Incentives for On Time/Under Budget

April 29, 2011

Q: Do you have a great solution to providing an incentive to project managers/supervisors for finishing the project on time and under budgeted labor costs?

A: No I don’t. But, as some of you already know, this question was posted on our NSCA LinkedIn discussion group. I received many suggestions both individually and within the group. They ranged from, “If you hire the right people, you don’t need incentives” to some well-detailed plans that are based on the profitability of each job and the overall performance of the company. I generally think that “old school” owners and managers like me generally dislike the notion of bonuses as we hate to be obligated to them if the overall profits are down in the business. But, mostly, we dislike them as once you give them out they become expected.

This logic is opposed by the more progressive owners and managers who believe an incentive will motivate people to be more productive. They are willing to invest in the systems and resources necessary to manage these incentive plans. They believe the younger generation of workers are driven by financial rewards and that they need to be real and often. In structuring these plans, everyone subscribes to the notion that the company needs to win before the employee wins. That was a consistent comment. We also all agreed that, if you have the right people working for you, cutting corners to earn a bonus isn’t a problem. Integrity and honesty of the employee is key.

I strongly suggest that you join our LinkedIn group as we have had some fantastic discussions take place there. –CW

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