Incentives, Other Management

Assignment Help:

Incentives

These are rewards given when vendor/contractor exceeds your expectation. Incentives should increase contractor?s profit. Incentives can be categorised as:

  • Cost incentive: No incentive for the contractor can be structured. In a contract where design and development are included, a value engineering clause can be incorporated to motivate the contractor to submit a proposal for cost reductions. The contractor gets the opportunity to consider an extra profit for himself while quoting the price reduction.
  • Technical incentive: These are incentives for quality and performance of work. These can also be applied to contracts which include design and development in addition to construction.
  • Schedule incentive: All construction contracts incorporate a Liquidated Damages (LD) clause which refers to penalty for delay in time of completion. Sometimes a Bonus clause for early completion is incorporated. In such a case, the LD clause is called a Penalty clause.

Caution must be exercised while combining cost, technical and schedule incentives in a contract to ensure that different incentives do not counteract or conflict with each other. Also, when more than one contract is awarded, one contractor who is given an incentive for early completion may complete his work early but this will turn out to be a benefit only if you can ensure that the following interfacing contractor can commence his work consistent with the previous contractor?s work completion.


Related Discussions:- Incentives

Publisher casings and paperbacks - library bindings, Publishers' Casings an...

Publishers' Casings and Paperbacks  It is a light straw-board cover, over which an attractive coloured cloth is glued. This casing is attached to the book itself by narrow tap

Describe the conflict-resolving styles, Question: (a) Conflicts, as an ...

Question: (a) Conflicts, as an aspect of managing change, is inevitable in organisations. Show the main sources of conflict in the workplace and elaborate on three of them?

Improve public sector performance, QUESTION 1 A core concept in implem...

QUESTION 1 A core concept in implementing TQM is Deming's 14 points, a set of management practices to help companies increase their quality and productivity. List 7 points and

Selective dissemination of information (sdi), Selective Dissemination of In...

Selective Dissemination of Information (SDI): The SDI is a type of current awareness service, the objective of which is to keep users of the system informed of new development

Difference between dictionary and classified catalogue, Difference between ...

Difference between dictionary and classified catalogue: Of the many inner forms of a library catalogue, the most popular ones are the dictionary and classified catalogues. The

Document delivery service - world scenario, DOCUMENT DELIVERY SERVICE .WORL...

DOCUMENT DELIVERY SERVICE .WORLD SCENARIO: Earlier libraries and information centres had no capability to deliver the documents other than to buy them from the publishers, dis

Kinds of library bindings, KINDS OF LIBRARY BINDINGS: Having got a bri...

KINDS OF LIBRARY BINDINGS: Having got a brief introduction to the processes of binding, lot us discuss the kinds of binding required for the different types of documents in a

Derive and explain the capital market line, QUESTION (a) Derive and exp...

QUESTION (a) Derive and explain the Capital Market Line. Make and state all necessary assumptions (b) Explain clearly how you would test for- (i) the size effect (ii)

Role of regulator and players, Question 1 Consider yourself as a chief fin...

Question 1 Consider yourself as a chief financial officer, describe the treasury functions that you handle and discuss how you will formulate the treasury policy Question 2 T

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd