How to Properly Incentivize Your Project Managers
There is a ton of literature, thought and knowledge around how to incentivize and motivate your team. I want to talk about how to fairly incentivize a team of project managers with the goal of recognizing and encouraging strong project management behavior.
Project managers are responsible for a multitude of things and ensuring that their projects are delivered successfully. First we need to examine what the measure of “success” really is. Is it on time, on budget? A happy customer willing to give a reference? Achievement of the project goals? Once the measure of success is established, reverse-engineer what a successful project looks like and break it down into defined, measurable behaviors that you need your project managers to exercise in order to achieve those desired results. Let’s dive into some results and requisite behaviors that drive those results.
Deliver On Budget
The promised land of any project – an on-budget delivery. Project managers who routinely do this are heavily sought after, even in their own organizations. So what are some good behaviors that these project managers exhibit who can routinely deliver projects on budget?
Adherence to estimates
Minimizing un-forecasted non-billable time
Not unlike delivering on-budget, on-schedule is just as big of success flag as on-budget, in some cases even bigger (especially if your customer is on a fixed-price contract where budget is not as big of factor provided scope doesn’t change). Some behaviors that should be recognized and incentivized to help master the art of bringing projects in on time can include
Identification and (successful) mitigation of risks and threats to the schedule
Regular schedule reviews with your team and your customer
Building realistic schedules based on resource (internal and external) capacity, prudent estimates and lessons learned
All too often, the incentives are based on results and not behavior. But the root trigger of all good results is good behavior and that is what incentive programs should be more focused on. The distinct difference between programs that reward results versus rewarding behavior is that the results could be due to external factors beyond the project manager’s control (to the positive or negative) and the organization focuses on the outcome rather than the process. What’s lost in this approach is there’s no room to reinforce the good habits that you want your project managers to follow. Identify and reward the behaviors you want and the results will follow.