Lesson # 3:
statistical data also lead to the misconception that productivity
varies more between companies (or countries) than is really the
Let us suppose that your company is placing two
construction contracts with two different companies. The weight of
the two jobs is 5 tonnes and 10 tonnes respectively.
At completion it becomes known that the
contractor doing the largest job spent 60 manhours/tonne on the job,
while the other contractor finished at 100manhours/tonne. Normally
we would now claim that the fabricator of the largest job was more
efficient – because he spent fewer manhours per tonne to do the job.
But was he more efficient? Not necessarily – at least not if we
believe in the norm/quantity relationship as described in the
figure. When comparing productivity we always have to base the
comparison on the same quantity! Not doing so is a very common
mistake and is crucial to the understanding of project cost. To
conclude this little article we would claim that, yes, the
productivity - in the common meaning of the word - differ, but the
efficiency is the same because the two resultant manhours/tonne
figures are both on the regression line. In the future be critical
if someone claim that a company, or indeed a whole country, is more
efficient (better productivity) than another. At least get the
person to define what is meant by productivity.