The History of Earned Value Management

Through Incentives Plans



By Bertille Hu

SKEMA Business School

Paris or Lille, France




As project is defined to be “an investment that requires a set of logically linked and coordinated activities performed over a finite period of time in order to accomplish a unique result in support of a desired outcome”[1], project management is “the art and science of managing a project from inception to closure as evidenced by successful product delivery and transfer”.[2] It is the key element to either the success of a project or its failure.

To be able to follow the progress of a project, we have to use Earned Value Management (EVM). According to Max Wideman’s Comparative Glossary’s definition, Earned Value Management is “a management technique that relates resource planning to schedules and to technical cost and schedule requirements. All work is planned, budgeted, and scheduled in time-phased increments constituting a cost and schedule measurement baseline.”[3]

EVM is a widely used project management technique which consists of a set of tools and methods that helps to integrate the cost, the schedule and the performance of a project; it is also useful to measure its progress, make forecasts and prevent deviations. It provides a real-time analysis on the performance of the project which is priceless for both the owner and the contractor: the owner has a nice overview on the project progress and can have confidence in it, and the contractor has an easier way to identify and address project’s performance issues.

Key words: Earned Value Management, Project management, Project Progress Control, Performance measurement, Indicators, Incentives

Figure 1 – Directly observed reasons for schedule slips and budget overruns. Solid bar, engineering managers” ranking; twisted bar, general managers’ ranking [4]

To use this technique, we first need to build a strong baseline – the “Performance Measurement Baseline” (PMB) – upon which to compare the progress and to forecast the budget and the workload. It is composed of planning, scheduling, cost estimating and budgeting processes, and is traditionally shaped like an “S curve”.

Figure 2 – DAU Earned Value Management ‘Gold Card’ [5]



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Editor’s note: This paper was prepared for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Hu, B. (2019). The History of Earned Value Management Through Incentives Plans; PM World Journal, Vol. VIII, Issue VIII, September.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Hu-history-of-evm-through-incentive-plans.pdf



About the Author

Bertille Hu

Lille, France



Bertille HU is a 22-year old French student, currently pursuing a Master of Science degree in Project and Programme Management and Business Development at Skema Business School, Lille Campus. Pursuing a double-degree in engineering at Iteem, Centrale Lille, she developed a keen interest in the industry and is getting graduated with a specialization in production.

Having a multi-cultural background and international orientations increased her interests for project management. Passionate about this field, she is certified in AGILEPM Foundation, PRINCE2 Foundation.

After acquiring significant experience from various positions in various industries in several different countries, her numerous experiences (internships, travels abroad) gave her the opportunity to develop her adaptability and become resourcefulness.

Bertille lives in Lille, France and can be contacted at bertillehu1@gmail.com
or, https://www.linkedin.com/in/bertille-hu/


[1] http://www.planningplanet.com/guild/gpccar/introduction-to-managing-project-controls

[2] Wideman Comparative Glossary of Project Management Terms. (2017). Retrieved from http://www.maxwideman.com/pmglossary/PMG_P16.htm#Project%20Management

[3] Wideman Comparative Glossary of Project Management Terms. (2017). Retrieved from http://www.maxwideman.com/pmglossary/PMG_E00.htm#Earned%20Value%20Management

[4] Labi, S., & Moavenzadeh, F. from MIT (2007). Cost and Schedule Monitoring [PowerPoint slides]. Retrieved from https://dspace.mit.edu/bitstream/handle/1721.1/53709/1-040Spring-2007/NR/rdonlyres/Civil-and-Environmental-Engineering/1-040Spring-2007/C79BE06C-B4F1-43C2-B894-9E208A79D895/0/lect17.pdf

[5] Defense Acquisition University. (2018, September). Earned Value Management ‘Gold Card’. Retrieved from https://www.dau.mil/cop/evm/Pages/Default.aspx