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Construction industry observers tout the use of financial incentives as promoters of motivation and commitment on projects. Yet, little empirical evidence exists concerning their effectiveness. What are the drivers of motivation on construction projects? The reasons that construction project participants are motivated to pursue voluntary incentive goals are examined through four Australian case studies. The results demonstrate the critical role played by project relationships and equitable contract conditions in promoting the effectiveness of financial incentives. In the context of a construction project, this study finds financial incentives to be less important to motivation and performance than relationship enhancement initiatives. This finding is unexpected and has implications for the design of project procurement strategies. These results suggest that if project clients ignore the importance of relationship quality between participants, the impact of any financial incentive will be compromised.

PurposeThe paper seeks to provide recommendations for construction clients who design and implement financial incentive mechanisms (FIMs) on projects.Design/methodology/approachFour 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.FindingsFIM design should incorporate: flexibility to modify goals and measurement procedures over time; multiple goals covering different project areas; distribution of rewards across all the key organisations 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 maximised through the following complementary procurement initiatives: equitable contract risk allocation; early contractor involvement in design; value‐driven tender selection; relationship workshops; and future work opportunities.Research limitations/implicationsThis paper provides practical recommendations to industry and hence does not emphasise theoretical aspects.Practical implicationsThe 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/valueIn 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 maximise outcomes. The study addresses this gap in the literature.

Construction industry activities, from material extraction to the end of the structure life, affect the environment negatively. For a sustainable construction process, economically, environmentally, and socially friendly practices are essential, and reverse logistics is one solution that can provide such an approach. In reverse logistics, obsolete products are reused in a new production, while reducing negative effects to the environment. In this study, we assess the current state of research on reverse logistics practices in the construction industry. The study presents a comparative data mining analysis, followed by a content analysis. The results show that the construction industry literature ignores the impact of reverse logistics practices on upstream construction activities. We argue that industry practitioners must take reverse logistics decisions in the early phases of the construction process by considering both upstream and end-of-life construction activities, and we recommend a reverse logistics decision framework for successful reverse logistics implementation. The findings of this research are significant for decision-makers in the industry. We urge that sustainable practices be employed in the industry. Furthermore, a quantitative analysis is suggested to strengthen the arguments made in this article.