This book proposes ways to make construction project incentive schemes effective. In this book, construction incentivization is used as a collective term that includes all forms of incentive arrangements aiming to engender extra effort of the contracting parties for the improvement of project performance. This book addresses two questions: i) why so many construction incentive schemes are not delivering the desired outcome? and ii) what will make incentive works under different circumstances? This book contributes to the body of knowledge in construction incentivization by offering conceptualization, showcases and practice suggestions including guidelines for the planning of construction incentive schemes.
Author(s): Sai On Cheung, Liuying Zhu
Series: Digital Innovations in Architecture, Engineering and Construction
Publisher: Springer
Year: 2023
Language: English
Pages: 296
City: Cham
Foreword by Roger Flanagan
Foreword by Makarand Hastak
Preface
Contents
Editors and Contributors
Part I Conceptualization
1 A Primer of Incentivization in Construction
1 Introduction
2 The Study
2.1 Motivation Theories
2.2 Outcome Targets
2.3 Performance
2.4 Implication on Design of Incentive in Construction
3 A Mapping Framework for Procurement Options and Incentive Arrangement
4 Incentivization in Construction
5 Summary
References
2 Construction Incentivization in Perspective
1 Introduction
2 Types of Incentives Commonly Used in Construction
3 Overview of the Practice of Construction Incentivisation
3.1 Types of Incentive
3.2 Other Notable Observations
4 Theoretical Anchors of Incentivization
4.1 Utility Theory
4.2 Principal Agent Theory
4.3 Prospect Theory
5 Construction Incentivization in Perspective
5.1 An Integrative Framework for CI Design
5.2 Operationalizing the Integrative Framework
5.3 Discussion
6 Summary
References
3 Incentivization or Disincentivisation
1 Introduction
2 Literature Review
3 Using Incentives as Sweetener for contractor’s Negotiation Participation
3.1 Case A. Target Cost Contract for Public Water Storage Project
3.2 Case B. Target Cost Contract for Tunnel Building
3.3 Case C. Schedule Incentives for Accelerating the Completion of Revitalization Project
3.4 Case D. Safety Schemes in Residential Construction Project
3.5 Case E. Residential Project with Financial Bonus Scheme
3.6 The Application of Incentives in These Cases
4 Application of Disincentives in Mega Project Management
4.1 Project Particulars
4.2 The Use of Disincentivisation in HZMB Project
4.3 The Project Control Functions of the System
5 The Project Prerequisites for the Use of I/D
5.1 The Project Prerequisites for the Use of Incentivisation
5.2 The Project Prerequisites for the Use of Disincentivisation
6 Summary
References
4 Behavioural Considerations in Construction Incentivization Planning
1 Introduction
2 Examples of Normative Principles
2.1 Principles of Innovation (TRIZ Methodology)
2.2 Principles of Contract Planning
2.3 Risk Allocation Principles
2.4 Characteristics of Normative Principles
3 Construction Incentivization and Project Performance
4 The Behavioural Dimensions of Construction Incentivization
4.1 Equity Gap Between Contracting Parties
4.2 Interorganizational Relationship
5 Testing of Hypotheses
5.1 Structural Equation Modelling
5.2 Importance-Performance Map Analysis
6 Data Analysis
6.1 Data Description
6.2 The Results of PLS-SEM Analysis
7 The Results of ISMA
8 Implications for the Planning of Behaviour-Based CI
9 Summary
Appendix: Data Collection Form and Descriptions
References
Part II Strategic Uses
5 Incentivizing Relationship Investment for Mega Project Management
1 Introduction
2 Interorganizational Relationships in Construction Projects
2.1 The Developer-Contractor Interorganizational Relationship
2.2 Key Dimensions of the Interorganizational Relationships in Construction
3 Relationship Investment from Construction Incentivization
3.1 Identification of Construction Incentivization
3.2 Project Performance
3.3 The Relationships Among CI, IOR and PP
4 Empirical Study
5 Discussion and Recommendations
6 Summary of Chapter
References
6 Multi-agent Incentivizing Mechanism for Integrated Project Delivery
1 Introduction
2 Overview of Risk/Reward Sharing Incentive
2.1 Setting Target Cost
2.2 Sharing Risk/Reward Among Contracting Parties
3 Revisiting Multi-agent Risk/Reward Sharing Incentive for IPD
3.1 Definition, Origin and Characteristics of IPD
3.2 Key Features of Multi-agent Risk/Reward Sharing Incentive in IPD Context
3.3 Research Models for Multi-agent Risk/Reward Sharing Incentive
4 Optimum Model of Multi-agent Risk/Reward Sharing Incentive
4.1 Model Development
4.2 Numerical Example
5 Practical Implications
5.1 Design of Incentive Mechanism for IPD Projects
5.2 Coupling BIM and Blockchain with IPD Incentivising Mechanism
6 Summary
References
7 Would Raising Psychological Well-Being Incentivize Construction Workers?
1 Introduction
2 Conceptualisation of Psychological Well-Being in the Construction Industry
3 Psychological Well-Being and Motivation at Work
4 What Impacts Worker Psychological Well-Being in the Construction Industry?
5 How to Improve Construction Worker Well-Being and Motivate Engagement at Work?
6 Summary
References
8 Revamping Incrementalism to Incentivize the Land and Housing Policy Agendas in Hong Kong
1 Introduction
2 Incrementalism
2.1 Cognitive Limitations (P1 in Fig. 1)
2.2 Diverging Interests (P2 in Fig. 1)
2.3 Changing Policy Goals (P3 in Fig. 1)
3 Revamp
3.1 Institutionalist Inquiry (P4 in Fig. 1)
3.2 Behavioural Economics Inquiry (P5 in Fig. 1)
4 Incentivization
4.1 Normative Incentives (P6 in Fig. 1)
4.2 Affective Incentives (P7 in Fig. 1)
4.3 Calculative Incentives (P8 in Fig. 1)
5 The Conceptual Model and Propositions
6 Discussion
7 Summary
References
Part III Specific Uses
9 Means to Incentivize Safety Compliance at Work
1 Introduction
2 Health and Safety Acts
3 Penalty and Prosecution
4 Means to Incentivize Safety Compliance
4.1 Financial Incentives
4.2 Non-financial Incentives
4.3 Safety Incentive System (Both Financial and Non-financial)
5 Discussion
5.1 Future Research Areas
6 Summary
References
10 The Role of Incentivization to Mitigate the Negative Impact of COVID-Related Disputes
1 Introduction
2 Research Methodology
3 Interviewee Profile
4 Findings and Discussions
4.1 Rationale Behind the Decision-Making in EOT and L&E Claims
4.2 Effectiveness of the Existing Contract Terms in Avoiding COVID-19 Related Disputes
4.3 The Role of Incentivization in Rebalancing Risk Allocation
4.4 The Need for Formalising Incentivization in Contracts
5 Summary
References
11 Interweaving Incentives and Disincentives for Construction Dispute Negotiation Settlement
1 Introduction
1.1 Research Background
1.2 The Significance of Intention to Settle
1.3 Sources of Incentives and Disincentives
2 Social Motive (Intra-Organizational Level)
2.1 The Anatomy of Social Motive in Negotiation
2.2 The Incentive and Disincentive of Social Motive
3 Cognition Against the Counterpart (Inter-Organizational Level)
3.1 Justice
3.2 Power
4 Psychological Bonding Mechanism (Project Level)
4.1 Trust
4.2 Shared Vision
5 The Integrative Incentive/Disincentive Influence on Intention to Settle
6 Summary
References
12 Voluntary Participation as an Incentive of Construction Dispute Mediation—A Reality Check
1 Introduction
2 Construction Dispute Resolution
2.1 Nature of Construction Dispute
2.2 Approaches in Resolution
2.3 Resolution Methods
2.4 Use of Mediation in Hong Kong
2.5 Voluntary Participation of CDM
3 Reality Checks on Construction Contracting and Mediation
3.1 Principal-Agent Relationship
3.2 Power Asymmetry
3.3 Quasi Imposition of Construction Mediation
3.4 Disputants’ Perceptions of the Used of Mediation
4 Voluntary Mediation and the Reality
4.1 Power Asymmetry
4.2 Quasi-Imposition
5 Voluntary Participation as an Incentive for Use of Construction Dispute Mediation
6 Summary
References
