Preheat Oven: Preheat your oven to 350°F (175°C) and grease a 9x13-inch baking dish with butter.
Cream Butter and Sugars: In a large bowl, cream together the butter, granulated sugar, brown sugar, and ½ cup of peanut butter until smooth.
Add Egg and Vanilla: Mix in the egg and vanilla extract until fully combined.
Combine Dry Ingredients: In a separate bowl, sift together the flour, baking soda, and salt. Stir in the oatmeal.
Mix Batter: Gradually add the flour and oatmeal mixture to the butter mixture, mixing on low speed until well incorporated.
Spread and Top: Spread the dough evenly in the prepared baking dish and sprinkle the butterscotch chips on top.
Bake: Bake for 20-25 minutes, or until the edges are golden brown.
Prepare Glaze: While the bars are still warm, whisk together the powdered sugar, milk, and remaining ¼ cup of peanut butter until smooth.
Glaze Bars: Pour the glaze evenly over the warm bars.
Cool and Serve: Allow the bars to cool completely before slicing and serving.