This study addresses the issue of poor construction labor productivity, exploring the process and methodology for increasing construction workers’ participation in labor productivity improvement, as well as a situational awareness (SA) development approach for construction workers based on lean construction (LC). A framework for enhancing labor productivity through SA has been developed. A case study approach is utilized to describe the LC improvement process, which includes enhancing construction workers’ SA for waste minimization and process optimization and engaging them in LC with improved value stream mapping (VSM). The labor productivity measurement approach, combined with VSM, is used to evaluate the labor productivity improvement with labor productivity improvement rate, resource efficiency, and flow efficiency. The results demonstrate that the labor productivity of the case project has increased by 24.07%, with 11.54% contributing resource efficiency and 88.46% contributing flow efficiency, indicating a greater increase in flow efficiency. This study fills a research gap in terms of the combination of construction workers’ SA enhancement and the involvement of LC practices to boost labor productivity. Furthermore, this study proposes an SA development approach based on LC at three levels: waste perception, VSM implementation, and labor productivity improvement assessment. This provides new perspectives for leveraging construction workers’ SA to increase labor productivity. The improved VSM approach and labor productivity measurements provide an operationalization of workers’ participation in continuous improvement. This research is of great practical relevance for augmenting the competencies of construction laborers and inspiring them to engage in labor productivity enhancement.