Productivity and Performance Management – Managerial Practices in the Construction Industry

The purpose of this paper is to clarify the meanings of different terms related to productivity and to analyze the state of productivity in the Finnish construction industry at the macro level. This study reviews literature related to productivity and performance management; its aim is to form an understanding of prevailing habits and shortcomings. Based on a conducted macro level analysis, the research results show that the rate of productivity development in the Finnish construction industry has been moderate at best, leaving it behind the best industries in Finland and some of its international counterparts. A further review of the performance measure in the construction industry indicates that productivity is an inadequate measure for identifying improvement targets and control activities. The use of a more holistic set of measures is recommended in order to ensure more relevant and timely information. Finally, this study shows that a gap exists between the academic framework and practical action; this imposes difficulties in implementing modern measurement systems in organizations. This paper offers implications for managers in the construction sector aiming to refine their practices in order to improve their business performance.