Working as a Successful Partnering Team
Incentives are used as a means of improving performance and outcomes, such as customer satisfaction. They do not always involve money and may be focused on continuing opportunities for business, such as long term partnering arrangements.
Procurement should include provision for the use of incentives within clear policy guidelines and frameworks. Contractors can be encouraged to make specific proposals for incentivisation at the bidding stage on the basis of their intimate knowledge of work planning and processes.
It is acceptable to reward contractors where they can bring added value and they can play a big role in achieving quality work and high levels of customer satisfaction, especially where major internal works are being carried out within homes. This does not mean that contractors or suppliers get extra for doing what they are basically contracted to do, but for exceeding these targets - savings in overall budgets should not be seen as incentives to be shared if the scope or standard of work is simply reduced.
Incentives can also involve sharing savings amongst the members of the supply chain, so increasing profits to contractors and suppliers, based on pre-agreed proportions. Alternatively, savings can be used by the client to commission additional work from the partnering team, which will again increase the profitability of the supply chain.
Incentive schemes can also operate negatively by sharing the costs of unforeseen risks or problems which arrise.
Barriers to change can be overcome by:
- Incentivisation schemes or frameworks should be set out in advance and agreed with audit, finance and legal staff before being accepted for implementation
- Training, guidance and support on incentives can be transparent and used is needed to overcome traditional suspicions amongst social housing clients.
Examples:
Barnsley Metropolitan Borough Council
Barnsley Metropolitan Borough Council set up the process of performance indicators within its detailed financial arrangements.
Broomleigh Housing Association
Broomleigh Housing Association linked their profit levels to performance as the key to their incentive package.
Portsmouth City Council
Portsmouth City Council devised a pain/ gain share mechanism.
Users can access further help using this link to a list of additional websites, literature and toolkits. This list is also available as you use the toolkit from each of the main section pages.