Motivation toward financial incentive goals on construction projects
Construction industry observers tout the use of financial incentives as promoters of motivation and commitment on projects. Yet, little empirical evidence exists concerning their effectiveness. What are the drivers of motivation on construction projects? The reasons that construction project participants are motivated to pursue voluntary incentive goals are examined through four Australian case studies. The results demonstrate the critical role played by project relationships and equitable contract conditions in promoting the effectiveness of financial incentives. In the context of a construction project, this study finds financial incentives to be less important to motivation and performance than relationship enhancement initiatives. This finding is unexpected and has implications for the design of project procurement strategies. These results suggest that if project clients ignore the importance of relationship quality between participants, the impact of any financial incentive will be compromised.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fehr, Ernst & Falk, Armin, 2002.
"Psychological foundations of incentives,"
European Economic Review,
Elsevier, vol. 46(4-5), pages 687-724, May.
- Ernst Fehr & Armin Falk, "undated". "Psychological Foundations of Incentives," IEW - Working Papers 095, Institute for Empirical Research in Economics - University of Zurich.
- Ernst Fehr, 2003. "Psychological Foundations of Incentives," Microeconomics 0305010, EconWPA.
- Ernst Fehr & Armin Falk, 2002. "Psychological Foundations of Incentives," CESifo Working Paper Series 714, CESifo Group Munich.
- Falk, Armin & Fehr, Ernst, 2002. "Psychological Foundations of Incentives," CEPR Discussion Papers 3185, C.E.P.R. Discussion Papers.
- Fehr, Ernst & Falk, Armin, 2002. "Psychological Foundations of Incentives," IZA Discussion Papers 507, Institute for the Study of Labor (IZA).
- Sliwka, Dirk, 2003. "On the Hidden Costs of Incentive Schemes," IZA Discussion Papers 844, Institute for the Study of Labor (IZA).
- Dirk Sliwka, 2003. "On the Hidden Costs of Incentive Schemes," Bonn Econ Discussion Papers bgse12_2003, University of Bonn, Germany.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Marco Herpen & Mirjam Praag & Kees Cools, 2005. "The Effects of Performance Measurement and Compensation on Motivation: An Empirical Study," De Economist, Springer, vol. 153(3), pages 303-329, September.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
- Robert Gibbons, 1998. "Incentives in Organizations," NBER Working Papers 6695, National Bureau of Economic Research, Inc.
- Karen Manley, 2006. "The innovation competence of repeat public sector clients in the Australian construction industry," Construction Management and Economics, Taylor & Francis Journals, vol. 24(12), pages 1295-1304.
- Ariño, Africa & de la Torre, Jose & Ring, Peter S., 2001. "Relational quality: Managing trust in corporate alliances," IESE Research Papers D/434, IESE Business School.
- Moers F, 2000. "The Role of Performance Measure Characteristics in the Design of Incentive Systems: An Empirical Analysis," Research Memorandum 020, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
- Ranjay Gulati & Maxim Sytch, 2008. "Does familiarity breed trust? Revisiting the antecedents of trust," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 165-190.
- J. Rodney Turner, 2004. "Farsighted project contract management: incomplete in its entirety," Construction Management and Economics, Taylor & Francis Journals, vol. 22(1), pages 75-83.
- Mike Bresnen & Nick Marshall, 2000. "Motivation, commitment and the use of incentives in partnerships and alliances," Construction Management and Economics, Taylor & Francis Journals, vol. 18(5), pages 587-598.
- Andersen, Poul Houman & Cook, Nicole & Marceau, Jane, 2004. "Dynamic innovation strategies and stable networks in the construction industry: Implanting solar energy projects in the Sydney Olympic Village," Journal of Business Research, Elsevier, vol. 57(4), pages 351-360, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:64:y:2011:i:7:p:765-773. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.