Impact of the Use of Financial Incentives on Project Delivery in Ghana.

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Financial inventive systems are mitigating measures that are neither against the contract nor obligatory, but the client does it to boost productivity. The usage of one or more of the existing incentive schemes to improve contractor’s performance and enhance timely completion of projects remains recommended for good practice in the Construction industry. However, projects in Ghana continue to face great challenges resulting in cost and time overruns and quality deficiencies. Although an appropriate use of incentive schemes on any given project is known to result in successful project performance (and vice versa), very little is known about the nature of this relationship from literature. Having persistently suffered a great deal of project failures over the years, the Ghanaian Construction Industry stands to benefit from detailed knowledge and understanding of how exactly financial incentives impact on project delivery. Stimulated by the depth of this information, this research aims at investigating the impact of the use of financial incentives on project delivery in Ghana. The methodological approach adopted for this research was the multi-method qualitative study, ie using either two or more qualitative techniques (interviews and archival records). The respondents of the research involved Consultant’s and Contractor’s team who executed the three cases selected from the Directorate of Physical Development and Estate Management (DPDEM) of the University of Cape Coast (UCC). With the aid of framework analysis, the collected data were analysed. The key findings of the research show that contractors’ access to credit is improved when clients and consultants grant them financial incentives which in turn boost their performance. It also motivates them at the various phases of the project life cycle. The distinct contribution to knowledge arising from this research includes the affirmation of the impact of financial incentives on project delivery. Hence, it is suggested that proper background checks (audited accounts, history of precious works, etc.) of the Contractor must be done before giving him any financial incentives and Stakeholders (Clients and consultants) must monitor the use of the incentive by the contactor. Implications for future research include assessment the risk factors in giving financial incentives and the effect of financial incentives on project delivery teams.
A Thesis submitted to the Department of Construction Technology and Management, College of Art and Built Environment in partial fulfillment of the requirement for the degree of MASTER OF PHILOSOPHY