By Lynda Bourne
Accurately predicting project outcomes has always been difficult. The standard tools in use today for doing so don’t offer much help. These tools work on the assumption that the planned duration or cost of future work is the best option to use for calculating completion outcomes.
The significant exceptions to this approach are earned value (EV) and earned schedule (ES). EV, ES and some other tools do adjust future performance based on past performance to predict outcomes—and they have demonstrated significantly more accuracy as a consequence. But no mainstream control tools deal with the management opportunity to actively change future performance with the use of incentive and motivation.
The performance of any activity is influenced by:
- Management competence, in organizing the work and the workers
- The availability of the right resources, tools and equipment
- The skill of the workers
- Workers’ incentives and motivations. Incentives are extrinsic, while motivations are intrinsic.
Incentive Schemes and Motivation Theory
Incentives in the form of piece rates have been used since the commercial revolution of the 11th and 12th centuries. Then in the 20th century, a range of more sophisticated payment schemes were introduced by management consultants looking to drive enhanced productivity (some of the better known are outlined in the chart above – click for more information).
The word “piecework” first appears in writing around the year 1549. Under this system a worker is paid for each piece of work he produces. Since the 16th century, a wide variety of incentive schemes have been developed to encourage productivity by directly linking payments to performance.
Individual schemes are either time-based, with incentives being paid for completing on time or early, or production-based, with workers paid based on the number of items produced.
Group incentive schemes reward team performance by paying a group bonus instead of individual bonuses. The bonus is distributed among all the employees of the organization or team.
From the 1920s onward, management researchers began to realize simple incentive schemes were not sufficient and a range of motivational theories were developed.
Management theorists are still debating whether it is possible to motivate a person or if motivation is an internal state that can be encouraged. However, there is a consistent view that when motivation is increased, productivity increases.
The Planning Conundrum
From the 12th century on, managers have known that well-directed incentive schemes can influence worker behaviour. Consequently, we know the productivity of a worker is a variable based on how he or she responds to various incentives and motivators.
Similarly, the emergence of scientific management and other management theories in the 20th century also highlighted the importance of organization and planning of work, and the workspace, in enhancing productivity. Improvements are always possible.
However, these concepts are largely ignored in project planning and control disciplines. Plans are set based on estimates made at the beginning of the project and rarely changed; at best, tools such as EV adjust future estimates based on performance to date.
What seems to be missing is a process that takes an objective look at productivity and identifies the changes needed to improve productivity to the levels needed to achieve project objectives. The concepts of process improvement and total quality management exist in general management and are mentioned in the A Guide to the Product Management Body of Knowledge (PMBOK® Guide), but no one seems to have moved these concepts into the domain of project planning and controls.
How do you think we could better approach the management of future work to enhance productivity and deliver better outcomes?