CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Construction is the world’s largest and most challenging industry. The industry is highly a dynamic sector and plays a very important role in the development of a country. However, construction industry, faces chronic problems such as poor productivity, poor performance of time and cost etc, as reported only 37.2% of projects were completed within their predetermined cost. This was as a result of lack of investigation on construction labour productivity and cost performance.
Butler (1986) in Anthil and Wood-Head (1990) defined productivity as ‘the rate between output and input’ and industrial productivity as ‘the arithmetical ratio between the work product and he total resources used.  Borcherding and Liou (1986) defined productivity as ‘the relationship between input and outputs’. Based on this view, Construction productivity can be dealt with as the measure of value of construction works in relation to the total cost of labour, plant and materials actually used in the execution of the work.
Labour is one of the basic requirements of the construction industry and is usually related to manpower. In other words, labour productivity was defined by Drewin (1982) as the ‘amount of goods and services provided by a productive factor (manpower) in the unit of time’.Gido and Clement (2003) mentioned that cost performance is an effective technique in project management effort expended and it is used to measure the efficiency of total cost to budgeted cost. It is found that it is important to study more details on cost performance of building and it is agreed by Ashworth (1994) that ‘cost studies of building consist of the application of techniques and expertise of economies to construction projects’. Also, it is to ensure available resources are used efficiently to increase the level of productivity in construction work.
In the construction industry, site workers, account for approximately 40% of the cost of project thus a relationship is established between labour productivity and cost performance. In Nigeria’s construction industry for instance, companies are currently applying various non-financial incentives schemes aimed at operative productivity, this has significantly improved cost efficiency. If the concept of productivity of labour is properly understood, appreciated and facilitated, there will be an improvement of cost performance of projects. This will in effect, enhance workers out-put and further contribute to cost performance. It is in the light of this, that this research study on the Influence of labour productivity on the cost performance has been embarked upon.
1.2       Statement of the Problem
Many factors are responsible for the influence of labour productivity on cost performance in project. These factors when not put in place could bring about reduction in level of productivity and consequently affect cost performance of projects.  There has been lack of investigation into labour productivity and cost performance which is probably due to the low level of awareness of the merits of such investigations. This problem has overtime denied construction works of its ideal cost and if un-attended to, it might in the nearest future overshadow the important potentials of improved labour productivity.
Another problem that has been identified is that of inconsistency in the level of labour productivity. This has subsequently affected cost of the project. It is therefore imminent for this problem to be assessed and solved so as to institutionalize a consistent standard for construction projects.
Low level of motivation and incentives such as welfare packages, awards to best worker, award to longest serving staff all, serve as a dependable instrument for improving labour productivity. But this has not been found in construction industry. Finally, this study was embarked upon to ascertain how improved productivity would influence cost performance. This study seeks to provide solutions to the above identified problems.