Ask Winnie: Column 6

Ask Winnie: Column 6


Dear Winnie

I have been appointed project manager for a major product development effort that should last about a year. I have put together a team of 10 people (including myself) and we are in the process of clarifying goals and defining roles.

I am in quandary about to compensate these folks. They are earning fair salaries for their areas of expertise, but if this project is a success, and I think it will be, there will be some bonus money to divide among us all. How do I determine how to divide it?

Buffaloed in Buffalo



Winnie Responds


Dear Buff,

Sounds as if you are beginning on the right foot and I don't blame you for being concerned about compensation. You have to balance rewarding individual effort with team effort. You don't want to create competition within the team for the bonus money, yet equal division of the money is not going to sit well with those who believe that their contributions to the project are greater than those of other members.

Here is a plan that is equitable and should be motivating.

For example, you end up with $200,000 to share among 10 people. The maximum each could get is $20,000. This way, no one is competing with someone else for the money. Someone else's bonus does not reduce anyone else's share.

The total available money is based on team performance. Only if everybody exceeds their goals by the maximum margin can the pot be reduced to zero. It may be that all of the money is not distributed. Some folks will make the maximum and other will make less; a few might not get any, but it's based on each person's performance.

It would be even better if you had money to distribute at various points throughout the project, not just at the end, so receiving a bonus would be more closely linked to current work behaviors that could be improved for a greater share of the next bonus money. Then too, money not distributed could be carried over so that a share of the next pot would be larger than before.

Buff, make certain that one of each person's goals is to work cooperatively with the team, so that part of the reward comes from team work, not just individual efforts. Of course, there are issues regarding how to measure performance and how to give feedback about it, but I'm out of free advice for this week.

Happy project managing!

Winney


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