Incentive Mechanisms and Their Impact on Project Performance

Xianhai Meng ()
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Xianhai Meng: Queen’s University Belfast

Chapter Chapter 47 in Handbook on Project Management and Scheduling Vol. 2, 2015, pp 1063-1078 from Springer

Abstract: Abstract Good performance characterizes project success and value for money. However, performance problems are not uncommon in project management. Incentivization is generally recognized as a strategy of addressing performance problems. This chapter aims to explore incentive mechanisms and their impact on project performance. It is mainly based on the use of incentives in construction and engineering projects. The same principles apply to project management in other industry sectors. Incentivization can be used in such performance areas as time, cost, quality, safety and environment. A client has different ways of incentivizing his contractor’s performance, e.g. (1) a single incentive or multiple incentives; and (2) incentives or disincentives or a combination of both. The establishment of incentive mechanisms proves to have a significant potential for relationship development, process enhancement and performance improvement. In order to ensure the success of incentive mechanisms, both contractors and clients need to make extra efforts. As a result, a link is developed among incentive mechanisms, project management system and project performance.

Keywords: Improvement; Incentive mechanism; Project performance; Reward (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:ihichp:978-3-319-05915-0_17

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DOI: 10.1007/978-3-319-05915-0_17

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