Civil and Environmental Research www.iiste.org ISSN 2224-5790 (Paper) ISSN 2225-0514 (Online) Vol.7, No.8, 2015 81 Factors Affecting Performance of Incentive Schemes in the Construction Industry in Nigeria *Omotayo Olugbenga AINA David Abiodun ADESANYA Department of Building , Obafemi Awolowo University , Ile Ife, Nigeria. Abstract This study sought to empirically determine the factors that influence how incentive schemes induce construction industry workers to expend more efforts at work with a view to improving how the schemes are designed and implemented. The study was conducted with two sets of questionnaire administered on project managers on seventy one construction sites in Nigeria and five craftsmen on each of these sites. The respondents were required to rank twenty eight factors affecting incentive schemes on a five point Likert scale. The factors rated as high impacting by project managers were regular payment of bonus, clear work targets, site management input and performance measurement. The factors ranked high by craftsmen were quality of supervision, workers' involvement, regular payment of bonus and payout period. Achieving optimum performance of the incentive schemes would require harmonisation of the dissention in the views of management and craftsmen of construction firms. Keywords; incentive schemes, factors affecting incentives, management of construction firms, craftsmen of construction firms. Introduction One of the tools construction firms use to increase productivity of their workers and to mitigate threat of time overruns is incentive schemes. There is ample evidence that these schemes have successfully induced workers to higher productivity in various proportions where they have been applied. Thus making it an important device to the construction manager. (Schrader (1972), Edmonds (1976), Borcherding (1981), Maloney (1983), (Wahab (1983), Aina (2000), Fagbenle (2000) Ikpo et al(2004). Yet, despite the agreement over the significance of incentive schemes, it is still unclear which of the multiple factors that affect its operation induce workers to higher productivity. This arose mainly from insufficient appreciation and control of “motivation” which is the main bridge between applied incentives and workers productivity. Forces that affect motivation have direct effect on incentive schemes, the incentive schemes are designed to generate motivating forces. Olomolaiye (1991) had attributed the short lifespan of incentive schemes to low understanding of relationship between incentives and motivation. Steers and Porters (1991) also believed that there is complexity in work motivation, this is evident in the interaction of the forces among an individual, the job and the work environment that account for the level, direction and persistence of effort expended at work. Elsewhere, Pinder (1998) also explaining factors contained in motivation. He described work motivation as the set of forces, internal (individual needs and motives) and external (environmental forces), that initiate work-related behavior and determine its form, direction, intensity and duration. Olomolaiye(1989) had earlier described Pinder’s explanation of factors determining an individual’s motivation as being dependent on the genetic and formative environment. Since the construction industry offer a different formative environment, its knowledge is invariably a crucial determinant of the effect of the motivation programmes used in the industry. The behaviour of the genetic environment, though as dynamic as its formative counterpart, is largely accounted for by the conceptual and empirical motivation theories in general and construction based management literature. The formative environment is also important because most of the incentive schemes used in the construction industry were developed in the manufacturing and services industry selection and adaptation in the construction industry should therefore not be arbitrary. In addition, the effect of geographical and socio- economic settings on the behaviour of the motivating system is also part of the formative function. The importance of the environment on motivation systems is supported by research findings of Jones,(1964), Nave,(1972), Schrader,(1972),and Oxley,(1978), they showed that though the construction worker may have basic needs similar to that of all other workers the satisfaction of these needs is different because of the controlling environment. The environment of an applied incentive scheme consists of the factors within the internal and external surroundings of the incentive schemes. The obvious part of the administration of incentive schemes is the physical application of the incentive to the worker and the worker’s response of higher productivity; the implicit part of the process is the actual creation of the incentive itself and all the variables surrounding its maintenance. The consequence of creating and maintaining the incentive is that the incentive at the point of application is not the only input responsible for the higher productivity achieved by it, but that there are other inputs that worked with the incentive to effect the higher productivity, Belfield and Marsden(2003) agreed with this view, when they concluded in their study of brought to you by CORE View metadata, citation and similar papers at core.ac.uk provided by International Institute for Science, Technology and Education (IISTE): E-Journals