsieh, 1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002; ETWB,2002; Chung & Ng, 2006; Ng,2007; Yueng et al., 2008; Yueng et al., 2009; Ng et al., 2009

2 Quality Mathew et al., 1997; State of Wisconsin,1998; Hsieh, 1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002;Chung & Ng, 2006; Ng,2007; Yueng et al., 2008; Yueng et al., 2009; Ng et al., 2009

3 Cost Mathew et al., 1997; State of Wisconsin,1998; Hsieh, 1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002; Chung & Ng, 2006; Ng,2007; Yueng et al., 2008; Yueng et al., 2009; Ng et al., 2009

4 Safety State of Wisconsin,1998; Hsieh, 1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002; ETWB,2002; Chung & Ng, 2006; Ng,2007; Yueng et al., 2008; Yueng et al., 2009Ng et al., 2009

5 Workmanship State of Wisconsin,1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002; ETWB,2002; Chung & Ng, 2006; Ng,2007;Ng et al., 2009

•There are several criteria for performance evaluation but the most important of them are as below:

Literature Survey

No. Criteria Reference

6 Organization State of Wisconsin,1998; Hsieh, 1998; South Carolina State Government, 2001; LANL, 2005; FNAL, 2002; ETWB,2002; Chung & Ng, 2006; Ng,2007;Ng et al., 2009

7 Resources ETWB,2002; Buck, 2003; Chung & Ng, 2006; Ng,2007;Ng et al., 2009

8 Environmental Pollution Control

LANL, 2005; FNAL, 2002

9 Client’s Satisfaction

Construction Industry Institute CII, 1991; Yueng et al., 2008; Yueng et al., 2009

10 Communication Mathew et al., 1997; State of Wisconsin,1998; South Carolina State Government, 2001; LANL, 2005; Chung & Ng, 2006; Ng,2007; Yueng et al., 2008; Yueng et al., 2009; Ng et al., 2009

Proposed Methodology

Criteria Identification

Alternative Identification

Model Development

SCs Performance Index

Criteria Identification• According to subject of paper and literature review

section, below criteria are presented:

1. Innovation and Improvement

2. Effective Communication

3. Workforce Productivity

4. Employee’s Attitude

5. Safety

6. Payment to personnel

7. Disputes

8. Harmonious working relationships

9. Quality of leadership

10. Trust & Respect

Alternative Identification

• Candidate SCs should be recognized for participating in the performance evaluation program.

• SCs will be evaluated with respect to the each criterion.

Model Development

Determination of satisfaction level if each criteria by GC

Evaluation of SCs based on proposed

criteria

Determination of SI index as:

SI=(SCs evaluation-satisfaction level)

Comparison of SI index for each SC in

various periods

Linguistic Terms

Linguistic Terms

Fuzzy Set + Complex Number

Weighting Criteria

AHP

Model Development

• Satisfaction level

– This parameter is qualitative, so we use linguistic terms and fuzzy set theory for calculation.

– Fuzzy set theory would not only match the condition with inadequate information but can also facilitate the process of working with linguistic terms. (Abbasianjahromi & Rajaie, 2011)

Linguistic Terms Fuzzy Numbers Figure

Very low (VL) Low (L)

Medium low (ML) Medium (M) Medium high (MH) High (H) Very high (VH)

(0,0,0.1,0.2)

(0.1,0.2,.02,0.3)

(0.2,0.3,0.4,0.5)

(0.4,0.5,0.5,0.6)

(0.5,0.6,0.7,0.8)

(0.7,0.8,0.8,0.9)

(0.8,0.9,1,1)

Model Development

• SCs evaluation

– Evaluation of SCs based on the proposed criteria and their performance in duration of projects.

– The process applied for the evaluation of SCs is similar to determination of satisfaction level.

Model Development

• Weighting criteria

– Each criterion has a different value for decision makers. Decision makers usually weight criteria regarding their priorities in performance evaluation.

– There are various tools for weighting criteria. AHP is one of the most popular tools in this area.

– The concept of AHP is based on pair-wise comparisons.

– This paper applies AHP for weighting criteria.

Model Development

• Determination of SI indexSI=(SCs evaluation-satisfaction level)1 1 2 2

1 2

... ...

... ...i i ij j im m

ij m

x w x w x w x wSCE

w w w w

1 1 2 2

1 2

... ...

... ...j j m m

j m

r w r w r w r wSL

w w w w

• In above equations, and are evaluation of ith SCs and satisfaction level respectively. is the rate of ith SC with respect to jth criteria, are satisfaction level and weight of each criterion.

iSCE SLijx

mr jw

Model Development

1 1

2 21

3 31

4 4

min { }

1

1

max { }

f K k

K

f kk

K

f kk

f K k

a a

a aK

a aK

a a

1 2 3 4( , , , )k k k ka a a a

• Group Decision making

Model Development

• Complex Numbers

~3 4 1 2

1 2 3 43 4 1 2

~3 2

3 4 1 2

1( ) [ ]

3

1( ) [ 1 ]

3

a a a ax A a a a a

a a a a

a ay A

a a a a

1 ( , )z 2 ( , )z

1

1 2

1 2

1 2 2 2 2 2

( , )

( , )

( , )

( , )

z

z z

z z

z z

Criteria Identification

SCs Performance evaluationLiterature Review

Questionnaire

Weighting Criteria Expert Judgment

AHP,SAW,…

Determination of Satisfaction levelDecision Makers

Rating of SCsLinguistic

Terms

SI Determination

Fuzzy Set+

Complex Number

Conclusion

• Performance evaluation of SCs in the construction industry is a crucial task in the implementation of effective management.

• This papers presented some criteria for performance evaluation of SCs in the construction industry with respect to the HRM considerations.

• The innovation of this paper is to present an applicable framework for performance evaluation of SCs.

Thank You For Your Attention