Motivation and Integrated Project Delivery

One of my clients emailed me last month with this question:
We’re considering implementing a framework that applies not only to the different stakeholders on an IPD project, but it actually attempts to figure out gain share formulas down to the individuals who actually participated and worked on the project.
Does this sound like this can even work, at the individual level?
I provided an initial response, but have an update, now that I’ve been able to synthesize a number of motivation theories.

At Tocci, we discuss this topic quite a bit. Currently, we don’t offer any project-based bonuses – regardless of contract form. Anecdotally, we’ve seen that at financial bonuses hurt performance, rather than improve it. Recently, Daniel Pink’s Drive brought to my attention studies that similarly demonstrate that. Moreover, the reason the incentive pool motivates individual companies to work as team is it’s is shared risk and reward, not just shared reward.

While the discussion is still open, we have vetoed it on all projects to date. At the same time, we keep the question open. We think that we want to include individual team members in the incentive pool. However, we just want to motivate team members. The more relevant question is likely: how can we motivate individuals to perform in an IPD contract?

To answer that question, we need to explore practical theories of motivation, from Maslow to Herzberg to Vroom to Pink.

1943 Maslow: After the basics are covered, motivation comes from team, recognition and then achievement & stimulation
1959 Herzberg: Extrinsic factors (i.e. salary, conditions) prevent dissatisfaction; intrinsic factors (i.e. achievement, responsibility & growth) increase satisfaction
1964 Vroom: Motivation requires expectation that effort leads to a goal, which produces desirable results
2011 Pink: Motivation comes from mastery, autonomy and purpose

Note that each theory boils down to a similar basic principle: take care of the basics, create a sense of purpose and give teams the flexibility to achieve it. To apply these theories, channel each of these men and ask yourself:

  • §   First and foremost, have we covered the basics – salary, fringe benefits, comfortable and safe environment? [Maslow’s ‘Hygiene Needs” and Herzberg’s “Extrinsic factors”]
  • §  Is there opportunity to motivate the individuals on this project? More specifically, will their effort lead to the needed performance? Will their performance result in a desired result? Will the results increase their satisfaction? [Vroom] At the same time are there enough challenges in the project? Can individuals learn and grow [Pink and Mastery; Herzberg’s “Intrinsic Factors”]
  • §  The structure of IPD incentives team leadership to create an integrated team. Is our leadership doing enough to create a cohesive team environment? Is there more we could do? Have we included the team in creating the environment? [Maslow’s “Sense of Team”]
  • §  Construction projects tend to be ‘purposeful’ since there is a clear goal: a finished building. Have we communicated the budget, schedule and quality goals to the team? What about the more detail goals related to the profit pool? Have we aligned their tasks and work to individual goals? Are we communicating goal status to the team? [Pink and Purpose; Maslow’s “Achievement”]


Howard Ashcraft said...


Your comments on personal motivation are correct and sum the key research quite well. In general, money is not a good personal motivator.

This doesn't mean that pay is irrelevant. Pay inequities can be very demotivational, but once basic needs are fairly met, other factors are far more important, and the evidence even can be read that money, as a carrot, is counter-productive.

In IPD, you need to distinguish between corporate motivation and personal motivation. Shared risk and reward based on outcome, reduced liability, etc. are all reasons for companies to provide the personnel and resources to do these projects well. But once you have the right structure to allow good behavior, other factors take over. The IPD Teams paper (http://www.hansonbridgett.com/Publications/pdf/~/media/Files/Publications/IPD-Teams.ashx) was written to provide guidance on organizing IPD teams to be motivated and efficient.

There are also several practical problems with performance payment at an individual level. First, having performance pay on some projects, but not others, creates huge inequities within some firms. Second, unless you are gong to wait for a project to be completed, you run the risk of motivating behavior that may turn out to be counterproductive. This is a problem with behavioral metrics, in general. And as noted by you, the evidence is that it isn't very effective, anyway.

So, create a good work environment, treat people well, give them automony, and have them work on purposeful projects.

Howard Ashcraft said...
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