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

HRM in HEALTH CARE MANAGEMENT, EXPLAIN THE IMPORTANCE OF HRM IN HEALTH CARE...

EXPLAIN THE IMPORTANCE OF HRM IN HEALTH CARE MANGEMNT

Characteristics that influence the cultural environment, Question 1: Id...

Question 1: Identify the raison d'etre and the relation of culture in hospitality. Use a diagram to illustrate the characteristics that influence the cultural environment and

Organisation initiator, T he Organisation initiator The initiator firs...

T he Organisation initiator The initiator first identifies the need to purchase a particular product or service to crack an organisational problem. Change management is a c

Compensation management, In 2001, a Chennai- based two- wheeler major intro...

In 2001, a Chennai- based two- wheeler major introduced a bonus scheme for its employees. Employees covered under this bonus scheme are evaluated through a three-tier process- (1)

Library equipment in physical planning of library , LIBRARY EQUIPMENT IN PH...

LIBRARY EQUIPMENT IN PHYSICAL PLANNING OF LIBRARY IN LIBRARY MANAGEMENT Most of the equipment used in the library is standard office equipment, sometimes adapted library use.

Composition of solid waste, The composition of solid waste from a residenti...

The composition of solid waste from a residential community is as follows: Component Percent by weight Combustibles ---

Prussian instructions - british museum cataloguing rules, Prussian Instruct...

Prussian Instructions: The Prussian instructions. Rules for the alphabetical catalogues of the Prussian libraries l translated from the 2nd edition, authorized, 1908; with an

Relationship between values and organisation culture, Question: A stron...

Question: A strong and positive culture helps develop the consensus needed for organisations to cope well with changing environments. (a) Describe what is meant by organisat

Biology, What are the characteristics of Protozoa?

What are the characteristics of Protozoa?

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