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

How ethnocentrism affects intercultural communication, Intercultural commun...

Intercultural communication is the method of sending and receiving messages between people whose cultural background leads them to interpret verbal and non-verbal signs differently

Purpose of information, Purpose of information: A researcher needs inf...

Purpose of information: A researcher needs information for three purposes.  To keep up with new developments in his area of interest;  To get acquainted with the state-o

Organisation of documentation, ORGANISATION OF DOCUMENTATION: The docu...

ORGANISATION OF DOCUMENTATION: The documentation and information centres at local levels that are attached to individual R&D institutions, business houses, industrial enterpri

Library furniture in physical planning of library , LIBRARY FURNITURE IN PH...

LIBRARY FURNITURE IN PHYSICAL PLANNING OF LIBRARY IN LIBRARY MANAGEMENT Just as a library  building is a specialised structure with specific functions, the furniture for  a li

User interface - value-added information services, The User Interface  ...

The User Interface  User interfaces are mechanisms built into information systems and services to enable the users to utilise these services in an effective manner. The interf

Explain e-compensation tools, In most modern organizations, the employment ...

In most modern organizations, the employment relationship has shifted from being life-long with career management provided by the organization into being more short-term with emplo

Objectives of conference centre, Question 1: You have been hired as a c...

Question 1: You have been hired as a consultant for an event venue, and your task consist of advising the management on the requirements of the conference area which they plan

Disadvantages of the first past the post electoral system, QUESTION 1 O...

QUESTION 1 Outline the constitutional and political history of Mauritius from 1947 to 1959 with reference to (i) the right to vote (ii) the partial transfer of power through

Quantitative methods, statistics are not mainly the records of the past but...

statistics are not mainly the records of the past but they are useful in the planing of the future. Discuss the statement and explain the role of statistics in economic planning.

What are the health and safety effects of shift work, QUESTION 1 (a) Wh...

QUESTION 1 (a) What is ergonomics? How would you identify ergonomic problems and what kind of workplace problems can ergonomics solve? (b) How would you improve the design o

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