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Building an Effective PM Incentive Program

Updated: May 26, 2022

In our current job economy it’s most certainly on employers to provide incentive to good employees to not only stick around but also continue to reward good behaviors and results. Here are some tips to design a bonus program that will help your employee retention as well as reward your team members.

Objective Measures & Clear Rules

Nothing adds ambiguity and clouds expectations like a seemingly random or subjective set of rules and measure by which bonuses are handed out. Now yes there will always be the one-time merit bonuses to reward over and above behavior of your team members but to build a really good bonus program, it starts with setting clear expectations about how the bonus is to be achieved. Start with picking some simple but effective measures that your organization values around projects. Things like budget – determine a budgeted set of hours for your project manager to deliver the final project in and you can tag a bonus amount to that. If you want your projects to come in on time, work with your project manager to set a schedule that is both achievable and feasible from the organization’s perspective and build a bonus around that. Not to mention that you should have some very clear rules around your bonus program – things like what projects are bonus-eligible or not. Or what the rules are around payouts (ex. employees cannot quit and expect their bonus to be mailed out to them – yes that has been asked of me before!). Set the expectations so that you don’t have those tough conversations down the road that devalue all of the great morale that your bonus program works to build up.

Self-Service Model

I’ve seen many different bonus programs aimed at incentivizing employees and encouraging specific behaviors. One thing they all had in common was that they all felt like none were in my control. By having more of a self-service model where you take the rules and measures that you define for your program and build them into something where your project managers can essentially input their measures and see how those inputs affect what their bonus will be. This model has a couple of benefits. First – the project managers themselves effectively submit what they feel their bonus should be, backed up by measures that have been defined and agreed to, removing the administrative burden on someone to generate that data. Secondly – it instills a deeper sense of buy-in knowing that they are aware of the measures that they need in order to achieve a bonus and therefore can bake that into their planning.

Bonus programs are one way to keep employees engaged and content. While this is not everything to an employee it does add a nice perk and can help encourage desired behaviors in organizations. By developing an incentive program that is clear and measurable and by having your employees participate in the program on a deeper level such as in a self-service model, you are setting your incentive program up for success.


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