The Turkish construction industry is problematic with its inferior occupational safety practices and labor standards. This paper explores the current institutional system’s problems and designs a national institutional system to improve labor conditions in the Turkish construction industry. The study applies cause-and-effect analysis, stakeholder analysis, and information flow analysis based on the thematic literature and regulation reviews and the data collected from expert interviews. Findings revealed that the industry represents a drastically problematic context with high rates of occupational accidents, job insecurity, and excessive working time, and the inspection and enforcement system is still immature, calling for additional institutional arrangements to establish a collaborative and sustainable environment. There is a need for a holistic, multi-dimensional, and systematic perspective to develop coordination and inspection mechanisms in the sector. The paper proposes an institution and scorecard design by applying a quality function deployment framework matching needs and systemic functions that can overcome the existing deficiency in labor conditions. The paper contributes to filling the gap in the literature on the multi-dimensional, systematic institutional perspective to develop coordination and inspection mechanisms in the construction industry and proposes an institutional system example that could be adapted to other national contexts.