Research On The Impact Of IPD Incentive Mechanism On Project Team Performance

The use of incentives has been seen as an important way of facilitating the successful implementation of IPD. A sharing of risk and reward, as the compensation method of IPD, is used to incentivize collaboration, aligns the individual goals with team goals. To achieve optimal team effectiveness and project outcome, it is still a big challenge to design an effective incentive mechanism for IPD. This study explores the impact of the incentive mec hanism on team project from the perspectives of incentive target setting and gain/loss sharing.It is the precondition of this study to evaluate project performance of IPD. The initial performance indicators set is established from two dimensions of result performance and relationship performance through analyzing t he related literature. This study establishes the key performance index system for IPD using the Delphi survey technique.This study discusses the relationship between the incentive mechanism and project outcome from the perspectives of incentive target setting and gain/loss sharing, based on the existing research about IPD incentive compensation model. Different from existing IPD incentive compensation model, this study proposes the incentive compensation model based on multiple performance factors, compares the effect of multiple goal incentive and single goal incentive on IPD project performance, and discusses the intermediary role of goal commitment. The results show that multiple goal incentive is more reasonable than single goal incentive. It not only can encourage participants to improve project noncost performance, but also increase the chance of participants to achieve project goals, and then improve the project overall performance. In terms of the gain/loss sharing, this study proposes to distribute the gain/loss based on risk perception, and discusses the relationships of risk perception-oriented distribution, team justice and team performance. The results show that this distribution rule not only compensates participants for taking risk, but also allows participants jointly develope and validate incentive mechanism. It makes the profit distribution process more transparent, strengthens team justice, and improves team effectiveness.Although sharing gain/loss based on risk perception can improve IPD project performance, this study need further explore that how risk perception as the key factor to impact gain/loss distribution. Considering relational risk and performance risk, this study explores the impact of social capital and individual cognition on participants’ risk perception and the gain/loss distribution.