KSCE Journal of Civil Engineering (2011) 15(8):1319-1328 Construction Management

DOI 10.1007/s12205-011-1323-5
www.springer.com/12205

Quantitative Approach for Project Performance Measurement on

Building Construction in South Korea
Hee Sung Cha* and Chan Kyu Kim*
Received September 13, 2010/Revised October 10, 2010/Accepted February 22, 2011

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Abstract

In general, the performance of a particular construction project can be evaluated by how many of the project goals are achieved in
terms of cost, time, quality, safety, environment, and so forth. However, in the construction industry, which is characterized as project
specific, a clear delineation of scope of performance is absent, and the standard procedure and operations are not fully developed.
Thus, it is very difficult to assess an overall performance level of a constructed project in a reasonable manner. The objective of this
research is to define a quantitative performance measurement system and establish the evaluation criteria by identifying 18 key
performance indicators, focusing on residential building projects. Based on the performance assessment methodology, 22 project
cases have been collected for comparative analysis and have been evaluated to determine whether the system is applicable to the
potential projects. The set of identified performance indicators is also useful in developing a customized performance measurement
system for a particular type of project. The research findings are expected to encourage the project stakeholders to develop a
performance-based project control system, thereby enhancing their level of satisfaction.
Keywords: building construction, metrics, key performance indicator, quantitative analysis
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1. Introduction
1.1 Research Background
Currently, the rapid changes taking place within the construc-
tion environment require construction companies to make quick
adaptations, along with multifarious efforts to establish the new
industry environment. The recent changes are attributed to the
full-scale opening of the construction market, scaling-up, sophis-
tication and specialization of the industry, advancement of the
construction methods, diversification of client demands, and adop-
tion of new systems. Conventionally, in response to the changes,
the construction managers have endeavored to reduce the cost
and time, while ensuring the quality of the work. Also, under the
varying circumstances and conditions of the project-based con-
struction industry, management policies that can successfully
accomplish a project are continuously in demand to increase the
overall competitiveness and efficiency of the industry.
Construction project management can be interpreted as a set of
activities carried out to complete an object requested by an
owner, utilizing the available resource in an optimal manner. To
determine the optimal utilization of a resource, it is necessary to
analyze project performance from various aspects. This is because
the criteria for performance assessment may vary due to different
project value objectives. Generally, assessment indicators for a
project include cost, time, quality, environment, safety, etc. Fur-
thermore, the new trend is to emphasize a more comprehensive
approach including productivity, risk containment, and security
(Cha and O’Connor, 2006).
In a construction project, it is critical to define what good per-
formance means to realize strategic goals and to acquire suc-
cessful outcomes. Nonetheless, performance-based project as-
sessment on a comprehensive level, and the subsequent revision
of the project plans, has not been well established.
As the research on this subject of performance evaluation on
a project level has been relatively modest, it is not easy to
analyze outcomes of the past projects, and provide implications
for future projects. As the importance of performance evalua-
tion is recognized, some research has been conducted to suggest
effective assessment of a construction project (Cox et al., 2003).
However, research on the in-depth measurement and method-
ology regarding the performance of an individual project is still
in a nascent stage. A construction process involves continued
data analysis and a number of decisions need to be made for an
unpredictable future. Many construction managers are indecisive
when confronted with difficult situations regarding the efficient
utilization of materials, human resources, equipment, selection
of the optimal construction methods, and more. Often they are
forced to make a spontaneous decision based on experiences

*Member, Associate Professor, Dept. of Architectural Engineering, Ajou University, Suwon 443-749, Korea (Corresponding Author, E-mail: hscha@ajou.
ac.kr)
**Member, Associate Professor, Dept. of Architectural Engineering, Sunmoon University, Asan 336-708, Korea (E-mail: qkim@sunmoon.ac.kr)

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 Hee Sung Cha and Chan Kyu Kim
and intuition. Establishing a performance assessment model to
evaluate project outcome will contribute to establishing project
objectives and management policies more accurately.
Consequently, the main objective of the research is to develop
a framework for an effective performance measurement system
that reflects the characteristics of the individual project in order
to accumulate a database. To do so, an operation-level perfor-
mance assessment methodology is suggested in the research to
manage each indicator in an integrated manner.. It should be noted
that the main research findings of this research are primarily
dependent on the previous research work (Cha and Kim, 2008).
The purpose of this paper, however, is to provide a newly develop-
ed performance measurement system for building construction
projects in South Korea.
1.2 Research Methodology and Scope
The research flow of this study is shown in Fig. 1. Firstly, the
background and objectives of this study are established; perfor-
mance indicators are then drawn based on both domestic and
international literature reviews and an interview is conducted
with experts who are in charge of performance management in
the construction companies. Overlapped items are eliminated,
and the level of importance for each item is analyzed. The can-
didate list contains 8 performance categories and 27 individual
indicators. The details regarding performance indicators are
further addressed in the following sections. A survey with the
experts was conducted to verify the validity of the performance
measurement structure, while examining whether the detailed
indicators can represent the performance of the category, and
whether they can be measured on the site. The performance indi-
cator structure is finalized with the survey results, and this
Fig. 1. Research Flow Chart
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research suggests an efficient performance measurement strategy
based on extensive data collection from the building project pra-
ctitioners. A more specific research methodology is provided in
three areas as follows: preparing a list of performance indicators,
establishing a quantification system for performance assessment,
and setting up an operating scheme for performance management.
1.2.1 Preparing a List of Performance Indicators
To establish a list of performance indicators, the building project
performance is defined to reflect the goals of a project and
potential indicators are collected through a literature review, case
studies, and practical quantitative assessment examples. Based
on these, a set of preliminary key performance indicators is pre-
pared, which is reviewed and revised by experts with experience
in the construction project. During this endeavor, the authors
have referred to the most renowned performance measurement
systems, such as Construction Industry Institute (CII) bench-
marking and metrics data, and Construction Excellence (CE)
Key Performance Indicators (KPIs), which are widely used in
the construction industry (CE, 2006; CII, 2001; Costa et al.,
2003; Cox et al., 2003).
1.2.2 Establishing Performance Measurement Algorithm
In order to effectively quantify the identified indicators, the
authors developed individual mathematical formulas. Their val-
idity is examined through a survey with a group of construction
experts from two perspectives: the overall representativeness of
project performance and the measurability of the subject indi-
cator. Based on the survey, the project performance measurement
methodology is finalized.
1.2.3 Developing Performance Management Strategy
Data from the real construction projects are collected by
utilizing the project performance measurement structure. Data is
collected from the site project managers, and the importance and
weight of the indicators are analyzed. Also, a scheme to establish
a database for construction project performance based on the de-
veloped indicators is reviewed. Developing a performance mana-
gement system that is easily accessible to the system adminis-
trator is encouraged. It will not only enable the comprehension of
the current condition and status of the construction industry, but
also to compare the performance of individual projects to
establish a system that can be continuously updated.
2. Overview of Project Performance Measure-
ment System
A performance measurement system in the construction in-
dustry can be roughly divided into a macro and a micro level. On
a macro level, that is, at the industry level, the performance indi-
cates the accomplishment of a company and/or an organization,
and it needs to be measured so that the current strategies can be
examined and analyzed. This type of performance measurement
helps to suggest a direction for future business strategies. Mean-
KSCE Journal of Civil Engineering