A complexity framework for construction incentivization planning

Purpose Planning incentivization to boost project performances is one of the challenging responsibilities of project managers. Unilaterally imposed outcome-based incentives typify the incentivization arrangements in development projects. Moreover, failure to bring about the anticipated outcomes is not uncommon notwithstanding the use of conventional forms of incentives like financial ones. This study argues the need to extend beyond conventional carrot-and-stick approaches and examines how incentivization strategies can be better planned to enhance project performance. Design/methodology/approach A critical review and synthesis of the body of knowledge incorporating principal-agent theory, the concept of reciprocity and construction incentivization literature along with the intrinsic and extrinsic motivators is used to develop the framework. Findings The findings suggest that incentivization strategies that embrace reciprocity and align with project complexities are more likely to achieve desired outcomes. A framework is developed to guide the planning of incentivization in construction projects. Four key recommendations underpin the proposed planning framework: (1) extrinsic motivators are effective when the dynamic complexity of the project is low; (2) intrinsic motivators are effective when the dynamic complexity is high; (3) a crowding-in environment should be fostered when both extrinsic and intrinsic motivators are employed and (4) organizational incentivization is most effective when the structural complexity of the project is high. Originality/value This study provides a novel perspective on incentivization planning in construction by advocating for a nuanced approach that considers both extrinsic and intrinsic motivators. It offers practical guidance for project managers to tailor incentivization strategies according to project complexity.