Kwawu, W and Laryea, S (2013) Incentive contracting in construction. In: Smith, S D and Ahiaga-Dagbui, D D (eds.) Proceedings of 29th Annual ARCOM Conference, 2-4 September 2013, Reading, UK.
Abstract
The question of how best to incentivize the parties in a construction contract, particularly contractors, to deliver maximum possible outputs and thus help reduce costs and risk in contracts has been of constant interest to construction researchers and practitioners. There is thus a significant body of literature around incentive contracting but this needs to be critically evaluated for perspectives and future directions. Although the evolving nature, merits and use of incentive contracts within the construction industry has been considerably discussed by practitioners and researchers over several years, there seems to be a lack of critical review of the incentive contracts literature that contextualises and critiques the various perspectives, directions and applications in the construction industry. More importantly it is important to discover what we do not know yet about incentive contracting in construction to provide a means for further scientific enquiry into those aspects. This paper seeks to offer an evaluation and critical review of the current literature on the theory and practice of incentive contacts. Based on articles published in highly rated built environment journals, the issues and challenges of balancing risks, cost incentives and performance incentives that minimise or maximise the effectiveness and performance of incentive contracts are systematically reviewed and critically evaluated. The paper identifies trends in incentive contracting and concludes that the underlying needs of a client and the motivations of a contractor can be jointly put at the heart of the design and structuring of contract mechanisms and incentives to provide an appropriate infrastructure for incentivising innovative and sustainable delivery of contracts. The paper offers new directions for incentive contracting research and its application in construction.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | contracting; incentive contracting; literature review; procurement |
| Index terms: | journal, incentive contract, motivation, critique, literature review, construction industry, heart, construction contract, built environment, effectiveness, practitioner |
| Subjects: | industry analysis, infrastructure and transport systems, performance management, medical science and clinical practice, psychology, data analysis and analytics, contractual arrangements, contract type, evaluation and assessment methods, research dissemination and communication, practitioner |
| Topics: | Research Practice, Health and Safety, Procurement, Roles and Professions, Quality Management, Human Resources, Urban Studies |
| Descriptive scope: | 4 PCTA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here