Abstract
Performance evaluation is a vital tool for assessing management performance and fonnulating corporate strategies. The Nigerian construction industry is reported to be very vibrant and one of the largest in Africa. It is made up of 78% indigenous firms and 22% foreign firms. The indigenous firms are predominately small and medium - sized. However, the Nigerian construction industry have been challenged to improve its perfonnance because of reports of perfonnance problems in terms of cost over runs, time over runs, poor quality of work, low productivity among other problems. The aim of the study was to establish the measures used by construction SMEs for evaluating performance. The study employed a case study research design. Five construction SMEs in Lagos, Nigeria were selected as case studies. The findings revealed that construction SMEs do not use any of the established performance measurement frameworks for evaluating performance. The main performance measures used by construction SMEs are cost, time, quality, customer satisfaction, profitability of the project, labour productivity, safety and team work. It was also established from the study that construction SMEs do not use supply chain management and employee satisfaction. It was suggested that construction SMEs shou ld also use supply chain management and employee satisfaction because these measures have been found to impact positively on firms ' performance
Highlights
The need to improve performance in construction industries worldwide has become topical
The findings revealed that construction SMEs do not use any of the established performance measurement frameworks for evaluating performance
Other frameworks include the self-auditing performance measurement system which examines the use of information technology based management tools (Bitici and Turner, 2000), Construction firms’ performance evaluation model using the financial, economic and industrial characteristics of companies (Elyamany et al, 2007), the six sigma concept to construction (Pheng and Hui, 2004), resource based and institutional perspectives for identifying the industry and company specific factors that affect construction companies’ performance (Phua, 2006)
Summary
The need to improve performance in construction industries worldwide has become topical. Evidences of poor performance in terms of cost over runs, time over runs, poor quality of work, low productivity among other problems are replete in the Nigerian construction industry literature (Tunji-Olayeni et al., 2012; Oke and Abiola – Falemu, 2009; Idoro and Akande- Subar, 2008; Omoregie and Radford, 2006; Aibinu and Jagboro, (2002). The big question is, what is it that should be measured (evaluated) in a construction project that would bring about success in performance improvement?. Financial data are reported in a lagging manner that inhibits a company from using it in steering a company effectively and by solely tracking financial data costs is kept down, such as that of overheads, which if not balanced, can seriously affect quality (van Schalkwyk, 1998) This dissatisfaction with financial performance measures led to the introduction of contemporary performance measures like the balance score card, performance prism, performance pyramid and quality models. This paper aims to answer the question: How does construction SMEs evaluate project performance?
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