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ABSTRACT
There is a general concern of adopting incentive compensation plans to motivate employees effectively. The major focus is to ensure that risks and rewards are commensurably and fairly distributed among contracting parties to achieve specific project objectives. The paper assesses the how risks and rewards can be combined together in a compensation plan within the Nigerian construction industry. An exploratory sequential approach was adopted in the research survey. The research findings reveal the most critical risk factors as financial stability, contract conditions, environmental factors and bank interest rate. The most important factors in rewarding for the key performance indicators were identified as measurement and correction of works, reasonable claims of extension of time, minimize defects and response to incident rate. The study provides an insight on how to combine risks with rewards in an incentive compensation plan. The paper recommends that project practitioners should consider the use of incentive plan by incorporating risk factors to achieve efficiency in project delivery.
Disclosure statement
No potential conflict of interest was reported by the authors.