PhD Final Thesis April 2013.pdf - Anglia Ruskin Research Online

Thesis Keith Gale 2013coupled with advanced contracting methods could improve commitment andmotivation within projects. Although financial incentives predominate,incentivisation between organisations may also operate at a socio-psychologicallevel. Collaborative working involves commitment from suppliers without reciprocalguarantees of work from clients (Hughes et al, 2006) – and yet these arrangementsencourage strong motivation through continued relationships. A resume of keyincentive systems are given in Table 3.4 summarised from research undertaken byRose and Manley (2010).Table 3.4: Key incentive systems (adapted from Rose and Manley (2010))FinancialincentivesMeasurement Use of target costcontracts whereincentive is appliedto the differencebetween actualcosts and the targetsumReward allocation Share ratio agreedwithin the contractdocumentsIncentivevariablesPositive attributesNegativeattributesProfit or losssharing is basedupon a sharedprofile alignedwith the risks foreach contractEncourages partiesto work together toreduce costsFocuses upon costrather than otherareas to a projectPerformanceincentivesSet keyperformanceindicators whichare monitoredthrough the projectlife cycleFinancial bonuspaymentBenchmarking andcomparativeoutcomes related toperformanceIncentives can bealigned to projectpriorities toimprove supplierperformanceRequires strongmanagementstructure withsignificant set upand maintenancecostsMixed methodsCombines targetcostmethodologywith keyperformancetargetsAggregate offinancial savingsand bonuspaymentsSignificantnumber ofcombinationsused to calculatethe finaloutcomepaymentFlexible methodof ensuring allareas ofperformance areincluded withintheincentivisationsystemQuite complex toadminister andconflict ofresults may becontentious63