Economy affects bonuses in architecture and engineering fields

December 08, 2009 |

Wayland, Massachusetts--In the year when bonuses became the villain, executives in architecture, engineering and environmental consulting firms still believe incentive compensation has a place, according to a ZweigWhite survey.

"While it might be tempting to eliminate bonuses in an era when many people are glad just to have a job, we think incentive compensation is an important element of showing our loyalty to and appreciation of our staff--and a good way to reinforce their loyalty and commitment to our firm," said survey participant Jean Carr, principal at Shea, Carr & Jewell, Inc. a Olympia, WA, engineering firm.

The survey of 66 A/E executives nationwide, held in November by The Zweig Letter, a weekly management journal published by ZweigWhite, nevertheless found plenty of hesitation on the subject, with some firms choosing to reduce or eliminate bonuses.

"Our incentive compensation plan is based on profit. Since we have experienced substantially reduced revenues and profit, bonuses will be significantly reduced or eliminated in 2009," said Bob Jones, president of Jones & Carter, Inc., a Houston, TX, a engineering, planning, surveying and consulting firm. "Likewise, if our business is poor in 2010, there will not be bonuses in 2010 either, but that is yet to be seen. If an incentive compensation plan is truly an incentive plan based on performance, then the plan should be able to survive good years and bad. Unfortunately, in a bad year, a good plan will simply not pay out any incentive funds."

According to the survey, while 48% of firms plan to leave their incentive compensation plans intact in 2010, 6% are eliminating them and 12% are giving out smaller bonuses. In addition, 9% are hiring at lower rates and not giving out bonuses, and 25% of firms are still reevaluating their 2010 plans.

About ZweigWhite: ZweigWhite is the nation's leading source of business management services for architecture, engineering, and environmental consulting firms. The ZweigWhite team consists of experts in strategic business planning, business valuation, ownership transition, human resources management, finance and administration, mergers and acquisitions, market research, marketing, project management and project delivery methods who collectively produce a comprehensive suite of products and services, including newsletters, industry reports, executive training, business conferences, and advisory services covering virtually every aspect of firm management. The firm is headquartered in Wayland, MA, with additional offices in, Chicago, IL and Washington, DC.

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