Two staged incentive contract focused on efficiency and innovation matching in critical chain project management
Abstract: The purpose of this
paper is to define the relative optimal incentive contract to effectively
encourage employees to improve work efficiency while actively implementing
innovative behavior.
Design/methodology/approach: This paper analyzes a two staged incentive
contract coordinated with efficiency and innovation in Critical Chain Project
Management using learning real options, based on principle-agent theory. The
situational experiment is used to analyze the validity of the basic model.
Finding: The two staged incentive scheme is more suitable for employees
to create and implement learning real options, which will throw themselves into
innovation process efficiently in Critical Chain Project Management. We prove
that the combination of tolerance for early failure and reward for long-term
success is effective in motivating innovation.
Research limitations/implications: We do not include the individual
characteristics of uncertain perception, which might affect the consistency of
external validity. The basic model and the experiment design need to improve.
Practical Implications: The project managers should pay closer attention
to early innovation behavior and monitoring feedback of competition time in the
implementation of Critical Chain Project Management.
Originality/value: The central contribution of this paper is the
theoretical and experimental analysis of incentive schemes for innovation in
Critical Chain Project Management using the principal-agent theory, to
encourage the completion of CCPM methods as well as imitative free-riding on
the creative ideas of other members in the team.
Author: Min Zhang, Maozhu Jin
Journal Code: jptindustrigg140083
