Financial-Based Incentive Plan to Reduce Construction Waste

Abstract

Construction materials wastage has always been a problem in construction projects. This study was conducted to address a long-standing debate in the area of construction waste reduction: financially incentivizing or penalizing during construction. After a questionnaire survey, it was found that construction industry experts prefer financial-based incentive plans to levying. Accordingly, a financial-based incentive plan was developed based on guidelines elicited from comments of the respondents, content analysis, and plugging gaps of previous incentive-based plans. In this plan, the stakeholders are incentivized to save money by reducing quantities of purchased materials, wasted materials, landfilled wastes, and illegally dumped wastes. The saving is to be shared among the stakeholders. To investigate the plan’s usefulness, the plan was applied to a real construction project through which its serviceability was confirmed. The results of this study uncovered that incentivizing provides better results compared to penalizing in construction waste reduction. The main explanation for this observation is that incentivizing promotes ethics, is more efficient, and is more compatible with sustainable development goals. In addition, viability and on-site waste reduction via promoting professional ethics and motivating stakeholders are determined to be key factors of a successful financial-based incentive plan. In summary, this paper contributes to the construction engineering and management, built environment, and sustainable construction global communities by comparing incentive-based and penalty-based construction waste reduction schemes; providing evidence of preference for incentivizing by enumerating its advantages over penalizing; and finally, introducing professional ethics and personal motivation as two important factors in significant construction waste reduction as well as sustainable building materials management. This is accomplished by basing the design of a reward plan on motivating project stakeholders and developers that is focused on detailed net benefit calculation being applicable to construction projects regardless of their type, geographic location, and kind of construction waste they generate.