Recent Questions
We currently have a quarterly bonus that is pretty loose. Our employees do not really know what they do to effect it (or not). Recommendations?
You have a classic set of circumstances; uncertainty regarding the measures and lengthy delay between action and reward. Rather then providing an answer here, I would refer you to session 2 of our on-line lecture series that goes right at this issue.
Gainsharing must be incredibly difficult to measure in a job shop?
That is entirely dependent on the types of Gainsharing metrics that are utilized. Measurements involving pieces, pounds, units, hours, standards, etc., are very challenging and potentially risky. Dollar based metrics provide easier and more effective measurements, a true win-win situation. Session 2 of the online lecture addresses this as well.
We are in a very competitive market and find it difficult to raise wages. Can Gainsharing be substituted for a wage increase?
That is a tough question. There is no easy answer and to be honest, we would need to know a lot more about your business and circumstances to offer a definitive answer, but here is a list of issues to consider...
More...We have a year end bonus plan now, would it have to be replaced if we went to Gainsharing?
Not necessarily, but usually, because gainsharing is an "umbrella" measure of companywide performance.
More...We have a privately held company, and are uncomfortable with giving employees financial and other business information.
Better informed people make better decisions. Not sharing some information will hurt the company and compromise it's best interests.
More...Employees are supposed to do a good job, that's what their wages and benefits are for - why would a company pay out a bonus when it could keep the money as profit?
Properly designed Gainsharing is pay for improved performance, beyond your acceptable return/budget benchmark. The company gets all of the initial improvement first, then shares in the incremental improvement with employees only beyond a set target level.
More...Who should be on the Equishare design team? It seems like you wouldn’t want the team to be too big yet you want buy-in.
The typical design team consists of a representative from the key functional areas. It is important to have representation beyond just the President or General Manager and include others from Human Resources, Finance and/or Accounting, Production Management, and Sales/Marketing.
More...How should the scorecard information be communicated?
Communication is one of the keys to the entire process. It is very important to schedule meetings often to make certain that employees are informed as to their progress and what can be done to make the results the best they can be.
More...We have had a gainsharing system for several years, but it is running out of steam. Measurements include efficiency, quality and safety and we reset the targets every year. What should we do to reenergize the workforce?
You have hit on one of the most important strategic questions in the design of a gainsharing system. That is...of all the things we could measure, what should we measure?
More...Isn't gainsharing just an incentive plan?
No disrespect, but most incentive plans are just like training a dog.
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"Sit up, get a biscuit." "Roll over, get a biscuit." "I'm not asking you to think, just follow my instructions exactly and you will get a biscuit."There are lots of books and studies on gainsharing and related topics, why shouldn't we do it ourselves rather than hiring a consultant?
Hiring a specialist saves both time and money. You only have one chance to get it right; a pro knows how to properly design a plan.
More...We have a labor union, can gainsharing work in union environments?
Yes, and we have had many successful installations. However you will need specific language in either the contract or a letter of agreement.
More...Our company has multiple facilities. Some of or senior managers want to do gainsharing "corporately," some want to do it "by the plant." What are your thoughts?
Great question, and there is no single answer. Most often, a business has a Financial Statement by plant.
More...Who typically participates in a Gainsharing system?
A better way to ask this question would be to say, who typically participates in a successful Gainsharing system?
More...We have an existing Gainsharing plan and divide our bonuses equally. Is this the best way to go?
Gainsharing bonuses are treated quite differently from say profit sharing bonuses.
More...Gainsharing….exactly what is it? I’ve heard several different definitions.
Unfortunately Gainsharing has become a generic term used to describe many different strategies.
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