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.
|Title of host publication||Handbook on Project Management and Scheduling Vol. 2|
|Editors||Christoph Schwindt, Jurgen Zimmermann|
|Number of pages||16|
|Publication status||Published - 08 Oct 2014|
|Name||International Handbooks on Information Systems 2015|
- Incentive mechanism, Project performance, Improvement, Reward