Who of you Project Managers receive a performance bonus and how is it calculated
Anonymous
We want to implement an additional performance bonus for Project Managers who finish projects in our company well.
The current state is that the Project Manager gets his fixed salary.
The interesting question is how a performance bonus can be calculated. Do you have any experience?
Than you folks
My only experience is with random bonuses (only a few hand-picked get bonuses and it is usually not published), and with flat percentage bonuses based on company/divisional performance (this is not specific to PMs alone).
My thought on the PM performance based bonus would be to structure them to be dependent on the controllables - what can be reasonably expected to the controlled by the PM. So metrics such as time/cost/quality variances could be used, but need to be further categorized to be able to distinguish between what could have been prevented by being proactive and performing effective project management vs. what was externally influenced.
Not an easy task, so I would like the opportunity to see what you eventually come up with Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Usually bonus is as company discretion depending on the performance and profits. PM's usually share a certain percentage of the profit at the end of the project. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
First of all, you have to clearly state what does means "who finish projects in our company well". That has to be stated using the SMART characteristic. With that on hand you can state objectives for each project manager most of them general and tied to portfolio/program objectives and others customized to the project characteristics of the project assigned to the project manager. Saving Changes...
Matt DusenburyEnvironmental Manager| SelfReno, Nv, United States
Coincidentally, I am developing performance bonuses for my associates right now. Here are some criteria we have come up with that might be useful:
• Achieve professional certification (PMP, etc.). Mastery has been demonstrated to increase engagement, satisfaction, and productivity and foster intrinsic motivation (Pink, 2011).
• Benchmarking at other operations. Lessons learned from other companies must be demonstrably and gainfully applied at site.
• Achievements must be corroborated by staff other than the employee.
• Preference will be given to achievements based on leading indicators.
• Training of other employees.
• Bonuses will remain at the discretion of management.
We are not yet finished. In fact, we just started yesterday. We would be interested also in what you come up with.
Pink, D. 2011. Drive: The Surprising Truth About What Motivates Us. New York, NY. Penguin Group (USA), Inc. Saving Changes...
Anonymous
Thanks to you all for your input.
Our first thought was to find criteria's. We have in mind complexity and project success.
What we are going to do first, like Sergio posted, brainstorm criteria´s which define the SMART the content of the criteria´s.
Complexity: In mind (Number of Project Members, Novelty, Duration, risk etc.)
Project success: In time, in scope, in budget
To calculate the bonus for the Project Manager a mixture of both seems to be adequate.
Project success x project complexity
Thank you for the specifics. Trying to learn more to further my understanding on the topic…
Associates are happy to have bonus opportunities, but in my experience, they are not as happy if the factors upon which bonus is dependent are out of their control and even more so, if the factors seem biased/unfair in comparison with peers.
In your structure, wouldn’t “Complexity” simply depend on the type of project the PM was assigned to? The PM him/herself cannot control the Number of Project Members, Novelty, Duration, risk etc., correct? How do you ensure that there is fairness and parity in the process – both real and perceived? Saving Changes...
Anonymous
Hi together,
that's the point. Complexity is not that easy. However imagine you have two Project Managers. One has a pioneer project (high novelty, very risky) which have never been done before I his company. Many co-located project members and so on. The other project manager has a project like "Implementation of a software" which has been done several times in the company. Project success is measurable based on reaching the panned project finish date, the panned budget). But wouldn't it be more fair that the Project Manager with the more complex project get a higher bonus than the "standard project"?. The trick is now to define in a "SMART" way how we can express complexity.
(the more x the more complexity, e.g. the more different stakeholders a project has the more complex is it)
Greetings
Freddy Saving Changes...
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