Aligning project stakeholder motivation through incentivisation : a client-driven approach

The use of appropriate financial incentives within construction projects can contribute to strong alignment of project stakeholder motivation with project goals. However, effective incentive system design can be a challenging task and takes skillful planning by client managers in the early stages of a project. In response to a lack of information currently available to construction clients in this area, this paper explores the features of a successful incentive system and identifies key learnings for client managers to consider when designing incentives. Our findings, based on data from a large Australian case study, suggest that key stakeholders place greater emphasis on the project management processes that support incentives than on the incentive itself. Further, contractors need adequate time and information to accurately estimate construction costs prior to their tender price submission to ensure cost-focused incentive goals remain achievable. Thus, client managers should be designing incentives as part of a supportive procurement strategy to maximize project stakeholder motivation and prevent goal misalignment.

Innovation in construction : a case study of the Australian context

The dominant economic paradigm currently guiding industry policy making in Australia and much of the rest of the world is the neoclassical approach. Although neoclassical theories acknowledge that growth is driven by innovation, such innovation is exogenous to their standard models and hence often not explored. Instead the focus is on the allocation of scarce resources, where innovation is perceived as an external shock to the system. Indeed, analysis of innovation is largely undertaken by other disciplines, such as evolutionary economics and institutional economics. As more has become known about innovation processes, linear models, based on research and development or market demand, have been replaced by more complex interactive models which emphasise the existence of feedback loops between the actors and activities involved in the commercialisation of ideas (Manley 2003). Currently dominant among these approaches is the national or sectoral innovation system model (Breschi and Malerba 2000; Nelson 1993), which is based on the notion of increasingly open innovation systems (Chesbrough, Vanhaverbeke, and West 2008). This chapter reports on the ‘BRITE Survey’ funded by the Cooperative Research Centre for Construction Innovation which investigated the open sectoral innovation system operating in the Australian construction industry. The BRITE Survey was undertaken in 2004 and it is the largest construction innovation survey ever conducted in Australia. The results reported here give an indication of how construction innovation processes operate, as an example that should be of interest to international audiences interested in construction economics. The questionnaire was based on a broad range of indicators recommended in the OECD’s Community Innovation Survey guidelines (OECD/Eurostat 2005). Although the ABS has recently begun to undertake regular innovation surveys that include the construction industry (2006), they employ a very narrow definition of the industry and only collect very basic data compared to that provided by the BRITE Survey, which is presented in this chapter. The term ‘innovation’ is defined here as a new or significantly improved technology or organisational practice, based broadly on OECD definitions (OECD/Eurostat 2005). Innovation may be technological or organisational in nature and it may be new to the world, or just new to the industry or the business concerned. The definition thus includes the simple adoption of existing technological and organisational advancements. The survey collected information about respondents’ perceptions of innovation determinants in the industry, comprising various aspects of business strategy and business environment. It builds on a pilot innovation survey undertaken by PricewaterhouseCoopers (PWC) for the Australian Construction Industry Forum on behalf of the Australian Commonwealth Department of Industry Tourism and Resources, in 2001 (PWC 2002). The survey responds to an identified need within the Australian construction industry to have accurate and timely innovation data upon which to base effective management strategies and public policies (Focus Group 2004).

Sustainability performance of construction : conceptual models of satisfaction levels in construction projects

In general, the performance of construction projects, including their sustainability performance, does not meet optimal expectations. One aspect of this is the performance of the participants who are independent and make a significance impact on overall project outcomes. Of these participants, the client is traditionally the owner of the project, the architect or engineer is engaged as the lead designer and a contractor is selected to construct the facilities. Generally, the performance of the participants is gauged by considering three main factors, namely, time, cost and quality. As the level of satisfaction is a subjective issue, it is rarely used in the performance evaluation of construction work. Recently, various approaches to the measurement of satisfaction have been made in an attempt to determine the performance of construction project outcomes - for instance, client satisfaction, customer satisfaction, contractor satisfaction, occupant satisfaction and home buyer satisfaction. These not only identify the performance of the construction project but are also used to improve and maintain relationships. In addition, these assessments are necessary for the continuous improvement and enhanced cooperation of participants. The measurement of satisfaction levels primarily involves expectations and perceptions. An expectation can be regarded as a comparative standard of different needs, motives and beliefs, while a perception is a subjective interpretation that is influenced by moods, experiences and values. This suggests that the disparity between perceptions and expectations may possibly be used to represent different levels of satisfaction. However, this concept is rather new and in need of further investigation. This chapter examines the methods commonly practised in measuring satisfaction levels today and the advantages of promoting these methods. The results provide a preliminary review of the advantages of satisfaction measurement in the construction industry and recommendations are made concerning the most appropriate methods to use in identifying the performance of project outcomes.

Public participation, values and interests in the procurement of infrastructure projects in Australia : a review and future research direction

In many countries, the main providers for major infrastructure projects are government or public agencies. Public infrastructure projects includes economic and social infrastructure such as transportation, education and health facilities. Most decision-making models for delivery of public infrastructure projects are heavily weighted towards financial/economic factors. In Australia, public participation is an essential instrument in the procurement of infrastructure and development within Australia. This study reviews the public participation, values and interests in the procurement of infrastructure projects in Australia, and identifies the research direction in this research area in order to improve the decision-making models that capture stakeholder social, economical and environmental concerns in infrastructure projects.

Inhibitors to optimal project portfolio selection

The selection of projects and programs of work is a key function of both public and private sector organisations. Ideally, projects and programs that are selected to be undertaken are consistent with strategic objectives for the organisation; will provide value for money and return on investment; will be adequately resourced and prioritised; will not compete with general operations for resources and not restrict the ability of operations to provide income to the organisation; will match the capacity and capability of the organisation to deliver; and will produce outputs that are willingly accepted by end users and customers. Unfortunately,this is not always the case. Possible inhibitors to optimal project portfolio selection include: processes that are inconsistent with the needs of the organisation; reluctance to use an approach that may not produce predetermined preferences; loss of control and perceived decision making power; reliance on quantitative methods rather than qualitative methods for justification; ineffective project and program sponsorship; unclear project governance, processes and linkage to business strategies; ignorance, taboos and perceived effectiveness; inadequate education and training about the processes and their importance.

Asset identification : addressing the climate change in public asset management process

Climate change is becoming increasingly apparent that is largely caused by human activities such as asset management processes, from planning to disposal, of property and infrastructure. One essential component of asset management process is asset identification. The aims of the study are to identify the information needed in asset identification and inventory as one of public asset management process in addressing the climate change issue; and to examine its deliverability in developing countries’ local governments. In order to achieve its aims, this study employs a case study in Indonesia. This study only discusses one medium size provincial government in Indonesia. The information is gathered through interviews of the local government representatives in South Sulawesi Province, Indonesia and document analysis provided by interview participants. The study found that for local government, improving the system in managing their assets is one of emerging biggest challenge. Having the right information in the right place and at the right time are critical factors in response to this challenge. Therefore, asset identification as the frontline step in public asset management system is holding an important and critical role. Furthermore, an asset identification system should be developed to support the mainstream of adaptation to climate change vulnerability and to help local government officers to be environmentally sensitive. Finally, findings from this study provide useful input for the policy makers, scholars and asset management practitioners to develop an asset inventory system as a part of public asset management process in addressing the climate change.

The application of public asset management in Indonesian local government : a case study in South Sulawesi Province

Purpose To identify the challenges faced by local government in Indonesia when adopting a Public Asset Management Framework. Design A Case Study in South Sulawesi Provincial Government was used as the approach to achieving the research objective. The case study involved two data collection techniques - interviews and document analysis. Findings The result of the study indicates there are significant challenges that the Indonesian local government need to manage when adopting a public asset management framework. Those challenges are: absence of an institutional and legal framework to support the asset management application; non-profit principle of public assets; multiple jurisdictions involved in the public asset management processes; the complexity of local government objectives; unavailability of data for managing public property; and limited human resources. Research Limitation This research is limited to one case study. It is a preliminary study from larger research that uses multiple case studies. The main research also investigates opportunities for local government by adopting and implementing public asset management. Originality/Value Findings from this study provide useful input for the policy makers, academics and asset management practitioners in Indonesia to establish a public asset management framework resulting in efficient and effective organizations, as well as an increase of public services quality. This study has a potential application for other developing countries.

Conceptual models of satisfaction level in construction

It is recognized that, in general, the performance of construction projects does not meet optimal expectations. One aspect of this is the performance of each participant, which is interdependent and makes a significance impact on overall project outcomes. Of these, the client is traditionally the owner of the project, the architect or engineer is engaged as the lead designer and a contractor is selected to construct the facilities. Generally, the performance of the participants is gauged by considering three main factors, namely time, cost and quality. As the level of satisfaction is a subjective measurement, it is rarely used in the performance evaluation of construction work. Recently, various approaches to the measurement of satisfaction have been made in attempting to determine the performance of construction project outcomes – for instance client satisfaction, consultant satisfaction, contractor satisfaction, customer satisfaction and home buyer satisfaction. These not only identify the performance of the construction project, but are also used to improve and maintain relationships. In addition, these assessments are necessary for continuous improvement and enhanced cooperation between participants. The measurement of satisfaction levels primarily involves expectations and perceptions. An expectation can be regarded as a comparison standard of different needs, motives and beliefs, while a perception is a subjective interpretation that is influenced by moods, experiences and values. This suggests that the disparity between perceptions and expectations may be used to represent different levels of satisfaction. However, this concept is rather new and in need of further investigation. This paper examines the current methods commonly practiced in measuring satisfaction level and the advantages of promoting these methods. The results provided are a preliminary review of the advantages of satisfaction measurement in the construction industry and recommendations are made concerning the most appropriate methods for use in identifying the performance of project outcomes.

A conceptual framework for ethical decision making in project procurement

There is a lack of research which identifies the role of the public-sector client in relation to ethical practice in plan procurement. This paper discusses a conceptual framework for ethical decision making in project procurement, focusing on public sector clients within the Malaysian construction industry. A framework is proposed to ensure that effective ethical decision making strategies are deployed to ensure that plan procurement is carried out with a transparent process so that the public sector clients are able to adopt. The conceptual framework adopts various factors that contribute to ethical decision making at the early stage of procurement and consists of the procurement system, individual factors, project characteristics, and organizational culture as the internal factors and professional code of conduct and government policies as the external factors. This framework rationalizes the relationships between systems, psychology and organizational theory to form an innovative understanding of making ethical decisions in plan procurement. It is expected that this proposed framework will be useful as a foundation for identifying the factors that contribute to ethical decision making focusing on the planning stage of procurement process.

Towards a relational contracting framework in the Australian construction industry : an initial framework

The Australian construction industry is characterized as being a competitive and risky business environment due to lack of cooperation, insufficient trust, ineffective communication and adversarial relationships which are likely lead to poor project performance. Relational contracting (RC) is advocated by literature as an innovative approach to improve the procurement process in the construction industry. Various studies have collectively added to the current knowledge of known RC norms, but there seem to be little effort on investigating the determinants of RC and its impact on project outcomes. In such circumstances, there is lack of evidence and explanation on the manner on how these issues lead to different performance. Simultaneously, the New Engineering Contract (NEC) that embraced the concept of RC is seen as a modern way of contracting and also considered as one of the best approaches to the perennial problem of improving adversarial relationships within the industry. The reality of practice of RC in Australia is investigated through the lens of the NEC. A synthesis of literature views on the concept, processes and tools of RC is first conducted to develop the framework of RC. A case study approach is proposed for an in-depth analysis to explore the critical issues addressed by RC in relation to project performance. Understanding the realities of RC will assist stakeholders in the construction industry with their investment in RC.

Object identification based on 3D spatial models of construction sites

On obstacle-cluttered construction sites, understanding the motion characteristics of objects is important for anticipating collisions and preventing accidents. This study investigates algorithms for object identification applications that can be used by heavy equipment operators to effectively monitor congested local environment. The proposed framework contains algorithms for three-dimensional spatial modeling and image matching that are based on 3D images scanned by a high-frame rate range sensor. The preliminary results show that an occupancy grid spatial modeling algorithm can successfully build the most pertinent spatial information, and that an image matching algorithm is best able to identify which objects are in the scanned scene.

Extending constructability concept to include operation and maintenance issues

The concept of constructability uses integration art of individual functions through a valuable and timely construction inputs into planning and design development stages. It results in significant savings in cost and time needed to finalize infrastructure projects. However, available constructability principles, developed by CII Australia (1993), do not cover Operation and Maintenance (O&M) phases of projects, whilst major cost and time in multifaceted infrastructure projects are spent in post-occupancy stages. This paper discusses the need to extend the constructability concept by examining current O&M issues in the provision of multifaceted building projects. It highlights available O&M problems and shortcomings of building projects, as well as their causes and reasons in different categories. This initial categorization is an efficient start point for testing probable present O&M issues in various cases of complex infrastructure building projects. This preliminary categorization serve as a benchmark to develop an extended constructability model that considers the whole project life cycle phases rather than a specific phase. It anticipates that the development of an extended constructability model can reduce significant number of reworks, mistakes, extra costs and time wasted during delivery stages of multifaceted building projects.

Capability for infrastructure asset capacity management

Infrastructure capacity management is the process of ensuring optimal provision of infrastructure assets to support business operations. Effectiveness in this process will enable infrastructure asset owners and its stakeholders to receive full value on their investment. Management research has shown that an organisation can only achieve business value when it has the right capabilities. This paradigm can also be applied to infrastructure capacity management. With competing needs for limited organisation resources, the challenge for infrastructure organisations is to identify and invest their limited resources to develop the right capabilities in the management of their infrastructure capacity. Using a multiple case study approach, the challenges faced in the management of infrastructure asset capacity and the approaches that can be adopted to overcome these challenges were explored. Conceptualising the approaches adopted by the case participants, the findings suggest that infrastructure organisations must strengthen their stakeholder connectivity capability in order to effectively manage the capacity of their infrastructure assets.

Automated object identification using optical video cameras on construction sites

Visual recording devices such as video cameras, CCTVs, or webcams have been broadly used to facilitate work progress or safety monitoring on construction sites. Without human intervention, however, both real-time reasoning about captured scenes and interpretation of recorded images are challenging tasks. This article presents an exploratory method for automated object identification using standard video cameras on construction sites. The proposed method supports real-time detection and classification of mobile heavy equipment and workers. The background subtraction algorithm extracts motion pixels from an image sequence, the pixels are then grouped into regions to represent moving objects, and finally the regions are identified as a certain object using classifiers. For evaluating the method, the formulated computer-aided process was implemented on actual construction sites, and promising results were obtained. This article is expected to contribute to future applications of automated monitoring systems of work zone safety or productivity.

Image-based safety assessment : automated spatial safety risk identification of earthmoving and surface mining activities

This paper presents an automated image‐based safety assessment method for earthmoving and surface mining activities. The literature review revealed the possible causes of accidents on earthmoving operations, investigated the spatial risk factors of these types of accident, and identified spatial data needs for automated safety assessment based on current safety regulations. Image‐based data collection devices and algorithms for safety assessment were then evaluated. Analysis methods and rules for monitoring safety violations were also discussed. The experimental results showed that the safety assessment method collected spatial data using stereo vision cameras, applied object identification and tracking algorithms, and finally utilized identified and tracked object information for safety decision making.