Topic Thread

Project Manager Incentive/Bonus Programs

  • 1.  Project Manager Incentive/Bonus Programs

    Posted 05-16-2018 13:10
    We are looking to implement a Project Manager Incentive/Bonus program.  We want to structure it so they cover their costs and portion of applicable Overhead and when that is achieved, then put them into a "bonus".  Does anyone have this program in place and if so mind sharing any tips or formulas?  Any help is greatly appreciated.

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    Kimberly Peterson
    EVP
    Beeler Construction, Inc.
    Menomonee Falls WI
    (262) 252-7000
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  • 2.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-17-2018 12:13
      |   view attached

    Hey Kimberly,

    We just implemented a PM bonus program this year, in prior years it had just been discretionary. We do ours based on net profit and have it weighted mostly by revenue and gross margin contributed. I attached an example.

    Thanks,
    Jen



    ------------------------------
    Jen Sullivan
    Controller
    Dovetail General Contractors
    Seattle WA
    (206) 545-0722
    ------------------------------

    Attachment(s)



  • 3.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-18-2018 07:16
    Jen - Thanks for sharing the spreadsheet!  Where does the superintendent fit into this?  Do you handle that differently?

    Thanks

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    LeeAnn Old CCIFP
    Chief Financial Officer
    Sussex Development Corp.
    Virginia Beach VA
    (757) 422-2400
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  • 4.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-18-2018 09:15
      |   view attached
    See the attached.

    This profit sharing example includes the entire company as staff are pooled into 3 categories.  We wanted to make it as simple as possible for both the staff to track as well as accounting.

    Thanks,

    ------------------------------
    Richard Baldini
    Chief Financial Officer
    Brexton
    Columbus OH
    (614) 441-4110
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    Attachment(s)



  • 5.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-18-2018 10:46
    We have superintendents on a different bonus structure, mostly fixed with some discretionary.

    ------------------------------
    Jen Sullivan
    Controller
    Dovetail General Contractors
    Seattle WA
    (206) 545-0722
    ------------------------------



  • 6.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-18-2018 11:05
      |   view attached
    I only included the PM example, but here is how we have broken out the entire company. The goal would be to hit budget and have 10% in bonuses paid out across the company. There would be the PMs and executive office management at a percentage, with superintendents/carpenters/office staff at a fixed rate. Then there would be a discretionary pool to use as needed to recognize high performers.


    ------------------------------
    Jen Sullivan
    Controller
    Dovetail General Contractors
    Seattle WA
    (206) 545-0722
    ------------------------------

    Attachment(s)



  • 7.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-23-2018 09:09
    Thank you for the information, very very helpful.  We have a direction now, we really appreciate all the help!

    ------------------------------
    Kimberly Peterson
    EVP
    Beeler Construction, Inc.
    Menomonee Falls WI
    (262) 252-7000
    ------------------------------



  • 8.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-30-2018 14:52
    Jen -

    Thank you for sharing. How was the new plan received by the PM's? Any suggestions/lessons learned on communicating the new plan to the PM's? Also, have you noticed a shift in behavior in how the PM's run their projects with this new plan in place?

    Thanks again!

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    Sara Jones CCIFP,CMA,CSCA
    Vice President of Risk Management and Strategy
    Oswald Company, Inc.
    Cincinnati OH
    (513) 793-8080
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  • 9.  RE: Project Manager Incentive/Bonus Programs

    Posted 05-31-2018 11:54

    Hey Sara,

    We didn't have any negative reactions, but this is also the first incentive plan rather than a revision to an existing plan. If anything our PMs were grateful to have broader visibility and were excited about bonuses directly tied to job performance. It can be a bit complicated to understand, especially when first rolling out, so really taking the time to explain the details and demonstrate how it works. Our discretionary approach created less variability within job roles, so for high performing PMs it reinvigorated their desire to take on larger projects and run the more complicated work. It is somewhat early to say if it has really shifted behavior long-term, but short-term we have seen only positive results.

    Thanks!



    ------------------------------
    Jen Sullivan
    Controller
    Dovetail General Contractors
    Seattle WA
    (206) 545-0722
    ------------------------------