• You are the head of the Project Management Office for Deep Sea Construction, Inc., a contractor that works with energy and oil exploration companies.  Deep Sea has just been awarded a large contract for the construction of an offshore wind energy farm.  In connection with the project you are in the process of hiring ten deep sea divers with expertise in deep-sea welding for offshore wind turbines.
  • Assigned Tasks:
    • The ten divers will be responsible for installing ten support columns
    • Each diver is responsible for one of the columns.
      • However, each diver is expected to assist other divers with the construction of their columns.
    • A large part of the divers' duties will involve deep sea welding and handling of electrical cables.  For the dangers involved see 6 Shocking Underwater Welding Dangers & Powerful Safety Solutions Download 6 Shocking Underwater Welding Dangers & Powerful Safety Solutions
• The legal team has just sent to you a draft of the proposed employment contract which each of the divers will have to sign.
  • The Incentive Compensation and Injury Compensation provisions in the contract provide as follows:

Incentive Compensation.  Each Diver will be paid a $75,000 salary.  Two of the Divers will also receive a bonus.  The Diver who completes their column first will receive a $100,000 bonus. The Diver who completes their column second will receive a $25,000 bonus. The other Divers will receive no bonus.

Injury Compensation. Divers who suffer an injury while performing the Assigned Tasks shall be fully indemnified for any medical costs incurred, including costs of hospitalization and rehabilitation.

Questions:

• Do the Incentive Compensation and Injury Compensation provisions provide the right types of incentives to divers vis-à-vis the following?
  • Completing the Assigned Tasks in a timely fashion.
  • Completing the Assigned Task properly in order to avoid defective construction of the columns. This requires taking the time to assure that the work is completed fully in accordance to underwater welding and construction standards.
  • Avoiding injuries
  • Working together as a project team
• What changes would you make to the proposed contract provisions?

Answer rating: 100% (QA)

Analyzing the Incentive Compensation and Injury Compensation provisions in the context of the divers tasks and objectives as well as their role in the ... View the full answer