Project Management Institute

Cash on delivery

Risk-based pay models are a growing trend in multinational companies interested in providing incentives to their project managers. Connecting the salary and bonus rewards of project managers to the success of their projects is a strategy that can foster an entrepreneurial spirit, encourage buy-in, and create synchronicity among project teams. The risk-based pay model will only work with certain companies, and it is important to provide project managers with the resources and authority they need to be successful, and to assess their performance based on things that they can control. Levels of success can be established with sliding pay scales, incremental bonuses, and flexible criteria. To be successful, the risk-based pay model should involve project managers in the planning and definition of performance standards, and be managed carefully to avoid harming team morale.
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