Day Rate v Fixed Rate team members

It is possible for a project team to be made up of members who are remunerated in different ways, either paid by the day or paid a fixed rate for the whole project.

For example, a client has contracted a provider at a fixed rate to implement a service or product and another provider (consultancy, freelancer etc) who is paid by the day to work together on a project.

As the two providers are paid differently it is possible that they may have competing views for how the project should be performed.

The provider who is paid a fixed rate, no matter how long the project takes, may want the project to be as simple possible so it can be completed quickly as the quicker the project the greater their profit margin. The other provider who is paid by the day may want the project to be very complex so it can take a long time to deliver, as the longer the project the more money they make.

In this example, a common ground must be found between the two parties and the client. As it is likely that the client wants to have the project delivered as quickly and as cheaply as possible. So, the client must take the lead and carefully manage the two providers so to ensure they get value for money and that the business case of the project is achieved.

This can be tough for the client as it can be difficult to decide as to who they should listen to, as the providers have competing goals due to the form of their renumeration.

By speaking to others who have been in the same situation (client referrals from both providers, industry colleagues and peers who have been in a similar situation etc) the client can create an effective way of working with their providers.

Another idea for the client to be able to manage this situation is to hire a project manager / lead who has been in this situation before on the client side or has worked for the providers so understands how they work.

In conclusion it is important to understand how project members are rewarded so to understand the reasons behind their recommendations and actions. As this will allow the client to manage them more effectively.