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Does Your Contract Contain a “Termination for Convenience Clause?”

posted May 26, 2011, 12:17 AM by Administrator 1   [ updated May 26, 2011, 12:35 AM ]

Most construction Contracts include provisions for termination of the Contractor’s remaining work on a project, under certain pre-defined conditions.  Usually these clauses are included by the Owner wherein he defines the specific events under which he would be permitted to expel the Contractor from the project and so therefore prevent the Contractor from completing his scope of work.  Termination under these specific circumstances constitutes “termination for cause”.  This defines what will be sufficient cause for the Owner to terminate the Contract, and also details the rights that the Contractor has under the Contract by means of which he can cure such a default.

 

Many Contracts also include a clause permitting the Owner (or Primary Contractor) to terminate the Contractor’s residual work at the Owner’s convenience.  Notably, such a termination is not as a result of any error on the part of the Contractor. 

 

“Termination for convenience” clauses are stated to give the Owner the option to terminate the remaining balance of the contracted for work for a reason other than the default of the Contractor.  If the Owner, for instance, is unable to obtain finance to complete the work, he may terminate the balance of the work for convenience – provided such a termination for convenience clause is stated in the Contract.  Thus, if the Contract does not contain such a termination for convenience clause, and the Owner does terminate for convenience, the Contractor would be entitled to the value of the work completed plus the profit he would have earned on the balance of the Contract. 

 

It must be noted that an Owner can also delete all or a portion of the balance of the remaining scope of work from the Contractor.  If an Owner makes such a deletion before or during the performance of the Contract, the Contractor must be alert to carefully evaluate the Contract to establish what his rights and responsibilities might be in the given circumstance.

 

Termination for Convenience Clause Specified

 

The following wording and terminology would normally be stated in a the Contract clause:

 

Owner may at any time and for any reason terminate the Contractor’s services and work at the Owner’s convenience.  Upon receipt of such notice, the Contractor shall, unless the notice directs otherwise, immediately discontinue the work and placing of orders for material, facilities and supplies in connection with the performance of this Agreement.

 

Upon such termination, Contractor shall be entitled to payment only as follows: 

1)     The actual cost of the work completed in conformity with this Agreement; plus

2)     Such other costs actually incurred by Contractor as are permitted by the Prime Contract and approved by Owner; plus

3)     Ten percent (10%) of the cost of the work referred to in subparagraph (1) above for overhead and profit.  There shall be deducted from such sums as provided in this subparagraph the amount of any payments made to Contactor prior to the date of the termination of this Agreement.  Contractor shall not be entitled to any claim or claim of lien against Owner for any additional compensation or damages in the event of such termination and payment.

 

Certainly the Owner’s exercise of a termination for convenience clause can impact the Contractor’s Contract profit.  Hence, if the Owner terminates the Contract in this way, the Contractor will not earn the profit that he anticipated at the time when the Contract was executed.

 

What is the Difference between the “Termination for Convenience” Clause and the “Termination for Cause” or The ‘Owner’s Deletion of the Balance of Work?”

 

A change order provision is usually incorporated in most Contracts.  These change order clauses allow for reductions or additions that could be made to the work as outlined in the Contract.  But, if the Owner of, for instance, of a public works project should attempt to delete all of the remainder of the work on a Contract and then award this to another Contractor, the Owner will be in breach of Contract.  The courts have, in cases such as these, held that such clauses were intended to further the Contract, and not to prevent completion. 

 

Do Restrictions Exist on the Use of a Termination for Convenience Clause?

 

An implied covenant of good faith and fairness exists in each Contract.   If a Termination for Convenience clause is exercised it could be argued that this was done in bad faith and that the termination may be a breach of Contract.  In order to avoid paying the balance of the profit on the remaining Contract work, if the Owner chose to exercise the Termination for Convenience clause when the project was about 90% complete, this could be viewed as a termination in bad faith and constitute a breach of Contract.

 

Conclusion

 

Government Contracts commonly include termination for Convenience clauses.  If such a clause is not included in the Contract, termination for anything less than cause might entitle the terminated Contractor to his share of lost profits for the project.    Increasingly, more and more private Contracts are also including such Termination for Convenience clauses.  If the Prime Contract contains such a clause, any related Subcontracts should also include a similar clause.  The amounts paid under the Subcontract termination for convenience clause should be complimentary with that the of the Prime Contract’s Termination for Convenience clause.

 

Sometimes an Owner might make use of the Terminate for Convenience clause rather than make use of the cause clauses.  Termination for Convenience might be used as a safety net if the Owner is not certain whether valid and sufficient grounds exist to terminate for cause.  Termination for Convenience in this manner could mean that the Owner avoids possible contention that the Termination for Cause was improper (if this was the route he chose).

 

It is therefore imperative that before executing a Subcontract, a Subcontractor must always review the termination clauses.  If the Subcontract does contain a clause that if a Termination for Cause is later determined to have been improperly executed, the termination automatically converts to a Termination for Convenience.  The Subcontractor should object to the clause. 


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Is it permissible under FIDIC Contracts to omit work from the Contractor and give it to another Contractor during the course of the project?

posted Apr 27, 2011, 3:17 AM by Administrator 1   [ updated Apr 27, 2011, 3:39 AM ]

Going by the Book


The position is clear in the Yellow, Silver and Gold Books wherein each states that 'A Variation shall not comprise the omission of any work which is to be carried out by others'. Although the wording in the Red Book is not as precise, it appears to be the clear objective.

If the work is included in the Contract and there are no defects in the Contractor’s work then there may not be any justifiable reasons to change. However, the role of the Engineer is key in determining any liability or defects and, of course, if a Variation is being proposed. This is discussed in section 13 of the Red Book.

It would appear that this provision is included in FIDIC to prevent the Employer/Engineer from awarding work to others, possibly because they could save money by doing so or because the Employer may have some or other family member or “connection” who could do it better/cheaper/quicker job. In this type of situation, many Employers/Engineers fail to realise that the Contractor is fully within his rights to bring a claim against him for loss of profit or costs incurred if such an action was taken.

Also, it depends on whether the COPA has made provisions for doing so. The standard FIDIC conditions does not contain any provisions that will allow the Employer/Engineer/SO from omitting work from one Contractor to give it another Contractor during the course of the project. Unless the COPA has incorporated provisions for doing so, and work is omitted from the Contractor, it would clearly be a breach of Contract.

It would, though, be prudent of the Employer, that even if such a course of action is open to him, to take care that he does not run foul of other common provisions. For example, in the Red Book, Clause 12.3, variations in price may be claimed if the reduction in scope causes a change in the quantities of materials of more that 10%, and so forth. Additionally, some Contracts may contain a provision where a change in the total Contract price beyond a certain percentage permits either party to renegotiate the Contract.

Hence, if the removal is not about cause but rather for the Employer’s convenience, then the Employer could most certainly expect a claim for loss of profit, overheads and so forth from the Contractor.

Notably, if the work being removed is of a specialist nature, this would then most likely be carried out by a Subcontractor. This could be negotiated with the Main Contractor. If he is unwilling, and there has been no provision for such an act in the special provisions in the Contract, it will be open to dispute.

Sub-Clause 13.1 (Right to Vary) of the Red Book says as follows: “Each Variation may include …. (d) omission of any work unless it is to be carried out by others”.

So now the question is, would the situation be different if the Contractor was in culpable delay (having submitted extension of time claims which have been rejected by the Engineer), and already running some months late, where the penalty has already reached the 10% limit? Would the Employer, who, for example, may have apartment owners threatening to claim their money back, then be justified in omitting Works from the Contractor and subsequently giving such Works to other Contractors to speed up the completion of the project and then hand over the apartments to disgruntled owners? In all likelihood, the answer would still be the same. It is a breach of Contract on the Employer’s side and the Contractor would still be entitled to claim his loss of profit on the omitted work. Doubtless, this would be set against the substantial claims that the Employer would have and, in any event, the Employer would likely argue that he would only be mitigating his losses. However, if the Contractor’s default is that bad, the Employer could terminate anyway - or use the threat of termination - to negotiate a commercial deal whereby the Employer would not terminate but could omit part of the Works and have them carried out by others without penalty.

Another recommendation may be to enforce acceleration measures by negotiating that the Main Contractor engage in nominating a Subcontractor. Minimum management fees could be paid, the Subcontractor could be paid directly and the Main Contractor could still be held fully responsible during the defects liability period. This could hopefully achieve an earlier occupation date with less resulting losses to the Client. There will, of course, be additional costs when a Subcontractor is nominated but the Client would have paid extra if he eliminated part of the Works (this would be a problematic scenario) and engaged another Contractor at the same time.

But, can the Employer partially terminate the Works? Unless this has been specifically written into the Contract, then under the Red Book alone it would appear that the Employer may only totally terminate the Contractor’s Contract.


When the Contractor is in the Wrong

If the Contractor has been negligent in performance due solely to reasons attributable to the Contractor, then termination is possible under the Red Book Clause 15 (the Silver Book appears to be the same).

All law jurisdictions require the omission to be genuine and if not, it would be a breach of Contract of an implied condition or under law. In common law countries, there is sufficient case law under "stare decisis" (a legal phrase referring to the obligation of courts to honour past precedents. Latin: stand by the decision) to make it a breach. In USA, it would possibly be covered under "Rules of Equity" (being a civil law jurisdiction). In UAE, it would be covered under Article 246 (1) of the Federal Law No: 5 of 1985 where "good faith" is an absolutely essential part of a Contract.

The situation must be considered where the Contractor fails in his Contractual obligations and the resulting actions which the Engineer may take in such circumstances. The Red Book contains provisions whereby the Engineer may award work to others in such cases until the expiry of the defects liability period, where Sub-Clause 11.4 (Failure to Remedy Defects) indicates that after providing notice to the Contractor, the Employer may carry out the work himself at the cost of the Contractor. Should the situation arise that action needs to be taken prior to this time, the Engineer must be very careful to ensure that the Contractor has been served notices and have been given a reasonable amount of time to rectify the situation prior to omitting the work from the Contractor and awarding to someone else.


The Middle East and Far East

In Islamic jurisdictions “good faith” is key in these courts. To omit work from a Contractor, even if there are provisions in the Contract, is viewed as “bad faith” and as such may be illegal under the law (although certainly not under the Contract, if those provisions were stated in the Contract).

Business in these regions is often done, not according to the written word, but is based on personal relationships and a concept of 'fairness' (not necessarily the Western understanding of this word) and compromise. The ideas of 'win/lose' and conclusive proofs are much less supported here than in the West.

Sometimes it is helpful if the parties have a common 'friend', possibly a sister company working with both parties or an external sponsor known to both), who can explain to each side the difficulties the other party is causing, and can promote a compromise.

The solution will most likely not be FIDIC one, but at least there may be a solution.


FIDIC, Arbitration and the Law

Proving whether the omission is a genuine act is a matter which can be determined readily at Arbitration by looking at the actual acts by Employer, and by interviewing witnesses, including those from the Employer. These facts can easily enough be produced during a trial or a hearing, whether at the time of “discovery” or by direction from the Arbitrator.

Often it is beneficial to look beyond the terms and conditions of the Contract to where the case can be stated under the laws or jurisdiction of the country for resolution or relief. Hence, it is possible to look to the law during the time of a dispute when the Contract does not provide the Clause to assist in resolving the dispute.

No Contract can overwrite what is provided under the written laws of a country, unless the provision allows for it. Therefore, if a Clause is permissible but not enforceable because it is in conflict with the written law of the country, it has no legal backup and is of no use.

All this having been taken into account, if there is a case of a defaulting Contractor, he should have already been served notices of default and notices to remedy the situation. If the Contractor does not remedy his default, he should be terminated. It is Contractually tidier and allows the Client greater room for maneuverability and is in the best interests of the Client and the property purchasers.

If extensions of time have been submitted and rejected by the Engineer under the older FIDIC forms, and the Engineer is acting impartially, then the issue probably would be legitimately clear-cut. Then it possibly would be best for another Contractor to be mobilised to complete any outstanding Works without major impact on time, cost or quality. However, if the Contract is under FIDIC 1999 then the Engineer's impartial role is not as clear-cut and the Contractor may argue that his extensions of time claims did or are not getting a fair hearing. Hence, the Engineers impartiality should be above question and the extension of time issues must be clearly dealt with.

Where the 10% penalty is being greatly exceeded, the civil courts will look beyond the FIDIC provisions and consider the actual losses being incurred.

Omission is not permissible within the FIDIC agreement and the case of Contractor default being the cause of failure to complete the Works would need be fairly clear-cut in the face of civil court 'good faith' provisions before the course of action of omission of Works should be considered.


Conclusion

  • The Employer, Engineer and Contractor must know the contents of the Contract and understand all implications and results due to actions or inactions. 
  • FIDIC does not permit omission. If this is being considered, proofs of preceding notifications to a negligent Contractor must be above reproach if an Employer does not want to be sued by the Contractor.

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FIDIC - Contractor's Responsibility after Suspension of Works

posted Apr 3, 2011, 9:17 PM by Administrator 1   [ updated Apr 4, 2011, 2:03 AM ]


Can a contractor decline any responsibility for the Temporary Works and Permanent Works after the Works have been suspended under sub-clause 16.1?


Although the answer will likely vary from jurisdiction to jurisdiction, the inherent principle has to do with safety. In this, the contractor/s are not released from their responsibilities.  The additional cost of carrying out and maintaining the works as a result of the suspension is reclaimable under Sub-clause 16.1 9(b).

Regardless of whether safety is of an immediate concern, the contractor should try to keep the costs arising from the suspension as low as possible. Works cannot simply be abandoned. Reasonable measures must be put in place by the contractor to protect the Works. However, he carries a duty to not incur unnecessary additional costs, given his right of reimbursement under this clause.

Insurance requirements must also be maintained since it is linked to either the Taking-Over Certificate or the Performance Certificate. The additional cost of premiums can also be reclaimed.

Should termination follow suspension, the contractor’s problems increase. FIDIC moves from 16.1 to 16.2 to 16.4 and then 19.6, which is drafted in the situation of Force Majeure. Hence, costs of suspension are not paid for as a “price….stated in the Contract” [19.6(a)] and possibly may not be considered to be “any other cost or liability .. reasonably incurred…in the contemplation of completing the Works” [19.6(c)].

Where the Temporary works have a direct impact on integrity of part of the Permanent Works, the contractor has a double responsibility:

· He (if the applicable jurisdiction dictates) may be obliged to maintain his Temporary Works to prevent damage to the Permanent Works.  This may not necessarily be a safety requirement.

· If he does decide to pursue compensation, he will have to prove that he fulfilled his obligation with incurring as little cost as possible. In this case, he may be required to remove the Temporary Works if the cost saving is more than the maintenance.

Sub-clause 17.2 – Contractor’s Care of the Works states:

"The Contractor shall take full responsibility for the care of the Works and Goods from the Commencement Date until the Taking-Over Certificate is issued (or is deemed to be issued under Sub-Clause 10.1 [Taking Over of the Works and Sections]) for the Works, when responsibility for the care of the Works shall pass to the Employer. If a Taking-Over Certificate is issued (or is so deemed to be issued) for any Section or part of the Works, responsibility for the care of the Section or part shall then pass to the Employer."
In the Sub-clause 1.1.5.8, "Works" are defined as being "the Permanent Works and the Temporary Works”.
So, up until the Taking Over, the Contractor is liable and should take care of the Temporary and Permanent Works.




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Construction Engineers and Job Burnout

posted Mar 9, 2011, 4:50 AM by Administrator 1   [ updated Apr 4, 2011, 1:39 AM ]


In Hong Kong there was a study carried out in which it was found that engineers working in contracting organizations report a higher level of burnout than fellow engineers working within the consulting fields.  It has been established that burnout is primarily attributed to stress factors of job conditions and working environment.

Qualitative overload and lack of advancement prospects were found to be major predictors of job burnout within the consulting sector, while long working hours, role conflict, role uncertainty and lack of job security were found within the contracting organizations. 

Strategies to minimize burnout, such as redefinition of job descriptions, were suggested within each type of the engineering sectors.

 

The Construction Industry

Inherently, the internal and external environments of the construction industry are hugely demanding.  The construction industry is highly competitive and therefore exhausting to the employees. 

 

Taking into account Porter’s Five Forces Analysis and applying it to the construction industry, it is evident that construction businesses operate in a minefield of demanding conditions with overwhelming rivalry among existing competitors, the ever-present threat of new entrants and the high bargaining power of its customers.

Primarily, the industry has an on-going tendency to choose the lowest bidder in most construction projects.  This occurs even though this practice has been repeatedly criticized for causing unhealthy competition.

Secondly, the industry is an open market, with virtually no entry barriers; therefore minimal initial capital is required.  Additionally, the bargaining power of clients is very high because of the traditional line-management system.  This therefore leads to a grim operational environment for contracting and consulting organizations.

The internal environment within the construction industry is also grueling.  The “fast-track” system with severe penalties for delays causes “unrealistically compressed delivery programmes”.  The resulting long and irregular hours cause mental and physical exhaustion and push such things as work-life balance out of sync.  Long daily working hours and overtime is common.  Construction work is inherently dangerous, causes pollution and the required labour-intensive work leads to phenomenal pressures on construction professionals.

The recent worldwide recession has triggered a serious decline in the construction industry, adding to the issues of unemployment and job security in this field.    Construction companies attempts to cope with the situation and survive leads to a general reduction in labour.  Those who retain employment invariably work longer hours and carry greater workloads.

 

Construction Engineers – Consulting versus Contracting Organizations

Primarily, engineers design, manufacture, construct, operate and maintain products or services pertaining to their organizations, taking into account safety and dependability, and simultaneously must give consideration to economic, commercial and legal limitations.  Whether construction engineers are in the building, civil, structural, geotechnical or building services, they all receive similar education.  However, the scope of work and the working conditions of construction engineers in consulting practices or government departments are worlds apart from their fellow engineers in contracting fields.

Construction engineers within consulting organizations operate mostly from an office and work primarily with design, selection of materials and monitoring of work.  Construction engineers working for contracting companies are on site and are responsible for planning, coordination, supervision, management of the workforce, machines and materials, controlling progress, quality and budget and compliance with legal requirements in terms of safety and environmental concerns.  In short, these engineers often have a role of project management.  This typically encompasses a difficult balance of the expectations of various stakeholders, resulting in a high possibility for conflict.  Their level of stress is therefore exacerbated by the conflict within their role: there often is a clash between professional standards, tight deadlines and budgets.  This stress increases where “fast-track” projects operate with minimal profit.  The increase in safety and environmental factors, along with the threat of personal liability resulting from unforeseen incidents adds to their stress.  The job-related stress stemming from various sources threatens the health and well-being of construction engineers, thereby simultaneously reducing the productivity and long-term competitiveness of the companies for which they work.   Hence, contractors who are site-based are exposed to different and more severe stressors than office-based construction engineers.

 

Job Burnout – Definitions, Causes and Consequences

Widely, scholars recognize that job stress has at its basis:

·       Role overload

·       Role conflict

·       Role ambiguity

·       Responsibility resulting from the work environment

The negative impact on the organization results in:

·       Low levels of job satisfaction

·       Decreased commitment to the organization

·       Negative attitudes toward work

·       Low productivity

·       Reduced effectiveness

·       High levels of job uncertainty

Burnout is defined as Chronic Emotional Fatigue

Burnout is a gradual process.  It comes about as a result of persistent, daily exposure to stressors over a long period of time and results in emotional exhaustion, cynicism and reduced professional effectiveness. Professionals therefore have a tendency to assess themselves negatively, thereby becoming dissatisfied with their achievements at work.

It has been proven that burnout has a negative result on individuals and the companies for which they work.  Burnout leads to mental and physical health problems, such as:

·       Psychological distress

·       Anxiety

·       Depression

·       Reduced self-esteem

·       Headaches

·       Disrupted sleep  

·       Substance abuse

For the organizations, the above results in:

·       Absenteeism

·       Reduced staff productivity

·       Increased staff turnover

Very seriously, burnout is contagious, affecting colleagues and has a negative overflow into home life and personal relationships.

Since burnout affects the individual’s life and can influence socioeconomic factors, it is clear that intervention strategies have to be devised to minimize burnout.

The identification of occupational stress in the construction industry indicates that engineers in this arena are very likely to suffer from burnout to a high degree.  The nature of the industry is that the individuals are constantly and daily exposed to work-related stress over prolonged periods of time.

 

Predictors of Burnout

Comparison between engineers in consulting organizations and contracting organizations

 

 

Engineers in Consulting Organizations

 

 

Engineers in Contracting Organizations

Emotional exhaustion

Qualitative overload

Emotional exhaustion

Long working hours

 

Little control over work pace

 

Little control over work pace

 

 Role conflict

 

Dissatisfaction with pay

 

Long working hours

 

Role conflict

 

Dissatisfaction with pay

 

 

 Cynicism

Lack of promotion prospects

 Cynicism

 Role conflict

 

Role Conflict

 

Role ambiguity

 

Dissatisfaction with pay

 

Dissatisfaction with pay

 

Professional inefficiency

 

Social dissatisfaction

 

Qualitative overload

 

Professional inefficiency

 

Role ambiguity

 

Job insecurity

 

 

 

Role ambiguity

 

From the above table it is evident that the two categories of engineers are exposed to different job-related stressors, which lead them to experience burnout at different levels.

It is clear that there are enormous financial implications - both tangible and intangible - associated with job burnout.  These implications have an impact within the organization and also within the industry and within the economy to which it contributes.  Where burnout is widespread, the construction industry is very likely to suffer a reduction in its overall efficiency, threatening the long-term competitiveness of the entire sector.  This plays a significant role in the overall economy of the individual countries.  Therefore, through the mitigation or minimization of job burnout among construction engineers it is possible to bring significant additional financial benefit to the industry.

To resolve job burnout experienced by construction engineers and thus reduce the negative impact burnout may have on their well-being and the effectiveness of the industry, it is imperative to identify the potential sources of burnout.  Preventative strategies are more likely to succeed if the strategies address the sources of the problem directly.

 

Long Work Hours

The construction industry is characterized by long working hours.  Long or excessive working hours is a strong predictor of emotional exhaustion. 

Results:           

§  Mental Fatigue

§  Physical Fatigue

§  Reduced participation in family matters

§  Work-to-family conflicts

§  Increased work pressure

§  Health threats

§  Continual tiredness

§  Stress-related disorders

 

Job Security

Job security has been found to be a predictor of professional efficiency among engineers.  The implication is that if there is any uncertainty about the continuance of a current post this threatens the psychological well-being of engineers and potentially lowers their emotional resources and energy at work.  Since the construction industry is project-based, continued employment is often conditional on successful tendering for new projects – and this in a highly competitive environment.  This unpredictability leads to uneven workload and severe lack of stability in employment.  Substantial fluctuations in demand cause contracting organizations to face financial difficulties and resource challenges in lower times of demand.  The result in the engineers is a psychological threat of unemployment and therefore a job predictor of burnout.

 

Role Conflict and Role Ambiguity

Burnout has a likelihood of being linked to the incompatibility of the expectations communicated to an employee and the means of accomplishing them.  This role conflict and role ambiguity significantly predicts their levels of cynicism.  Construction engineers, in the nature of their jobs, are involved in multiple disciplines and tasks.  These include balancing the expectations of different stakeholders, with a huge potential for role conflict resulting in high levels of stress and, thus, burnout.  Conflicting stakeholders that contribute to this burnout include clients, project managers, consultants, subcontractors, suppliers, the government and public utilities.  There is a role conflict that arises between professional standards on the one hand, and budget constraints and project progress on the other.  These responsibilities are associated with life-threatening consequences should something go wrong, adding further stress.  There are, hence, strong grounds to support the view that within the construction industry the requirement to complete projects on time, to desired quality, and yet within budget, as well as satisfying a wide range of stakeholder objectives (which are often conflicting), can subject engineers to pressure that manifests itself as burnout.

 

Qualitative Overload

Qualitative overload has a substantial effect on emotional exhaustion in reduced professional efficiency among engineers.  In the situation of qualitative overload they often feel that they lack the basic skills and talent required to complete their tasks sufficiently.  Fast-track projects, with extremely tight design and construction schedules, typically have these types of results on engineers.  Often design and specifications change during projects, adding to engineers’ workloads.  In organizations where there is a scarcity of resources, qualitative overload is sure to be found.  Adding to overload is the continual threat of cutbacks.  Cutbacks have immediate and clear economic benefits in organizations but this imposes an additional workload on those who remain behind.

 

Promotion Prospects

The recent decline in the construction industry has resulted in promotion opportunities not materializing, causing in deep cynicism.  Engineers invest significant time, skills and effort to obtain recognition, remuneration and reward, to find that their working conditions impede their capacity to achieve their personal expectations, causing a violation of their personal psychological contracts.  These engineers therefore adopt a cynical attitude.  Burnout occurs when personal self-concept and organizational environment fail to match.  This can happen when, perhaps, an engineer feels that he should be promoted but subsequently this fails to occur.  Burnout also occurs where individuals and their job conditions is a misfit.  There may also be a mismatch between promotion prospects of construction engineers and the promotion policy of the organization.

 

Job Redesign

Steps for reducing burnout:

1.     Job redesign may be an effective preventative strategy.

2.     Organizational intervention strategies with the objective of reducing qualitative overload should be implemented.

3.     Enhance promotion prospects.

4.     Organizational intervention designed to

§  Reduce working hours

§  Reduce role conflict

§  Reduce role ambiguity

§  Enhance job security

However, the reality is that during low or negative periods, there are daily greater competitive demands on businesses.  During such times, generally, organizations are ill-equipped to apply such intervention strategies if there does not appear to be an immediate return on investment.  Instead, employers typically are forced to downscale and become more cost conscious, down-sizing head count, assigning multiple roles (sometimes conflicting) to those retained who then need to work longer and carry a higher workload.  The workers experience greater stress since, in these types of circumstances, they have a low level of control over work-related causes of stress. 

Given that the identified job predictors of burnout are not easily minimized or removed, other strategies, such as coping interventions, become more relevant and are being conducted in further studies.  Also, the different factors leading to burnout between the engineers in consulting organizations and those in contracting organizations clearly emphasizes that different intervention strategies should be devised and implemented within these two types of organizations to effectively manage the job burnout experienced by their engineers.

 

Based on a paper titled Job Burnout among Construction Engineers Working within Consulting and Contracting Organizations written by Brenda Yip and Steve Rowlison, published in the Journal of Management in Engineering July 2009 

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