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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)?

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 11 years ago by anonymous edited 11 years ago by MaplePM

1 Answer

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 11 years ago by sdcapmp (45,840 points) edited 11 years ago by MaplePM

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