Incentive schemes for resolving Parkinson’s Law in project management

What is it about?

Project management is a business process that supports about 30% of the world’s economic activity. Yet projects routinely suffer from the influence of Parkinson’s Law. This behavioural phenomenon routinely results in failure to deliver work that is completed early before its assigned deadline. As a consequence, the late completion of other work is not offset, and overall project performance suffers. Hence, project success rates below 40% are widely reported. Our work uses mechanism design within non-cooperative game theory. A particular issue in the de- sign process is to eliminate the possibility that a project worker with multiple dependent tasks can im- prove their incentive payment by falsely reporting some of their task completion times. From our review of the academic and business literature of project management, no incentive scheme used in practice accomplishes this. Our results include the design of incentive schemes that eliminate or mitigate Parkinson’s Law. These schemes apply to projects designed under either traditional Critical Path Method (CPM) planning or mod- ern Critical Chain Project Management (CCPM) planning, and are also invulnerable to group strategy. A large-scale computational study validates the resulting benefit to project performance as substantial and also robust across different project characteristics. We also provide what is apparently the first analytical comparison between traditional CPM and modern CCPM planning systems. The incentive schemes we propose are simple and easily implementable. We recognize that perfor- mance incentives are structured differently by each organization, but our work provides a flexible basis from which various practical schemes can be designed.

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Why is it important?

* Providing incentive schemes that eliminate or mitigate Parkinson’s Law. * Our incentive schemes are also invulnerable to group strategy. * Resulting benefits to project performance are substantial and robust.