Performance Based Incentive Scheme In Software Industry

Hi Friends,
I represent a software development company with 70 employees. We are thinking of introducing a variable pay component that is linked simultaneously to project delivery (from a team perspective) and individual contribution. The scheme should ideally cover all our technical staff. It will be great if anyone who has implemented something similar can share the idea.
Thanks & Regards
Robin Thomas

Robin, without automation no variable pay scheme can be truly effective. Automation areas include 'Goal Setting & Tracking', 'Performance Appraisal' & 'Compensation Management'. If you are ready to invest, 'EmpXtrack' does offer a solution implemented by many. You may visit their website & study.

1. You may introduce Fixed : Variable ratio for various employee roles across the company
2. As far as variable part is concerned, you need to arrive at business logic to reach variable
2.1 This could be based on contribution to project (team) and individual contribution
2.2 Weightage to be defined for team contribution and individual contribution
3. For project contribution measurement, need to track projects and various attributes like completion, billing, support rating, score etc.
4. For individual contribution measurement, either appraisal rating or take time sheet fulfillment
5. Instead of paying on a monthly basis, it could be easy to administer the payout process, if go for quarterly payout process

Hi Robin,
How much pay you have decided? Pay depends on individual salary or a fixed amount you have decided. Few months back we also applicable it in our company. I've shared some points, hope it'll help you.
You may introduce 2 types of performance i.e.
1. Measurable Performance
2. Non measurable Performance
A. Measurable Performance: Below factors are measured according to your performance.
1. No. Of billable hours in a month:
2. Quality of work (in terms of bugs)
B. Non- measurable Performance: You can take add some points for non-measurable performance. which shows interpersonal skills of employees.
1. Regularity/ Initiative/Deadline/Leadership Skill/ Teamwork/Improvement/Learning Ability/ Loyalty/ Dedication/Time Management etc.
Regards,
Nisha Sharma
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