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How do you calculate the exact sum of the bonus in case of a project team by each person if you even want to give direct incentive right after the end of the project (not on yearly basis)?

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Sometimes it is not easy to ensure fairness when giving these bonuses as projects differ a lot in terms of lengths, ROI, risks, strategical value. How can you make a difference between them, do you use weights indicating the scale of importance.
Thanks in advance for the answer!
asked 6 years ago by anonymous edited 6 years ago by MaplePM

1 Answer

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Fairness comes in a lot of different ways.  There is a lot of good information in the related question: http://projectmanagementquestions.com/1287/what-is-the-bonus-structure-for-project-managers#1667 .  When it is truly a bonus, then your performance, the performance of the company, and your value to the company would be considered.  These are the factors I would normally look at. In general, I believe in "pay for performance" as espoused by Jack Welch.  There is a good article covering this concept at: http://www.shrmindia.org/managing-compensation-during-down-times-linking-pay-performance.

Unfortunately some companies use bonuses to cover up low salaries.  You earn a bonus that might bring you up to the low end (or just a little above) of your salary range.  They are factoring in your overall compensation, which isn't the best way to provide a bonus.  A better practice I have found is to compensate someone within their salary range, somewhere around the median (above or below is OK).  Then, provide a true bonus for good performance.  You will gain a good reputation in the employee market place, have a fair and objective compensation policy, have satisfied employees, and truly reward good performance. You will earn a reputation as a firm of endearment.
answered 6 years ago by sdcapmp (45,840 points) edited 6 years ago by MaplePM

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