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Gain Sharing: A Group Motivator

Gain sharing is a fast growing compensation method that is based on goal setting, employee involvement, and rewards. The gain sharing formula is very basic, straightforward, and goal oriented. If employees collaborate to increase their output, increased sales will create an opportunity for larger bo...

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Bibliographic Details
Published in:Management world 1989-05, Vol.18 (3), p.24
Main Author: Paulsen, Kevin M
Format: Article
Language:English
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Online Access:Get full text
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Summary:Gain sharing is a fast growing compensation method that is based on goal setting, employee involvement, and rewards. The gain sharing formula is very basic, straightforward, and goal oriented. If employees collaborate to increase their output, increased sales will create an opportunity for larger bonuses. Gain sharing is successful because it incorporates the following characteristics in its design: 1. a team approach, 2. simplicity, 3. timeliness, and 4. a link between employee bonuses and company profits. When an employee bonus is earned, 2 factors have solidified the company's profits. First, the employees have kept their total labor expense in line with the organization's expectations. Second, the employees have successfully completed their jobs the first time because bonuses are not paid for work that needs to be redone. Employees are a valuable asset to a company, and gain sharing may be the reward and recognition system that will stimulate them to give an extra effort.
ISSN:0090-3825