Upon receiving a question from one of my clients about establishing a bonus plan or incentive plan for their project managers. My associate, Dan Cox brought out the following article that gives some great insight into how true or false this may be. I strongly suggest you take a read.
My recommendation to the client was to first look at what behavior is really needed to get the results desired. By isolating the right behavior first, you can focus the incentive on those behaviors, not just some random thing.
From there a system of measurement can be created by the management and the person receiving the incentive. I strongly encourage the focus not be just on total production or just on cost containment. Rather, focus on the "profit" of the project with a longer range total goal and they get a part of it. This causes the person to have a broader view and understanding of what is really needed and best for the organization. Along with this have both a reward for building profit and punitive side for those projects that do not hit the mark. Now you have them truly involved in the business and preparing them to be self-directed.
I feel MONEY is only a true incentive for a very small portion of the workforce. Most job changes require at least a 10% advantage before a move is made. Far too often I've seen people ask and get more money, but no increase in performance, rather a reduction in performance!
What it really is about is MEASURMENT! If one can measure their own progress they become engaged, bring out their problem solving skills and improve performance. Let's look at this through the eyes of DISC.
D likes measurements because they can solve problems and see results
I likes measurements because it provides a status in others eyes and builds their reputation
S likes measurements because it helps them know they are doing the right job the right way
C likes measurements because it assures them what works right and that they are accurate in their actions
So before you go hog wild over giving out incentives, be sure you have measurements in place that provide the right feed back loop to the employee as well as management.
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To your continued success!
Harlan Goerger :)