In the Architectural industry ‘Value Creators’ come in many forms. They’re not just the business developers generating revenue through winning multi-million dollar projects, they can be on the delivery side driving profit margins, or creating profile through innovative design leadership.

Yet there continues to be an apparent disconnect between key employee performance and what architecture and design firms are willing to offer as compensation and incentives. In order to attract and retain the best talent, architecture firms need to get creative on how they are paying out appropriate bonuses and incentives to the employees and leaders who are going well above and beyond the call of duty.

Across the professional services industries, Architecture is regarded as being low-paying considering the education and skill level required. Therefore, it is critically important to reward your key employees. It’s often one of the main reasons top talent leave; they need to see recognition through the reward structure.

Equity Isn’t Orange

Before I get to some of the qualities that make up a good performance-based incentive plan, there is one important issue I want to address first. In order to attract quality candidates, too many firms are dangling the promise of equity like a carrot. But many of these firms are not really prepared to give this equity up, nor do they have the systems in place to pair these equity offerings with a clear pathway to leadership.

You need to have solid systems in place for singling out the right employees, developing them, and allowing them enough time to comfortably build their partnership interest in the firm. If these systems are not in place, then your employees may just end up feeling pressured and resentful. In other words, your equity offerings can end up doing more harm than good. 

Elements of a Good Performance-Based Incentive Plan

Though some of your top performers may be self-driven, a properly structured performance-based compensation plan can motivate them to continue to give it their best over the long run. Some companies choose to simply allocate bonuses and other incentive payments during profitable years, and on an arbitrary basis. Some don’t give individual bonuses but hive off a portion of profits to be split (more or less) equally amongst the team. Some don’t offer bonuses at all.

Assuming a company is profitable, here are some guidelines that over the years I’ve seen both employees and employers respond well to.

  1. The expectations, incentives, and rewards are clearly spelled out. Employees should understand what’s expected of them to qualify for the incentive compensation. You should clearly spell out minimum performance standards as well as the ‘over-and-above’ standards that will lead to incentives.
  2. The performance of both the company and individual employees are considered:This means simultaneously focusing not only on company-wide performance goals, but also individual performance goals.
  3. There are ‘subjective’ as well as ‘objective’ measurements: Individual performance goals and measurements of performance also include subjective measures, such as client satisfaction, peer reviews, and evaluations from direct supervisors/leaders.
  4. Put it in writing: too often prospective candidates complain that the road to incentives is woolly. Bonuses can’t be based on a wink and a nod.
  5. It’s not all about the money: sometimes incentives come in the form of education sabbaticals or time to pursue extracurricular industry participation such as delivering university lectures or tutorials.

In short, if you really want to cultivate and keep the top talent in your firm, then you need to properly invest in them. These days, you can’t afford not to.