Building an Effective Project Management Bonus Program
Incentivizing employees for results has led to countless debates and studies and approaches on how to best motivate your team for the best results. Looking at what a bonus is meant to be, it should inspire good behavior with your employees which in turn should produce good results. But how do you incentivize a project manager who is often not in direct control of the results of the project team (since they heavily rely on the project team)? You encourage and reward good behavior. Beyond the easy ones of budget and schedule management, here’s some areas to focus on encouragement of good PM practices and behaviors.
Timely Billing & Invoice Payments
The sure sign of a troubled project is when the bills aren’t being paid or even worse – when the bills can’t go out. Being a good PM means that you’re keeping a good relationship with your client meaning that you can invoice them per the agreed contracts and also get those invoices paid. If there are problems on the project, one of the first markers is when invoices are either not being paid by the client or that your project manager can’t send them out at all, most likely due to a missed deliverable. By putting in incentives for keeping this on track as best as possible, you are encouraging your project managers to treat the invoicing and working capital of your project as seriously as the budget, schedule and quality of your project.
I was once asked what the mark of a successful project was and my answer was simple – having a happy and reference-able client. This is somewhat of a loaded question because you can’t collapse your company just to make your customer happy but I hope you understand the point I’m trying to make. All the effort and hard work in the world won’t mean anything to the success of the project in your customer’s eyes if they aren’t happy and willing to give you a reference when the project is done. By building in incentives to your project manager to keep the relationship strong you can ensure that your project manager will pay close attention to the happiness of your customer and will do what is needed to keep your customer in a good place in the relationship.
This measure is often overlooked since many project team members report into different functional managers and are thus “looked after” from that perspective. Being a good project manager means being a good leader which means keeping a satisfied team (not necessarily happy, but satisfied – there is a difference). Reaching out to team members for honest feedback is a great way to not only keep the project manager on track for maintaining a healthy team dynamic, but is also a great way to make sure that your team members know their voices are heard in the organization.
Measuring and incentivizing performance is always a tricky task, especially when dealing with the intangibles that a project manager deals with on a daily basis. By paying extra attention to the details that make up a successful project and team, you can ensure that you are incentivizing the behaviors you desire for your organization.