Client recommendations for financial incentives on construction projects

Purpose: To provide recommendations for construction clients who design and implement financial incentive mechanisms (FIMs) on projects. ---------- Methodology: Four large Australian building projects commissioned by government clients under managing contractor contracts and completed between 2001 and 2005 were examined to explore the ‘drivers’ that promoted motivation toward financial incentive goals. The results were triangulated across data sources, projects and stakeholder types. ---------- Findings: FIM design should incorporate: 1. flexibility to modify goals and measurement procedures over time, 2. multiple goals covering different project areas, 3. distribution of rewards across all the key organizations contributing to team performance (e.g. potentially not just the contractor, but the subcontractors and consultants) and a reward amount sufficient to be valued by potential recipients. FIM benefits are maximized through the following complementary procurement initiatives: 4. equitable contract risk allocation, 5. early contractor involvement in design, 6. value-driven tender selection, 7. relationship workshops, and 8. future work opportunities.---------- Research Limitations: This paper provides practical recommendations to industry and hence does not emphasize theoretical aspects.---------- Practical Implications: The uptake of these recommendations is likely to increase the impact of FIMs on motivation and improve project and industry outcomes. Although the study focuses on government clients of building projects, all the recommendations would seem to apply equally to private-sector clients and to non-building projects.---------- Originality: In order to improve motivation and reward high performance, clients are increasingly using FIM in their construction contracts. Despite the rising use of financial incentives, there is a lack of comprehensive construction-specific knowledge available to help clients maximize outcomes. The study addresses this gap in the literature.

Relationship management as a strategy for supply chain engagement in the civil engineering construction industry

Many studies into construction procurement methods reveal evidence of a need to change the culture and attitude in the construction industry, transition from traditional adversarial relationships to cooperative and collaborative relationships. At the same time there is also increasing concern and discussion on alternative procurement methods, involving a movement away from traditional procurement systems. Relational contracting approaches, such as partnering and relationship management, are business strategies that align the objectives of clients, commercial participants and stakeholders. It provides a collaborative environment and a framework for all participants to adapt their behaviour to project objectives and allows for engagement of those subcontractors and suppliers down the supply chain. The efficacy of relationship management in the client and contractor groups is proven and well documented. However, the industry has a history of slow implementation of relational contracting down the supply chain. Furthermore, there exists little research on relationship management conducted in the supply chain context. This research aims to explore the association between relational contracting structures and processes and supply chain sustainability in the civil engineering construction industry. It endeavours to shed light on the practices and prerequisites for relationship management implementation success and for supply sustainability to develop. The research methodology is a triangulated approach based on Cheung.s (2006) earlier research where questionnaire survey, interviews and case studies were conducted. This new research includes a face-to-face questionnaire survey that was carried out with 100 professionals from 27 contracting organisations in Queensland from June 2008 to January 2009. A follow-up survey sub-questionnaire, further examining project participants. perspectives was sent to another group of professionals (as identified in the main questionnaire survey). Statistical analysis including multiple regression, correlation, principal component factor analysis and analysis of variance were used to identify the underlying dimensions and test the relationships among variables. Interviews and case studies were conducted to assist in providing a deeper understanding as well as explaining findings of the quantitative study. The qualitative approaches also gave the opportunity to critique and validate the research findings. This research presents the implementation of relationship management from the contractor.s perspective. Findings show that the adaption of relational contracting approach in the supply chain is found to be limited; contractors still prefer to keep the suppliers and subcontractors at arm.s length. This research shows that the degree of match and mismatch between organisational structuring and organisational process has an impact on staff.s commitment level and performance effectiveness. Key issues affecting performance effectiveness and relationship effectiveness include total influence between parties, access to information, personal acquaintance, communication process, risk identification, timely problem solving and commercial framework. Findings also indicate that alliance and Early Contractor Involvement (ECI) projects achieve higher performance effectiveness at both short-term and long-term levels compared to projects with either no or partial relationship management adopted.

Analysing governance categories used on project alliances in the construction industry

In Australia, collaborative contracts, and in particular, project alliances, have been increasingly used to govern infrastructure projects. These contracts use formal and informal governance mechanisms to manage the delivery of infrastructure projects. Formal mechanisms such as financial risk sharing are specified in the contract, while informal mechanisms such as integrated teams are not. Given that the literature contains a multiplicity of often untestable definitions, this paper reports on a review of the literature to operationalize the concepts of formal and informal governance. This work is the first phase of a study that will examine the optimal balance of formal and informal governance structures. Desk-top review of leading journals in the areas of construction management and business management, as well as recent government documents and industry guidelines, was undertaken to to conceptualise and operationalize formal and informal governance mechanisms. The study primarily draws on transaction-cost economics (e.g. Williamson 1979; Williamson 1991), relational contract theory (Feinman 2000; Macneil 2000) and social psychology theory (e.g. Gulati 1995). Content analysis of the literature was undertaken to identify key governance mechanisms. Content analysis is a commonly used methodology in the social sciences area. It provides rich data through the systematic and objective review of literature (Krippendorff 2004). NVivo 9, a qualitative data analysis software package, was used to assist in this process. A previous study by the authors identified that formal governance mechanisms can be classified into seven measurable categories: (1) negotiated cost, (2) competitive cost, (3) commercial framework, (4) risk and reward sharing, (5) qualitative performance, (6) collaborative multi-party agreement, and (7) early contractor involvement. Similarly, informal governance mechanisms can be classified into four measureable categories: (1) leadership structure, (2) integrated team, (3) team workshops, and (4) joint management system. This paper explores and further defines the key operational characteristics of each mechanism category, highlighting its impact on value for money in alliance project delivery. The paper’s contribution is that it provides the basis for future research to compare the impact of a range of individual mechanisms within each category, as a means of improving the performance of construction projects.

Learning routines used by firms during construction of infrastructure projects using the alliance procurement method

Collaborative contracting has emerged over the past 15 years as an innovative project delivery framework that is particularly suited to infrastructure projects. Australia leads the world in the development of project and program alliance approaches to collaborative delivery. These approaches are considered to promise superior project results. However, very little is known about the learning routines that are most widely used in support of collaborative projects in general and alliance projects in particular. The literature on absorptive capacity and dynamic capabilities indicates that such learning enhances project performance. The learning routines employed at corporate level during the operation of collaborative infrastructure projects in Australia were examined through a large survey conducted in 2013. This paper presents a descriptive summary of the preliminary findings. The survey captured the experiences of 320 practitioners of collaborative construction projects, including public and private sector clients, contractors, consultants and suppliers (three per cent of projects were located in New Zealand, but for brevity’s sake the sample is referred to as Australian). The majority of projects identified used alliances (78.6%); whilst 9% used Early Contractor Involvement (ECI) contracts and 2.7% used Early Tender Involvement contracts, which are ‘slimmer’ types of collaborative contract. The remaining 9.7% of respondents used traditional contracts that employed some collaborative elements. The majority of projects were delivered for public sector clients (86.3%), and/or clients experienced with asset procurement (89.6%). All of the projects delivered infrastructure assets; one third in the road sector, one third in the water sector, one fifth in the rail sector, and the rest spread across energy, building and mining. Learning routines were explored within three interconnected phases: knowledge exploration, transformation and exploitation. The results show that explorative and exploitative learning routines were applied to a similar extent. Transformative routines were applied to a relatively low extent. It was also found that the most highly applied routine is ‘regularly applying new knowledge to collaborative projects’; and the least popular routine was ‘staff incentives to encourage information sharing about collaborative projects’. Future research planned by the authors will examine the impact of these routines on project performance.

Use of contract models to improve environmental outcomes in transport infrastructure construction

The type of contract model may have a significant influence on achieving project objectives, including environmental and climate change goals. This research investigates non-standard contract models impacting greenhouse gas emissions (GHG) in transport infrastructure construction in Australia. The research is based on the analysis of two case studies: an Early Contractor Involvement (ECI) contract and a Design and Construct (D&C) contract with GHG reduction requirements embedded in the contractor selection. Main findings support the use of ECIs for better integrating decisions made during the planning phase with the construction activities, and improve environmental outcomes while achieving financial and time savings. Key words: greenhouse gases reduction; road construction; contracting; ECI; D&C

Sustainability Non-Price Incentives and Rewards: A Collaborative Procurement Perspective

Construction scholars suggest that procurement processes can be used as mechanisms to change construction industry practices. This paper discusses industry changes as a response to the calls for integration of sustainability ideals into construction practices. Because major infrastructure construction has been identified as a key producer of greenhouse gas emissions (GHGE), this study explores collaborative procurement models that have been used to facilitate mitigation of GHGE. The study focuses on the application of non-price incentives and rewards that work together as a binary mechanism. Data were collected using mixed-methods: government document content analysis was complemented with data collected through focus groups and individual interviews with both clients and contractors. This report includes examples of greening procurement agendas for three Australian road authorities relating to collaborative procurement project delivery models. Three collaborative procurement models, Alliance Consortium, Early Contractor Involvement and Public Private Partnerships provide evidence of construction projects that were completed early. It can also be argued that both clients and contractors are rewarded through collaborative project delivery. The incentive of early completion is rewarded with reduction of GHGE. This positive environmental outcome, based on a dual benefit and non-price sustainability criteria, suggests a step towards changed industry practices though the use of green procurement models.

Client learning and the performance of collaborative infrastructure projects

Australia is a leading user of collaborative procurement methods, which are used to deliver large and complex infrastructure projects. Project alliances, Early Contractor Involvement (ECI), and partnering are typical examples of collaborative procurement models. In order to increase procurement effectiveness and value for money (VfM), clients have adopted various learning strategies for new contract development. However client learning strategies and behaviours have not been systematically analysed before. Therefore, the current paper undertakes a literature review addressing the research question “How can client learning capabilities be effectively understood?”. From the resource-based and dynamic capability perspectives, this paper proposes that the collaborative learning capability (CLC) of clients drives procurement model evolution. Learning routines underpinning CLC carry out exploratory, transformative and exploitative learning phases associated with collaborative project delivery. This learning improves operating routines, and ultimately performance. The conceptualization of CLC and the three sequential learning phases is used to analyse the evidence in the construction management literature. The main contribution of this study is the presentation of a theoretical foundation for future empirical studies to unveil effective learning strategies, which help clients to improve the performance of collaborative projects in the dynamic infrastructure market.

Social inequalities and parent involvement in children’s education in the early years of school

Strengthening cooperation between schools and parents is critical to improving learning outcomes for children. The chapter focuses on parental engagement in their children’s education in the early years of school. It considers issues of social and cultural capital as important to whether, or not, parents are involved in their children’s schooling. Analyses of data from a national representative sample of children and their families who participate in Growing up in Australia: The Longitudinal Study of Australian Children are presented. Results indicated that higher family socio-economic position was associated with higher levels of parental involvement and higher expectations about children’s future level of education.

The influence of families on early adolescent school connectedness : evidence that this association varies with adolescent involvement in peer drinking networks

School connectedness is central to the long term well-being of adolescents, and high quality parent-child relationships facilitate school connectedness. This study examined the extent to which family relationship quality is associated with the school connectedness of pre- and early teenagers, and how this association varies with adolescent involvement in peer drinking networks. The sample consisted of 7,372 10-14 year olds recruited from 231 schools in 30 Australian communities. Participants completed the Communities that Care youth survey. A multi-level model of school connectedness was used, with a random term for school-level variation. Key independent variables included family relationship quality, peer drinking networks, and school grade. Control variables included child gender, sensation seeking, depression, child alcohol use, parent education, and language spoken at home. For grade 6 students, the association of family relationship quality and school connectedness was lower when peer drinking networks were present, and this effect was nonsignificant for older (grade 8) students. Post hoc analyses indicated that the effect for family relationship quality on school connectedness was nonsignificant when adolescents in grade 6 reported that the majority of friends consumed alcohol. The results point to the importance of familyschool partnerships in early intervention and prevention.

Early school-based parent involvement, children’s self-regulated learning and academic achievement: An Australian longitudinal study

Parent involvement is widely accepted as being associated with children’s improved educational outcomes. However, the role of early school-based parent involvement is still being established. This study investigated the mediating role of self-regulated learning behaviors in the relationship between early school-based parent involvement and children’s academic achievement, using data from the Longitudinal Study of Australian Children (N = 2616). Family socioeconomic position, Aboriginal and Torres Strait Islander status, language background, child gender and cognitive competence, were controlled, as well home and community based parent involvement activity in order to derive a more confident interpretation of the results. Structural equation modeling analyses showed that children’s self-regulated learning behaviors fully mediated the relationships between school-based parent involvement at Grade 1 and children’s reading achievement at Grade 3. Importantly, these relationships were evident for children across all socio-economic backgrounds. Although there was no direct relationship between parent involvement at Grade 1 and numeracy achievement at Grade 3, parent involvement was indirectly associated with higher children’s numeracy achievement through children’s self-regulation of learning behaviors, though this relationship was stronger for children from middle and higher socio-economic backgrounds. Implications for policy and practice are discussed, and further research recommended.

User-designer collaboration during the early stage of the product development process

As an understanding of users' tacit knowledge and latent needs embedded in user experience has played a critical role in product development, users’ direct involvement in design has become a necessary part of the design process. Various ways of accessing users' tacit knowledge and latent needs have been explored in the field of user-centred design, participatory design, and design for experiencing. User-designer collaboration has been used unconsciously by traditional designers to facilitate the transfer of users' tacit knowledge and to elicit new knowledge. However, what makes user-designer collaboration an effective strategy has rarely been reported on or explored. Therefore, interaction patterns between the users and the designers in three industry-supported user involvement cases were studied. In order to develop a coding system, collaboration was defined as a set of coordinated and joint problem solving activities, measured by the elicitation of new knowledge from collaboration. The analysis of interaction patterns in the user involvement cases revealed that allowing users to challenge or modify their contextual experiences facilitates the transfer of knowledge and new knowledge generation. It was concluded that users can be more effectively integrated into the product development process by employing collaboration strategies to intensify the depth of user involvement.

Torres Strait Islander parents’ involvement in their children’s mathematics learning : a discussion paper

This paper is a beginning point for discussing what the literature states about parents’ involvement in their children’s mathematics education. Where possible it will focus on Torres Strait Islander Peoples. Little is known about how Torres Strait Islander parents approach their children’s learning of mathematics and how important early mathematics is to mothers. What is known is that is they are keen for their children to receive an education that provides them with opportunities for their present and future lives. However, gaining access to education is challenging given that the language of instruction in schools is written to English conventions, decontextualised and disconnected from the students’ culture, community and home language. This paper discusses some of the issues raised in the literature about what parents are confronted with when making decisions about their children’s education.

Torres Strait Island parents' involvement in their children's mathematics learning : a discussion paper

This paper is a beginning point for discussing what the literature states about parents’ involvement in their children’s mathematics education. Where possible it will focus on Torres Strait Islander Peoples. Little is known about how Torres Strait Islander parents approach their children’s learning of mathematics and how important early mathematics is to mothers. What is known is that is they are keen for their children to receive an education that provides them with opportunities for their present and future lives. However, gaining access to education is challenging given that the language of instruction in schools is written to English conventions, decontextualised and disconnected from the students’ culture, community and home language. This paper discusses some of the issues raised in the literature about what parents are confronted with when making decisions about their children’s education.

User-designer collaboration during the early stage of the design process

As user involvement becomes a necessary part of the product development process, various ways of accessing users' latent needs have been developed and studied. Reviews of literatures in user involvement and product development have revealed that accessing users' latent needs and transferring them into design process could be facilitated by effectively implementing user-designer collaboration during the early stage of the design process. In this paper, various types of user-designer collaboration were observed and then distinct characteristics of user-designer collaboration were classified into three categories. 1) Passive objectivity, 2) workplace democratisation, and 3) shared contexts were observed as strategies for better user-designer collaboration, which have been employed in the area of user-centred design, user participatory design and design for experiencing. Based on the literature review, this paper proposed a basic collaboration mechanism between the users and the designers during the early stage of the design process and then discussed how its mechanism will help to describe the interactions between the users and the designers during the user involvement sessions.

Healthy children, healthy planet : the case for transformative education in schools and early childhood from an Australian perspective

Climate change is an urgent global public health issue with substantial predicted impacts in the coming decades. Concurrently, global burden of disease studies highlight problems such as obesity, mental health problems and a range of other chronic diseases, many of which have origins in childhood. There is a unique opportunity to engage children in both health promotion and education for sustainability during their school years to help ameliorate both environmental and health issues. Evidence exists for the most effective ways to do this, through education that is empowering, action orientated and relevant to children’s day to day interests and concerns, and by tailoring such education to different educational sectors. The aim of this discussion paper is to argue the case for sustainability education in schools that links with health promotion and that adopts a practical approach to engaging children in these important public health and environmental issues. We describe two internationally implemented whole-school reform movements, Health Promoting Schools (HPS) and Sustainable Schools (SS) which seek to operationalise transformative educational processes. Drawing on international evidence and Australian case examples, we contend that children’s active involvement in such processes is not only educationally engaging and rewarding, it also contributes to human and environmental resilience and health. Further, school settings can play an important ecological public health role, incubating and amplifying the socially transformative changes urgently required to create pathways to healthy, just and sustainable human futures, on a viable planet.