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EquiShare™ and a Changing Business World
The Challenge
A Midwest manufacturer successfully implemented an EquiShare™ Gainsharing System in 1998 following many years of consistent, profitable operations. However, their business since 2000 has been anything but steady and predictable. The same dramatic changes experienced by many manufacturers in recent years have created a new playing field. Their list will sound familiar: increasing volume; partnering and acquisitions; capital investment in equipment, technology, and facilities; offshore manufacturing; internal re-organization; selling price decreases; outside processes brought in-house; requirements for customer and quality certifications, etc. etc. These significant changes also affected the results of their EquiShare™ System, which had been properly designed for their 1998 "business world". Management wanted to re-energize their EquiShare™ System as a vehicle for companywide communications and engaging associates to help meet these many challenges. How to get Gainsharing back on track?
The Solution
To maintain peak performance, a racecar requires adjustments for changing weather or track conditions. Similarly, organizational systems and procedures may require periodic adjustment to incorporate the realities of a changing business environment. Discussion with management indicated a detailed review of their Gainsharing plan was in order, and perhaps past due. While the core concepts, philosophy, and infrastructure of their EquiShare™ System remain valid, several subtle yet important adjustments were made to the calculation. These adjustments accurately and fairly addressed the new factors in their current business world. After thorough testing, the revised plan was re-launched and all associates received training and a handbook covering the plan details. The plan re-launch included a renewed commitment by management for improved associate involvement, company-wide communications, and organizational discipline.
The Results
With over one year of experience under the revised EquiShare™ Gainsharing System, the results prove things are back on track. Profitability has returned to and even exceeded levels attained in earlier years. Their productivity threshold has been achieved every month, and bonuses to associates have averaged 10% additional pay. Virtually all departmental performance measures have improved. Morale is high and a genuine team spirit is evident. The company is not merely surviving but prospering in a changed business world, and they are effectively using Gainsharing as a tool to help achieve these impressive results.
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