The project management aims at achieving objectives economically. It employs motivational tools to increase production and productivity. The art of motivating lies in creating environment, developing systems, and directing efforts in such a way that they meet the organizational goals as well as the needs of those participating in the process, with everyone working enthusiastically as one team under the leadership of the project manager.
The motivational approach, in general, can be divided into behavioural approach and financial incentive schemes. In a construction project the behavior motivational approach is essential to create a healthy work environment, while the financial incentive scheme benefits the participants in the following ways:

a)     It assists the project management in increasing production and productivity, without any appreciable increase in estimated costs, by curtailing supervision time, obtaining reliable feedback in progress of work and productivity, and exercising effective control on the employment of workers. The feedback also generates output information for planning and costing future works and improving incentive schemes.

b)    It helps workers in increasing their earnings and gaining job satisfaction without affecting the estimated costs of work. It also encourages workers to develop better methods of working.


In the construction industry, many financial incentives schemes have been developed to motivate workers. These vary with the type of project, nature of task and employment teams of workers. Broadly, the financial incentive schemes can be divided in the following categories:

·        Time-related schemes

Employee is paid according to the overtime worked in proportion to the basic hourly wages.

·        Job-related schemes

Employee is paid according to the measurable job completed.

·        Lump-sum work payment

1.     Employee is paid according to: scheme
2.     Time saved from standard time fixed for completing the job.
3.     A lump-sum amount paid for completing the fixed quantity of a specified job.

·        Profit sharing bonus

These can be paid as bonus after a predetermined time, say, quarterly, half-yearly or yearly.


The basis of financial incentive schemes is the setting of attainable output target rates for time or task. Generally, for direct workers, these output targets are derived from the productivity standards. For indirect manpower, the time employed and profit-sharing may be the only method of offering financial incentives.
Finalizing a financial incentive scheme for a given work is a difficult process. A scheme once agreed upon cannot be altered without concurrence of the parties concerned. The following guidelines can help in designing a financial incentive scheme for the direct workers. The scheme should be:

a)     Attainable enough, so that the workers find prospects of higher earning than their guaranteed minimum wages.

b)    Simple enough, so that the workers can easily comprehend it.

c)     Specific enough, so that the output can be measured without any controversy.

d)    Concise enough, so that the unforeseen and unavoidable holdups in progressing works can be easily determined and workers compensated for the time wasted during execution.

e)     Supervised enough, so that work progresses smoothly as per standard engineering practices and quality specifications.

f)      Comprehensive enough, so that all the statutory requirements are fulfilled.

An incentive scheme needs to be designed carefully. It is difficult to sell to workers. It faces teething problems during implementation. Once implemented, it cannot be altered without concurrence of the affected workers. With all its drawbacks, however, an incentive scheme is still necessary to induce the workers to give their best. In conclusion, it can said that workers work harder if there is a financial reward linked to their performance, and the management saves upon time and costs if it properly implemented.