Work More Tomorrow: Resolving Present Bias in Project Management

Project management is responsible for almost 30% of the world’s economic activity, with an annual value of $27 trillion. Traditionally, the frequent late delivery of projects is attributed to Parkinson’s Law, which incorporates laziness, procrastination, and self-protection against reduced deadlines in the future. Incentive schemes are widely designed and implemented to eliminate Parkinson’s Law. Yet many projects are nonetheless delivered late. To explain this, we show computationally that a significant part of project delay is not explained by Parkinson’s Law but can be explained by time-inconsistent behavior, that is, present bias. We therefore propose a new incentive scheme that directly addresses present bias in projects. Our work is among the first to develop a multiperiod model of time-inconsistent preferences for projects. Using concepts from savings theory, we design a Work More Tomorrow (WMT) incentive scheme to mitigate the effect of present bias in project execution. The WMT scheme extends the underlying economic theory of present bias to consider network effects that arise in projects. We show, both theoretically and computationally, that the WMT scheme outperforms the most widely used benchmark incentive scheme by delivering significant improvements in on-time frequency and expected project tardiness at lower cost. Moreover, these improvements increase with project size. An extensive sensitivity analysis reveals the characteristics of projects that respond best to the WMT scheme. We also identify several managerial insights that arise from viewing the frequent delays in project management practice through the lens of a multiperiod model of time-inconsistent behavior.