Category Archives: the Why

Why you would consider using a PBC and more importantly when you would not.

Carrot and Stick (Part 2)

In part 1 of this article we spoke about the 2 types of approaches to incentives; Approach 1 being negative incentives (stick) and Approach 2 being positive incentives (carrot). We also introduced a behaviour called loss aversion which describes how … Continue reading

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Understanding Behavioural Economics

In a previous post I had suggested those interested in Behavioural Economics should have a look at a free online course via http://www.edx.org titled Behavioural Economics in Action from the University of Toronto. While you can do this course at any … Continue reading

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Carrot and Stick (Part 1)

I am currently reading Richard Thaler’s new book, “Misbehaving – The making of Behavioural Economics” which has again brought up an interesting and long running debate on the application of positive incentives (gains or “carrots”) or negative incentives (losses or … Continue reading

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Benefits of a Performance Based Contract

A common Performance Based Contract (PBC) question is what benefits do they offer over more conventional / traditional contracts? While there is a lot of discussion on this topic, most is based on anecdotal evidence.  The lack of evidence is due to PBC success … Continue reading

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When to use a Performance Based Contract?

While advice has been written (see the United States Department of Defence Product Support Business Case Analysis (BCA) Guidebook) on when to use a Performance Based Contract (PBC) (or Performance Based Logistics (PBL) contract) my colleagues and I have recently … Continue reading

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Is Your Contract Fun?

Katherine Milkman, an associate professor at Wharton, University of Pennsylvania, starts her behavioural economics class with the following video. . Having watched this you may be wondering what this has to do with PBC? Let me explain. If you agree … Continue reading

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Understanding Behavioural Economics

Previously, I mentioned using Behavioural Economics as one technique to make sure that the Performance Management Framework (PMF) drives the desired behaviours. For those of you who want more information on this fascinating topic, can I suggest a free online … Continue reading

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So Why Use a PBC?

Extending on our simple description of Performance Based Contracting (PBC), a form of contracting that directly relates the delivery of the products or services to payment; we need to examine the 3 key differences between a PBC and traditional contracts: … Continue reading

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The Why, the What and the How

As part of this blog I intend to cover the Why, the What and the How of Performance Based Contracting (PBC). So what do I mean by these 3 terms? the Why – using this term I want to discuss … Continue reading

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