Incentive Systems to Support Collaboration in Construction Projects

In Germany construction projects are based on traditional contracts with competitive bidding, which do not support collaboration. The behavior of non-cooperation results in a mass of claims and problems by the final inspection up to legal proceedings. Furthermore, the complex and dynamic environment as well as the asymmetric information between the participants of a construction project lead to uncertainty, which often ends in conflicts between contractor and client. To fight against the uncertainty a collaborative project environment based on an incentive system has to be built in order to share information and knowledge. The theory of incentive systems mostly concentrates on material incentives particularly on financial incentives, while the intrinsic motivation of the participants has a very high impact of the project success. By reviewing the literature it can be hypothesized that the implementation of an incentive system consisting of monetary and non-monetary incentives will increase the total project performance. Therefore, this paper will focus on managing an incentive system to support the collaboration in a construction project in order to realize the optimal delivery of the project. In the end of the paper suggestions for further research are given.