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«Copyright by Michael Philip Pappas The Dissertation Committee for Michael Philip Pappas Certifies that this is the approved version of the following ...»

-- [ Page 1 ] --

Copyright

by

Michael Philip Pappas

The Dissertation Committee for Michael Philip Pappas Certifies that this is the

approved version of the following dissertation:

An Assessment of Implementation Requirements for

The Tier II Construction Workforce Strategy

Committee:

Richard L. Tucker, Co-Supervisor

Carl T. Haas, Co-Supervisor

John D. Borcherding

Howard M. Liljestrand

Michael D. Oden

Robert W. Glover

An Assessment of Implementation Requirements for The Tier II Construction Workforce Strategy by Michael Philip Pappas, B.S., M.S.E.

Dissertation Presented to the Faculty of the Graduate School of The University of Texas at Austin in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy The University of Texas at Austin August, 2004 Dedication This dissertation is dedicated to my wife, Barbara, and to our sons, Jim and John.

Thank you for your constant love, encouragement, and support.

Acknowledgements To my family: Thank you for your sacrifice and encouragement.

To Dr. Richard Tucker: Thank you for the opportunity to earn a doctorate under your leadership. Your support and guidance has been invaluable.

To Dr. Carl Haas: Thank you for your leadership of the workforce research team and for your encouragement throughout this process.

To those who served on my doctoral committee: Dr. John Borcherding, Dr. Bob Glover, Dr. Howard Liljestrand, and Dr. Michael Oden. Thank you for being accessible and for sharing valuable insights from your varied professional experience.

To the eighteen industry participants listed in Appendix A: Thank you for volunteering your time, input and guidance regarding the implementation of the Tier II strategy, which were vital in developing this dissertation.

To my fellow graduate students on the workforce research team: Stefanie Brandenburg, Jorge Castañeda-Maza, David Shields, and Issam Srour. Thank you for your friendship and for the time we spent brainstorming and refining these concepts.

I would like to acknowledge the Center for Construction Industry Studies and the Alfred P. Sloan Foundation for funding this research effort. I am grateful for the generous financial support of the College of Engineering and the donors of the Richard and Shirley Tucker Endowed Scholarship in Construction Engineering and Project

–  –  –

The United States construction industry has endured a skilled labor shortage over the last two decades. The shortage varies in its characteristics and intensity, but it continues to persist. Although the industry has developed numerous programs to improve recruitment, training, and retention, these efforts have not eliminated the problem. It is clear that more must be done.

The Tier II strategy combines a number of workforce development and management principles into a comprehensive approach that is measurable and can be related to construction success. The strategy seeks to develop a strong, highly-skilled core within the journey-level workforce. These “Tier II journey-level craft workers” possess excellent technical skills and have the management skills to support crew-level planning. Effective utilization of these highly-skilled craft workers should result in better project performance, as well as higher income, job satisfaction, and better career opportunities for the individual worker. The Tier II strategy is defined by metrics

–  –  –

Baseline data have been collected from more than 900 individuals and 20 projects.

This dissertation documents the first comprehensive attempt to provide quantitative guidance regarding the implementation of the Tier II strategy. The current status of the industry based on the Tier II metrics is assessed using the baseline data.

Using this current status as a starting point, this dissertation identifies the requirements necessary to achieve an advanced level of Tier II implementation for an example project, which requires the determination of quantitative data where none exist in the academic literature. Expected benefits and costs are developed based on published literature and unpublished data from a number of industry sources.

Industry implementation will evolve in a number of different forms, as companies develop detailed implementation plans that complement their corporate cultures and the specific requirements of their projects and their personnel.

Based on the Tier II metrics, baseline data, published literature, and unpublished industry data gathered through interviews and meetings, the Tier II strategy can be implemented at an advanced level with a minimum expected benefit-cost ratio in the range of 2:1 to 3:1.

–  –  –

List of Tables

List of Figures

Chapter 1: Introduction

1.1 Introduction to the Tier II Strategy

1.2 The Case for Implementation

1.3 Objectives and Hypothesis

1.3.1 Objectives

1.3.2 Hypothesis

1.4 Scope

1.5 Dissertation Organization

Chapter 2: Background

2.1 The Construction Industry

2.2 The Construction Skilled Labor Shortage

2.3 The Two-Tier Construction Workforce Strategy





2.3.1 Previous Studies – Strategic Issues

2.3.2 Conceptual Development

2.3.3 Development of the Tier II Metrics

2.3.4 Baseline Data Collection

2.4 Related Previous Studies

2.4.1 Craft Technical Skills

2.4.2 Craft Management Skills

2.4.3 Information Technology

2.4.4 Craft Utilization

2.4.5 Organization

2.5 Related Industry Efforts

2.5.1 Efforts to Increase Supply

2.5.2 Efforts to Decrease Demand

ix

2.6 Strategic Management of Human Resources

2.6.1 Construction Industry Human Capital

2.6.2 Return on Investment of Human Capital Development..............59

2.7 Roles in Organizational Change

2.7.1 Owners and Local User Councils

2.7.2 Contractors and Contractor Associations

2.7.3 Labor Organizations

2.7.4 Individual Craft Workers

2.8 Summary

Chapter 3: Methodology

3.1 The Current Status of the Industry

3.2 An Advanced Level of Implementation

3.3 A Reference Point for Analysis

3.4 Determine Costs

3.5 Determine Benefits

3.6 Calculate Benefit-Cost Ratio

3.7 Summary

Chapter 4: Context of Tier II Implementation

4.1 The Tier II Baseline

4.2 Example Project Workforce

4.3 Practical Aspects

4.3.1 A New Paradigm

4.3.2 Implementation on Union Projects

4.3.3 Implementation on Maintenance Sites

4.4 Summary

Chapter 5: Level of Effort Required for Implementation

5.1 Project Craft Technical Skills

5.1.1 Requirements from Tier II Metrics

5.1.2 Current Industry Status

5.1.3 Implementation Requirements

x 5.1.4 Likely Barriers

5.2 Project Craft Management Skills

5.2.1 Requirements from Tier II Metrics

5.2.2 Current Industry Status

5.2.3 Implementation Requirements

5.2.4 Likely Barriers

5.3 Information Technology Utilization

5.3.1 Requirements from Tier II Metrics

5.3.2 Current Industry Status

5.3.3 Implementation Requirements

5.3.4 Likely Barriers

5.4 Craft Utilization

5.4.1 Requirements from Tier II Metrics

5.4.2 Current Industry Status

5.4.3 Implementation Requirements

5.4.4 Likely Barriers

5.5 Organization

5.5.1 Requirements from Tier II Metrics

5.5.2 Current Industry Status

5.5.3 Implementation Requirements

5.5.4 Likely Barriers

5.6 Summary

Chapter 6: Expected Benefits

6.1 Identification of Benefits

6.2 Improved Productivity

6.3 Improved Safety

6.4 Decreased Absenteeism

6.5 Decreased Turnover

6.6 Decreased Rework.

6.7 Summary

xi Chapter 7: Evaluation of Benefits and Costs

7.1 Summary of Benefits

7.2 Summary of Costs

7.3 Benefit-Cost Ratio

7.4 Summary

Chapter 8: Conclusions and Recommendations

8.1 Review of Objectives and Conclusions

8.2 Recommendations

8.3 Contributions

Appendix A: Industry Participants

Appendix B: Tier II Individual Metrics

Appendix C: Tier II Project Metrics

Appendix D: Workforce Assessment Package Questionnaires

Glossary

Bibliography

Vita

–  –  –

Table 2.1: Responses to Industry Workforce Surveys

Table 2.2: Major Components of the Tier II Index

Table 2.3: Absenteeism for Different Coal Mining Work Organizations.

.........45 Table 3.1: Comparison of Project Parameters

Table 4.1: Tier II Baseline Project Scores

Table 4.2: Model Plant Workforce

Table 4.3: Breakdown of Direct Labor Hours for Model Plant Key Crafts.

......84 Table 4.4: Tier II Individuals for the Model Plant

Table 5.1: Continuous Training Reported by Foremen and Journey-Level Craft Workers with at least Three Years of Tenure

Table 5.2: Individual and Project Technical Skill Scores

Table 5.3: Planning Skills Training Reported by Foremen and JourneyLevel Craft Workers

Table 5.4: Job Management Training Reported by Foremen and JourneyLevel Craft Workers

Table 5.5: Individual and Project Management Skill Scores

Table 5.6: Project Information Technology Utilization Score

Table 5.7: Distribution of Tier II Workers by Number of Certified Crafts.

....123 Table 5.8: Project Craft Utilization Scores

Table 5.9: Project Organization Scores

Table 5.10: Tier II Individual Scores

Table 5.11: Tier II Project Scores

–  –  –

Based on Work Sampling Method

Table 6.2: CII Model Plant Savings Due to Increased Productivity – Based on Foreman Delay Survey Method

Table 6.3: CII Model Plant Savings Due to Decreased Absenteeism.

.............143 Table 6.4: CII Model Plant Savings Due to Decreased Turnover

Table 7.1: Tier II Implementation Benefits for CII Model Plant

Table 7.2: Tier II Implementation Costs for the CII Model Plant

Table 7.3: Benefit-Cost Ratios for the CII Model Plant

Table 8.1: Tier II Individual Scores

Table 8.2: Tier II Project Scores

–  –  –

Figure 2.1: Tier II Individual Technical Skills

Figure 2.2: Tier II Individual Management Skills

Figure 2.3: Tier II Project Craft Technical Skills component

Figure 2.4: Tier II Project Craft Management Skills component

Figure 2.5: Tier II Project Information Technology Utilization component.

......25 Figure 2.6: Tier II Project Craft Utilization component

Figure 2.7: Tier II Project Organization component

Figure 2.8: Difference in Real Construction and Manufacturing Wages, 1953-2003

Figure 3.1: Determining the Tier II Baseline

Figure 3.2: Determining Improvement Required

Figure 3.3: Determining Costs

Figure 3.4: Determining Benefits

Figure 3.5: Methodology

Figure 4.1: Tier II Project Index Scores

Figure 4.2: Tier II Project Component Scores

Figure 4.3: Improvement Potential vs.

Individual Receptiveness

Figure 4.4: Individual Receptiveness – Management Skills

Figure 4.5: Individual Receptiveness – IT Utilization

Figure 4.6: Individual Receptiveness – Craft Utilization

Figure 4.7: Individual Receptiveness – Organization

Figure 5.1: Tier II Individual Technical Skills

Figure 5.2: Tier II Project Craft Technical Skills component

–  –  –

Figure 5.4: Tier II Project Craft Management Skills component

Figure 5.5: Percentage of Responses – Proficiency in Administrative Skills.

..108 Figure 5.6: Percentage of Responses – Proficiency in Computer Skills...........109 Figure 5.7: Tier II Project Information Technology Utilization component.....117 Figure 5.8: Tier II Project Craft Utilization component

Figure 5.9: Tier II Project Organization component

Figure 6.1: Craft Time Breakdown – Work Sampling Method

Figure 6.2: Craft Time Breakdown – Foreman Delay Survey Method.

............137

–  –  –

Construction is one of the largest industries in the United States. It employs more than 5 percent of the nation’s workers and produces 4.4 percent of the nation’s Gross Domestic Product (BEA 2004, BLS 2004b). Despite its size and strength, the industry struggles with a persistent skilled labor shortage, which has been documented by a number of prominent industry organizations throughout the last two decades. The Construction Users Roundtable, an organization of major purchasers of construction, “recognizes that the most critical issue facing the industry is the presence of a skilled work force shortage.” (CURT 2004b). The National Center for Construction Education and Research observed that “…clients demand increased project quality. Only those contractors with trained and skilled workers capable of meeting that demand will succeed.” (NCCER 2003a).

Many different initiatives have been developed in an effort to address this shortage, but they have generally focused on one or two aspects of the problem and have achieved varied results. Emerging research at The University of Texas at Austin, funded by the Center for Construction Industry Studies, has combined a number of workforce development and management concepts into a more comprehensive approach – the Tier II strategy – which is one potential solution to address the shortage of skilled construction labor in the United States.

1.1 INTRODUCTION TO THE TIER II STRATEGY



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