Measuring Project Success in The Construction Industry
Measuring Project Success in The Construction Industry
T
Abstract: The measurement of project success in the he ability to identify key attributes of project success is
construction industry has traditionally been grounded important to project owners, engineers, and contractors.
in the industry-accepted classic objective success metrics: Understanding the attributes of success contributes to
cost, schedule, performance, and safety. Initial research has the efficient execution of the construction project (Chua, Loh,
indicated that there are more subjective considerations that, Kog, and Jaselskis, 1997). The challenge in determining project
while being difficult to quantify, can have an important impact success is the lack of a standardized approach (Dvir, Raz, and
on perceptions of project success. During ongoing project Shenhar, 2003).
management research, the authors recognized the need for a Traditionally, the industry-accepted classical success metrics
measurement tool that would account for subjective as well for construction projects have been cost, schedule, and quality/
as objective metrics in assessing project success. The tool performance (Kerzner, 2003). The construction industry, led
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would have to provide the flexibility necessary to account by the Construction Industry Institute (CII) of Austin, TX,
for the fact that every project is different. The resulting has also institutionalized use of a metric relating to the safety
Construction Project Success Survey (CPSS) instrument performance of the project (Construction Industry Institute,
is designed to investigate how experienced construction 1997). Industry professionals have recognized that, on some
project management personnel perceive project success, both projects, safety performance can be the primary determinant
objectively and subjectively. The engineering manager can use of success, regardless of the outcome of the other classical
this tool to identify important success metrics before the start metrics. This is especially true of the public sector (government)
of a project, and to evaluate the level of success achieved at construction market.
project completion. While cost, schedule, performance, and safety data provide
objective metrics that are fairly easily quantifiable, there are other
aspects of a project, including the level of “quality” achieved,
Keywords: Construction, Project Success, Metrics that may be more subjective. Additionally, when subjectivity is
involved, the “eye of the beholder” becomes a major factor in
evaluating how well a project performed and how successful it
EMJ Focus Areas: Program & Project Management was perceived.
The objective of this research is to incorporate existing
construction project success measurements into a technique that
Refereed management tool manuscript. Finalist in the Merritt Williamson Best Conference Paper award at ASEM 2003.
they note it is more appropriate to speak in terms of “perceived by assessing their perceptions of how these factors were managed
success of a project.” against expectations and factors beyond the control of the project
This article suggests that objective project metrics cannot team (e.g., labor supply, material availability, regulatory climate).
provide the whole story regarding project success without It should be noted that cost and schedule variances, OSHA
elucidating the context in which the project success attributes safety statistics, and quality inspection results can be grossly
were observed. In fact a completely erroneous conclusion misinterpreted without context. For example:
regarding project success could be arrived at by project analysts • Management may elect to bid jobs at a financial loss to enter
if they only considered the classical project success metrics (cost, a new market or win a prized client. Outcomes with negative
schedule, quality/performance, and more recently, safety) while cost variances might be viewed as a success in this context.
neglecting subjective success metrics. It is probably also true that • Below standard, but well-managed, safety performance,
subjective metrics are only meaningful when considered from the as measured by OSHA Total Recordable Injury Rates or
point of view of a particular observer. In other words, what would workers compensation costs, might be viewed as acceptable
be construed as successful to the construction project manager or commendable by management if the project required
may or may not resonate the same way with the construction the excessive use of travelers (craftsmen not out of the local
project owner, project engineer, operator, or maintenance staff; union hall) or apprentices to staff the project.
therefore, one must clearly specify the point of view when • A project bid and performed to an unaggressive customer
measuring subjective success attributes. schedule baseline (common in public sector work with
One typical example of this dichotomy is the case where all incremental funding) may produce a significant positive
objective cost, schedule, performance, and safety metrics indicate schedule variance that still doesn’t meet management’s
a successful construction project outcome, but in the final expectations.
analysis, the project did not meet the expectations of the owner
and/or the construction project manager and was therefore Ammeter and Dukerich (2001), investigated factors leading
judged to be unsuccessful. to high performance project teams. Though not the focus of
their research, they compared “perceptions” of high performance
Establishing the Need for the Construction Project factors with more objective metrics (i.e., project cost and schedule
Success Survey data) and found high correlation between the objective cost and
Benchmarking and metrics defining construction project schedule metrics and those characterized by “perceptions.” The
success have been established through research conducted by CII pursuit of “perception” measurement in this research is modeled
(Construction Industry Institute, 1997). This work has produced after the process used by Ammeter and Dukerich (2001).
standardized cost, schedule, and safety metrics indicative of
successful projects. During ongoing research, the authors Construction Project Success Survey Development
recognized the need for a measurement tool that would account Interviews were conducted with a group of 10 experienced
for subjective feedback (such as achieving “quality” objectives), construction project managers to collect qualitative or “anecdotal”
and perceptions, as well as objective metrics in assessing project perceptions of factors that define construction project success
success. The tool would have to provide flexibility necessary in terms of internal baselines or management’s expectations.
to account for the fact that every project is different. Effective Project managers were selected due to their critical impact on the
measurement of success would provide a means to adapt criteria administration of a construction project, their control over the
to the important success characteristics for a given project. In allocation of key project resources, by the fact that they are normally
order to fill the gap that exists with current research tools, the considered to be the single point of responsibility for all matters
Construction Project Success Survey (CPSS) tool was developed. related to the project, and by the fact that they are the individuals
ratings of performance for their respective projects did not reflect Likert scale (+1.82 for Performance and Quality and +2.75 for
what would typically be expected based strictly on the objective Safety). The final CPSS score was heavily influenced by exemplary
metrics of cost and schedule. As can be seen in Exhibit 2, a cost safety performance (no OSHA recordable injuries over three
or schedule variance greater than 1.0 that would normally be months) and the strong endorsement of quality workmanship
indicative of a poor performing project does not necessarily received from the client at the final project turnover.
adversely impact the CPSS scoring. Follow-up interviews with The follow-up interview revealed that the project bidding
the project managers were conducted in order to evaluate these was extremely competitive with no expectation of profit. This
scoring discrepancies. Several important considerations were was reflected in the relatively lower importance and performance
revealed in the interviews and are detailed. ratings for cost attributes. The project manager was extremely
critical of his ability to control cost and schedule performance
Exhibit 2. CPSS Validation Results
early in the project. The cost baseline for the project was set at
no profit and the survey scored a “neutral” response against the
Project Cost Schedule CPSS Score
objective cost attributes.
Variance Variance
The project manager declared that market penetration
and the opportunity to demonstrate performance capabilities
A (Successful) 0.831 1.636 1.905
and safe work practices in a new, highly regulated environment
B (Mediocre) 1.051 0.954 1.640 were important. Within the “Operating Environment” category,
the attribute related to improving market position achieved the
C (Poor) 1.492 1.000 0.246
highest possible scores and importance factors. He also indicated
he was slow to adjust to the expectations of regulatory oversight
which initially created a credibility gap with the client. This
Project A. This project manager indicated that cost (40%), situation improved steadily throughout the project, and the
performance, and quality (another 40%) outweighed all other survey revealed a final rating of +2 along with the highest possible
considerations in determining the level of project success. The importance weighting.
average survey cost score of +2.18 is a clear indicator of strong The industry-standard cost and schedule variances would
performance in this area, with baseline management and suggest this project merely meets baseline expectations; however,
contingency management statement scoring the highest. This the higher CPSS score more accurately reflected the factors of
result is supported by the objective cost variance of 0.83 (17% special importance and the accomplishments reported by the
better than plan). The average performance and quality scores project manager on the subjective quality, customer satisfaction,
of 2.10 also contributed significantly to the overall high CPSS safety, regulatory compliance, and market penetration attributes
score. Success in meeting project operational goals was the largest he highlighted in the follow-up interview.
“performance” score contributor.
Though a schedule baseline was maintained (and ultimately Project C. This project manager rated “operating environment”
over-run), this had little or no bearing on the project’s terminal as the most critical category (25% of overall weighting) in
objective (as evidenced by a 10% weighting factor). “Schedule” determining project success. The work environment included
produced the survey’s only negative average score (-0.182). In the rigorous access controls due to radiological contamination. The
post-survey interview, the project manager indicated that high contamination also governed the level of work controls and
safety standards are the norm in this nuclear work environment. regulatory oversight. Successfully coping with these challenges (an
Safety performance on the survey was rated strong (average score average score of +1.54), and strong safety performance (a score of
of +2.82), but the safety category importance was weighted at +1.55) contributed to an overall positive CPSS score. Cost was
revealed by the project managers through the interview process can use the instrument as a means of scoring project success
regarding their final assessment of success. Furthermore, the for the purpose of measuring improvement and deficiency
scores produced a more accurate representation of project trends. Similarly, lessons learned programs can incorporate
success outcomes for the three projects relative to one another the CPSS as a source of project success feedback beyond the
than did the objective metrics. framework of objective metrics alone. In this case, the relative
One traditionally acceptable method of determining reliability importance scores of various project activities can contribute
of survey instruments is through the test-retest coefficient, often to the knowledge base of the project organizations, which can
called the coefficient of stability (Rogelberg, 2002). The coefficient help to balance priorities and the application of resources in
of stability measures the correlation of the same measure for the future projects.
same case at two or more points in time (Price and Mueller, 1986).
The test-retest reliability method was utilized to determine the Conclusion
coefficient of stability for the three projects used for validation. The Construction Project Success Survey, included in
The results are shown in Exhibit 3. The time interval between T1 Appendix 1, clearly demonstrates the value of a project success
and T2 was approximately five months. assessment instrument that focuses on attributes outside the
classical objective metrics of cost, schedule, performance, and
Exhibit 3. CPSS Test-Retest Results
safety. The CPSS provides a method of measuring subjective
project success attributes that can ultimately lead to a successful
Project CPSS Score CPSS Score outcome of a project regardless of the values associated with the
Time = T1 Time = T2
traditional objective success attributes. Without the benefit of the
CPSS, a construction project’s status could be misconstrued by
A 1.905 1.691
only analyzing and accepting the status imparted by the classical
B 1.640 1.636 objective success metrics.
Additionally, the CPSS provides context to subjective success
C 0.246 0.264 attributes by acknowledging the importance of specifying which
individual is being asked to render the project success assessment.
In the case of the CPSS, the perspective chosen is that of the
The Pearson’s product moment correlation coefficient of project manager of the construction project. The development
r=.993 is indicative of relatively high positive correlation between of the CPSS exclusively utilized input from professional project
the two data sets and demonstrates survey instrument stability managers in the construction industry. The result is a tool
over time. that accurately reflects the project manager’s knowledge base
and covers the range of applicable success metrics related to
Application construction projects that are not confined to the classical
In addition to assessing project outcomes following project objective success metrics (cost, schedule, performance,
completion, the CPSS can be used by the project team early and safety).
in the project planning phase to help identify those attributes
important to achieving success. One approach would involve References
scoring attribute “importance” factors and the overall category Ammeter, Anthony P., and Janet M. Dukerich, “Assessing the
weighting as a means of communicating project priorities. The Impact of Leadership, Team Building and Team Member
project manager, engineering manager, customer, and other Characteristics in Creating High Performance Project
stakeholders can thus reconcile their views to assure better Teams,” Proceedings of the 2001 National Conference,
Appendix 1
Construction Project Success Survey
Please respond to the following statements by indicating the extent to which you agree or disagree with the statement. Circle the appropriate
number that most closely corresponds to your choice:
-3 – Strongly Disagree
-2 – Disagree
-1 – Somewhat Disagree
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0 – Neutral or Undecided
+1 – Somewhat Agree
+2 – Agree
+3 – Strongly Agree
After choosing your response, please indicate how important you feel this issue is in determining the overall success of the project. Circle the
appropriate response that most closely corresponds to your evaluation:
A – Low Importance
B – Medium Importance
C – High Importance
NA – Not Applicable
Cost
1) Overall project cost performance was met based -3 -2 -1 0 +1 +2 +3 A B C NA
on baseline goals, targets, or expectations.
2) Rework costs were well managed. -3 -2 -1 0 +1 +2 +3 A B C NA
Schedule
6) Overall project schedule performance was met -3 -2 -1 0 +1 +2 +3 A B C NA
based on baseline goals, targets, or expectations.
7) Material availability was well managed. -3 -2 -1 0 +1 +2 +3 A B C NA
8) Equipment availability was well managed. -3 -2 -1 0 +1 +2 +3 A B C NA
9) Labor availability was well managed. -3 -2 -1 0 +1 +2 +3 A B C NA
10) Schedule float management was optimized. -3 -2 -1 0 +1 +2 +3 A B C NA
Quality
11) Overall project quality objectives were met based -3 -2 -1 0 +1 +2 +3 A B C NA
on baseline goals, targets, or expectations.
12) Customer satisfaction was evidenced by direct feedback. -3 -2 -1 0 +1 +2 +3 A B C NA
13) Customer satisfaction was evidenced by the opportunity -3 -2 -1 0 +1 +2 +3 A B C NA
for follow-on work.
14) The customer’s true goals and expectations were -3 -2 -1 0 +1 +2 +3 A B C NA
properly reflected in contract performance incentives.
Performance
15) Project operational performance goals were met. -3 -2 -1 0 +1 +2 +3 A B C NA
16) A formalized method was established for managing -3 -2 -1 0 +1 +2 +3 A B C NA
project performance data (metrics).
17) Project performance data (metrics) updates were -3 -2 -1 0 +1 +2 +3 A B C NA
accurate throughout the life of the project.
Safety
22) Overall project safety performance was met based -3 -2 -1 0 +1 +2 +3 A B C NA
on baseline goals, targets, or expectations involving
OSHA total recordable injury rate.
23) Overall project safety performance was met based -3 -2 -1 0 +1 +2 +3 A B C NA
on baseline goals, targets, or expectations involving
OSHA lost or restricted workday rates.
24) Project safety performance was commensurate with the -3 -2 -1 0 +1 +2 +3 A B C NA
experience levels of the craft workforce.
25) Hazard mitigation measures were well managed by the -3 -2 -1 0 +1 +2 +3 A B C NA
project team.
26) The trades and labor personnel were supportive of project -3 -2 -1 0 +1 +2 +3 A B C NA
safety practices as evidenced by the frequency of
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Operating Environment
27) Vendors and subcontractors complied with project -3 -2 -1 0 +1 +2 +3 A B C NA
schedule requirements.
28) Vendors and subcontractors complied with project -3 -2 -1 0 +1 +2 +3 A B C NA
documentation requirements.
29) The deployment of new technologies improved -3 -2 -1 0 +1 +2 +3 A B C NA
project performance.
30) The management of rework and repair conformed to -3 -2 -1 0 +1 +2 +3 A B C NA
baseline targets/expectations.
31) Regulator involvement (e.g., EPA, NRC, OSHA) was -3 -2 -1 0 +1 +2 +3 A B C NA
effectively managed, minimizing delays, rework, or
harmful publicity.
32) The training and experience gained on this project by the -3 -2 -1 0 +1 +2 +3 A B C NA
project team improves the marketplace qualifications of
the organization.