Using Earned Value Management Indexes as a team development factor and compensation tool

The last week I attended a webinar organized by the PMI CoP Earned Value Management titled "Using EVM for Team Compensation" or in his longest version "Using Earned Value Management Indexes as a team development factor and compensation tool".

The webinar was provided by Ricardo Vargas, who is very well known in the project management world. For those of you who have not heard about him yet, I copy an extract of his Bio:

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Ricardo is a project, portfolio and risk management specialist. During the past 15 years, He was responsible for over 80 major projects in several countries in areas of petroleum, energy, infrastructure, telecommunications, IT and finance, comprising an investment portfolio of over 18 billion dollars.

Currently he is the director of the Project Management Practice Group at UNOPS and live in Copenhagen, Denmark. His work is focused on improving the management of humanitarian, peace-building and infrastructure development projects in dozens of countries, such as Haiti, Afghanistan, I

Iraq and South Sudan.

He is a previous Chairman of the Board for the Project Management Institute (PMI), the first Latin American volunteer to be elected to such position.

He is the author of twelve books on project management, published in Portuguese, English and Spanish, which have sold over 250,000 copies throughout the world.

Ricardo is a chemical engineer and I hold a master’s degree in Industrial Engineering from UFMG (Federal University of Minas Gerais). He also holds a Master Certificate in Project Management from George Washington University and he is a Project Management Professional (PMP), Risk Management Professional (PMI-RMP) and Scheduling Professional (PMI-SP) by PMI. He is also certified as a Programme, Project Management and PRINCE2® Registered Consultant (P2RC) and Managing Successful Programmes (MSP) Practitioner by the UK Office of Government and Commerce (OGC) and as Certified Scrum Master (CSM) by the Scrum Alliance. He attended the Program on Negotiation for Executives at Harvard Law School and has an executive formation in Strategy and Innovation from Massachusetts Institute of Technology (MIT).

His twitter is @rvvargas

His specialties are:
Project, Portfolio and Risk Management
Negotiations
Crisis Management
Troubled Projects
Microsoft Project 2013
Coaching and mentoring
Leadership

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The objective of this presentation was to present the main components of the development of a project team, the motivational characteristics inherent to the team work and an interrelation proposal between the earned value analysis and team development through the SPI and CPI indexes obtained by the tool and team development models and the compensation and reward in the project, allowing to reduce the evaluation subjectiveness of the human resource in the project.

The presentation presents a brief report about the team development and compensation policies, as well as an introduction to the earned value concept aiming to align the approached concepts.

The main learning objectives were:

1. Understand the main components of the development of a project team, the motivational characteristics inherent to the team work

2. Understand the interrelation proposal between the earned value analysis and team development through the SPI and CPI indexes

3. Briefly understand about team development and compensation policies concept. Also get basic understandings of the earned value concept aiming to align to team development.

You can get more details in the paper he published for this topic that can be found at his website:

www.ricardo-vargas.com

The webminar was very well conducted, and it was explained in a way that helped to understand perfectly all the concepts and formulas used for obtaining the HPI - Human Performance Index.

My point of view about this new index, HPI, are:

- As it is linked to EVM, it can not be obtained in projects where for their nature EVM can not be implemented.

- It does not take into consideration dependencies that may be causing deviations on time or cost to that specific task.

- Baseline cost may not be correctly estimated and that will impact the compensation of the resources/teams assigned to that task.

- Baseline scheduled may not be correctly estimated and that will impact the compensation of the resources/teams assigned to that task.

- It may impact the team collaboration as they will be more focused on trying to achive their individual tasks rather than helping to the other project team members.

It is remarkable the innovation attitude from Ricardo, trying to bring new indexes in techniques like EVM, helping to develop the project management profession. I recommend all of you to check his website and follow him in twitter.