Project Incentives

RT-140 Topic Summary
RT 140


Research Team 140 was tasked with determining if employee-based project incentives result in an increased probability of achieving project objectives, and developing a methodology and tools for selecting and implementing an employee incentive plan. Through research and employee surveys it was determined that incentives can in fact focus employee efforts and motivate their performance, thus increasing the probability of achieving project goals. Based on research of twenty $200+ million projects, the team created a tool kit which provides a three-phase Employee Incentive Work Process:

  • Phase 1 – Defining employee-based incentives
  • Phase 2 – Determining a projects readiness for an incentives plan
  • Phase 3 – Developing and managing an incentive program

Key Findings and Implementation Tools

1 : Differences in Salary vs Hourly Incentives

While the overall results were reported to be similar in several key areas concerned with project performance, differences were found when comparing hourly and salaried personnel and the use of incentives, as summarized in the Table 1 below. (RS140-1, p. 8)
Reference: (RS140-1)

2 : Employee-Based Incentive Plans (EIP)

EIP should be well-planned, clearly established, and properly supported. When implemented with proper planning and careful consideration to the characteristics of the project at hand and cultures of the companies involved, employee incentive plans can succeed. (RS140-1, p. 13)
Reference: (RS140-1)

3 : Increase in Incentive Pay

The amount of pay that is being leveraged through variable programs is increasing. During the next 20 years, experts predict it will be common for 40% of pay to be contingent on achieving specified results, with only 60% of total pay provided as base salaries and benefits. (RR140-11, p. 11) 
Reference: (RR140-11)

4 : Readiness for Incentives, a Self-Evaluation Checklist

The incentives toolkit provides a self-evaluation checklist consisting of nine Critical Success Questions for determining a project teams readiness for an employee-based incentives plan. A “no” answer to any of the first three questions means you are definitely not ready for an EIP. The more “yes” answers to the last six questions, the better prepared you will be for successful implementation. (IR140-2, p. 5) 
Reference: (IR140-2)

5 : Ability to Influence Project Objectives

Identifying the potential stakeholders that influence the successful outcome of a projects goals and objectives is key to planning an effective EIP. The incentives toolkit provides a matrix for defining these stakeholders and identifying who are potentially eligible for incentives. (IR140-2, p. 12)
Reference: (IR140-2)

6 : Implementation Tool #1

IR140-2, Employee-Based Project Incentives Toolkit

The toolkit provides three phase process for determining if a project is appropriate for an employee-based incentive program, and assisting in developing, managing, and evaluating the success of such a program. The toolkit includes:

  • Worksheet: Is my Project Ready for an Employee Incentive Plan (EIP)?
  • Project Eligibility Matrix
  • Legal and Administrative Issues Checklist
  • Incentive Plan Evaluation
Reference: (IR140-2)

Key Performance Indicators

Improved craft productivity, Improved safety, Improved job satisfaction, Reduced absenteeism, Improved employee retention, Improved customer satisfaction

Research Publications

Project-Specific Employee Incentives - RR140-11

Publication Date: 12/1999 Type: Research Report Pages: 330 Status: Reference

Employee-Based Project Incentives Toolkit - IR140-2

Publication Date: 10/1999 Type: Implementation Resource Pages: 35 Status: Tool

Employee-Based Project Incentives - RS140-1

Publication Date: 06/1999 Type: Research Summary Pages: 17 Status: Supporting Product

Presentations from CII Events

Session - Employee-Based Project Incentives

Publication Date: 06/1999 Presenter: Number of Slides: 20 Event Code: AC99