Do Incentives Pay Off?
From the Voices on Project Management Blog
by Cameron McGaughy,
Lynda Bourne, Kevin Korterud, Conrado Morlan, Peter Tarhanidis, Mario Trentim, Jen Skrabak, David Wakeman, Wanda Curlee, Christian Bisson, Ramiro Rodrigues, Soma Bhattacharya, Emily Luijbregts, Sree Rao, Yasmina Khelifi, Marat Oyvetsky, Lenka Pincot, Jorge Martin Valdes Garciatorres, cyndee miller
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By Ramiro Rodrigues
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Among consultancies it’s common to reward project teams for good results with financial incentives.
The question is: Does this practice lead to better results? There’s a clear difference in position depending on which side the respondents are on. The dilemma is easy to understand.
When you’re in the position to be rewarded for the results achieved, it’s natural to see the positive side of this approach. But when you are responsible for delivering the bonus, some doubt will naturally exist. After all, what guarantees that this strategy will lead to projects with better results (regarding time, cost or quality)?
Many feel these rewards act as great incentives for project teams, thus leading to better performance. But one should also consider the concerns of those who fear that, in the name of this search for metrics, some values—such as professional ethics, transparency and lawfulness—may be compromised.
To find out if the bonus strategy should be implemented at your organization, have a look at the following four steps:
Step 1: Evaluate your organization's values.
More aggressive companies that encourage internal competition tend to favor this strategy. Knowing your organizational environment well will help you determine whether to adopt the financial incentive strategy or not.
Step 2: Define quality metrics.
Interpreting success only by the results related to project time or costs may lead to short-sightedness regarding customer satisfaction. Therefore, develop templates for satisfaction surveys that can help measure the quality of the delivered product and the opinion of the customer who receives the final result.
Step 3: Encourage mutual collaboration.
Dividing the bonus between specific members or projects creates a great risk of dissatisfaction among those who have been excluded. Thus, sharing the bonus between all team members, depending on the results of the overall project portfolio of the organization, is an interesting idea to consider.
Step 4: Start slowly and measure results.
Treat the implementation of this assessment as a project and aim to progress gradually, so that you can evaluate any impacts of this strategy on the culture and value perception of your company.
Good luck and much success!
Posted
by
Ramiro Rodrigues
on: February 13, 2019 07:09 AM |
Permalink
Comments (14)
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Yes, You can find this practices in small org or consultants, However I feel some amount equally distributed within the team is OK. Also giving non-Finical Incentives like taking entire team for a Trip or some Concession coupons will maintain both (employee satisfaction plus org ethics)
Juan Posada Toro
Customer Success Manager| Rockwell Automation
Envigado, Antioquia, Colombia
Alok Priyadarshi
Project Manager| Tata Consulting Engineers Limited
Jamshedpur, Jharkhand, India
Well defined success criteria is key for this kind of initiative. Thanks for sharing Nice Insights and advice.!!
RAJESH K L
Project Manager, PMP| Bharat Electronics, Bengaluru, India
Bengaluru, Karnataka, India
Good post. The benefits of building project team morale outweighs any doubts for implementing an incentive program. It does not have to be monetary. A night at happy hour can do wonders to foster camaraderie.
Do Incentives Pay Off? That's a very good question.
Thank you for sharing this article.
Do Incentives Pay Off? That's a very good question.
Thank you for sharing this article.
Shijith Sugadhan
Chief Electrical Engineer| Jarir Real Estate
Chengannur/Alappuzha, Kerala, India
Most of the professionals know their exact job responsibilities and the management also makes sure that an employee is clearly communicated about his/her roles and responsibilities time to time. But when it comes to sharing the profits or appreciating the team members, there always emerges a situation when the employee does not know what was he evaluated for or the management does not makes the evaluation process transparent or sometimes meaningful and there even situations when an evaluation is overruled by some entity in the management. This whole scenario leaves the professionals all confused at various levels.
I think there should be a clear and precise communication about the expectations of the management from an employee and transparent and fair evaluation policy just not in the company manuals but in actual enforcement.
Tamer Zeyad Sadiq
Assistant Cost Manager| Turner & Townsend
Riyadh, Ar Riyad, Saudi Arabia
Dhawal Shah
PM Consultant| Electronic
Mumbai, Maharashtra, India
Thanks Ramiro for sharing such a wonderful article!!
It puts light on all the aspects of sharing profits/incentives.
If it fits into business strategy of the company, we can start off giving incentives to competitive skills/ management.
But at the same time if some specific people/department are likely to win every time then there must be some balance needed to achieve as we have seven consecutive on either side of the expected/ average output in Quality management so that every employee must feel that s/he is always in race for incentives/rewards.
Sometimes monetary incentives are played out by mere appreciation/ words or mention in meeting or on Dashboard/Intranet of the company.
At strategic management level the intent for financial incentive is to achieve set improvement through its human resource: The impact may be measured basically in Punctuality, Performance and Production. Therefore, a good incentive program should include a thorough Communication of the objective and Education of how to achieve the objective to the recipients.
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