IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v64y2011i7p765-773.html
   My bibliography  Save this article

Motivation toward financial incentive goals on construction projects

Author

Listed:
  • Rose, Timothy
  • Manley, Karen

Abstract

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.

Suggested Citation

  • Rose, Timothy & Manley, Karen, 2011. "Motivation toward financial incentive goals on construction projects," Journal of Business Research, Elsevier, vol. 64(7), pages 765-773, July.
  • Handle: RePEc:eee:jbrese:v:64:y:2011:i:7:p:765-773
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148-2963(10)00129-3
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
    2. 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.
    3. 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).
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. Robert Gibbons, 1998. "Incentives in Organizations," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 115-132, Fall.
    9. 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.
    10. 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.
    11. Sliwka, Dirk, 2003. "On the Hidden Costs of Incentive Schemes," IZA Discussion Papers 844, Institute for the Study of Labor (IZA).
    12. 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.
    13. 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)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:eee:ejores:v:261:y:2017:i:3:p:1066-1084 is not listed on IDEAS
    2. Rodríguez-Segura, Enrique & Ortiz-Marcos, Isabel & Romero, José Javier & Tafur-Segura, Javier, 2016. "Critical success factors in large projects in the aerospace and defense sectors," Journal of Business Research, Elsevier, vol. 69(11), pages 5419-5425.
    3. Kerkhove, L.P. & Vanhoucke, M., 2016. "Incentive contract design for projects: The owner׳s perspective," Omega, Elsevier, vol. 62(C), pages 93-114.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.