More and more of the work we perform is being structured and managed in projects. This used to be true primarily for IT and engineering professionals, and in technology firms, but now project-based work seems to be nearly everywhere. As this transition takes place, more employers are adding project-based incentives to their overall mix of rewards. WorldatWork's most recent (2007/08) Salary Budget Survey reports that the prevalence of project milestone/completion bonuses is up 50% over the past four years, as detailed below:
Prevalence of Project Milestone/Completion Bonuses
- 2003 - 14%
- 2004 - 16%
- 2005 - 17%
- 2006 - 18%
- 2007 - 21%
My experience would suggest that these bonus opportunities are not replacing more traditional forms of variable pay - such as special recognition programs or group incentives - but rather are being added as a complement to existing plans. If we think of our overall reward program as a balanced (ideally) portfolio of different elements, then project milestone/completion bonuses fulfill the role of reinforcing employees' ability to collaborate and produce results on teams that often extend across departments/divisions and increasingly cross even organizational boundaries. Result: a richer, more comprehensive, but also more complex total reward program.
As reward programs become increasingly complex, it is even more critical that we periodically review them to ensure that the overall package is indeed working harmoniously and that there are no strategic gaps (critical behaviors/outcomes that are not addressed with any reward element) or instances of double-dipping (two or more reward elements that are essentially targeting the same behaviors/outcomes).
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