Practice Management Member Conversations

  I am the managing principal for a small architectural firm (30 employees) in Washington State.  Yes, we do use bonuses as part of our incentive/compensation package.  We give annual bonuses to our entire staff at the end of our fiscal year based on the overall performance of the firm for that year.  The bonuses go to all of our employees, including the professional staff, interns, clerical staff, and marketing staff.  They are not a guaranteed part of anyone's compensation and there is no formula that we follow to calculate them.  They are purely discretionary.  We recognize that our success rests almost entirely on the performance of our staff and although the size of the bonuses varies from year to year, in our 40 year history we have only had one year without them. 

  We have stayed away from bonuses for success on individual projects primarily because we want our staff focused on the success of the entire firm, not just their own projects.  In a firm our size, what is good for one project is not always beneficial to another.  If staff are worried about their individual project bonuses they will be less motivated to help out on another project when needed.  We also recognize that an individual's performance does not necessarily have a direct correlation to the success of a project.  It is a major determinant but success is often based on criteria that is outside of their control.  For example, if we do a poor job negotiating a contract such that meeting the firm's objectives will be a challenge with the fee available, the staff that we assign to that project may be doomed to failure before they pick up their pencils, no matter how hard they work.  So instead we try to make sure the team on that type of project understands what the measures of success will be and how their project fits into the overall mission of the firm.  Their reward will come at the end of the year, not necessarily at the end of the project.   

  I hope that helps.