Behavioral Considerations in Construction Incentivization Planning

Liuying Zhu; Sai On Cheung

doi:10.1007/978-3-031-28959-0_4

Behavioral Considerations in Construction Incentivization Planning

Liuying Zhu^*
, Sai On Cheung

^*Corresponding author for this work

Department of Architecture and Civil Engineering

Research output: Chapters, Conference Papers, Creative and Literary Works › RGC 12 - Chapter in an edited book (Author)

Abstract

It is quite often assumed that all enterprises seek continual performance. In this regard, incentives in various forms have been used as performance motivators. Typically, incentive arrangements in construction involve setting cost, schedule, and outcome performance targets. Moreover, the success of incentive schemes is not guaranteed. Many projects with incentives still end with project overruns, huge claims, and embarrassing defects. It is advocated that defective design is one of the key causes of the nonfunctioning of incentive arrangements. This study reminds us that there are certain norms to be followed in the planning of construction incentivization. The characteristics of three well-known normative principles are introduced. In addition, this study advocates that construction incentivization should also be planned to engender the commitment of the contracting parties. In this respect, managing behaviours between the parties should be one of the planning norms of construction incentivization. Empirical support is also provided. © 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG

Original language	English
Title of host publication	Construction Incentivization
Subtitle of host publication	Beyond Carrot and Stick
Editors	Sai On Cheung, Liuying Zhu
Publisher	Springer, Cham
Chapter	4
Pages	63-97
Number of pages	35
ISBN (Electronic)	978-3-031-28959-0
ISBN (Print)	978-3-031-28958-3
DOIs	https://doi.org/10.1007/978-3-031-28959-0_4
Publication status	Published - 2023

Publication series

Name	Digital Innovations in Architecture, Engineering and Construction
Publisher	Springer
ISSN (Print)	2731-7269
ISSN (Electronic)	2731-7277

Funding

The development of equity gap has been quoted from the paper “Toward an Equity-Based Analysis of Construction Incentivization” of the Journal of Construction Engineering and Management. The work described in this chapter was fully supported by an HKSAR RGC project (number 11202722).

Research Keywords

Motivation
Performance
Behavioral outcomes
Planning Norms

RGC Funding Information

RGC-funded

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10.1007/978-3-031-28959-0_4

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Check CityUHK Library

Permanent Link

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GRF: Toward Behaviour-based Construction Incentivisation
CHEUNG, S. O. (Principal Investigator / Project Coordinator), HUMPHREY, S. (Co-Investigator) & LEE, F. C. (Co-Investigator)
1/07/22 → 22/12/25
Project: Research

Cite this

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Behavioral Considerations in Construction Incentivization Planning. / Zhu, Liuying; Cheung, Sai On.
Construction Incentivization: Beyond Carrot and Stick. ed. / Sai On Cheung; Liuying Zhu. Springer, Cham, 2023. p. 63-97 (Digital Innovations in Architecture, Engineering and Construction).

Research output: Chapters, Conference Papers, Creative and Literary Works › RGC 12 - Chapter in an edited book (Author)

TY - CHAP

T1 - Behavioral Considerations in Construction Incentivization Planning

AU - Zhu, Liuying

AU - Cheung, Sai On

PY - 2023

Y1 - 2023

N2 - It is quite often assumed that all enterprises seek continual performance. In this regard, incentives in various forms have been used as performance motivators. Typically, incentive arrangements in construction involve setting cost, schedule, and outcome performance targets. Moreover, the success of incentive schemes is not guaranteed. Many projects with incentives still end with project overruns, huge claims, and embarrassing defects. It is advocated that defective design is one of the key causes of the nonfunctioning of incentive arrangements. This study reminds us that there are certain norms to be followed in the planning of construction incentivization. The characteristics of three well-known normative principles are introduced. In addition, this study advocates that construction incentivization should also be planned to engender the commitment of the contracting parties. In this respect, managing behaviours between the parties should be one of the planning norms of construction incentivization. Empirical support is also provided. © 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG

AB - It is quite often assumed that all enterprises seek continual performance. In this regard, incentives in various forms have been used as performance motivators. Typically, incentive arrangements in construction involve setting cost, schedule, and outcome performance targets. Moreover, the success of incentive schemes is not guaranteed. Many projects with incentives still end with project overruns, huge claims, and embarrassing defects. It is advocated that defective design is one of the key causes of the nonfunctioning of incentive arrangements. This study reminds us that there are certain norms to be followed in the planning of construction incentivization. The characteristics of three well-known normative principles are introduced. In addition, this study advocates that construction incentivization should also be planned to engender the commitment of the contracting parties. In this respect, managing behaviours between the parties should be one of the planning norms of construction incentivization. Empirical support is also provided. © 2023 The Author(s), under exclusive license to Springer Nature Switzerland AG

KW - Motivation

KW - Performance

KW - Behavioral outcomes

KW - Planning Norms

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DO - 10.1007/978-3-031-28959-0_4

M3 - RGC 12 - Chapter in an edited book (Author)

SN - 978-3-031-28958-3

T3 - Digital Innovations in Architecture, Engineering and Construction

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BT - Construction Incentivization

A2 - Cheung, Sai On

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ER -

Behavioral Considerations in Construction Incentivization Planning

Abstract

Publication series

Funding

Research Keywords

RGC Funding Information

Access Output

Other Access Options

Permanent Link

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Projects

GRF: Toward Behaviour-based Construction Incentivisation

Cite this