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- Submitted by: sospeciall45
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- Category: English
- Date Submitted: 10/24/2011 03:09 PM
- Pages: 8
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Course: COMPENSATION & REWARDS
Sub-topic: GAINSHARING
TODAY MANY PEOPLE VIEW GAINSHARING STRICTLY AS A BONUS OR GROUP INCENTIVE PLAN.
HOWEVER, IT IS MUCH MORE THAN THAT.
GAINSHARING HELPS TO DRIVE A CHANGE IN THE CULTURE OF ORGANISATIONS. DISCUSS.
Gainsharing is a technique that compensates workers based on improvements in the company's productivity. That is, a compensation system that evaluates its workers performance based on key performance indicators (Mericle, 2004).
Gainsharing is a bonus incentive system aimed at improving productivity through employee involvement, with the gains from "working smarter" shared between the employer and the employees according to a predetermined formula. It includes (1) a financial measurement and feedback system to monitor company performance and distribute gains in the form of bonuses when appropriate, and (2) a focused involvement system to eliminate barriers to improved company performance. Gainsharing, in one form or another, has been around since the 1930's (HR Guide, Retrieved 2004).
In essence, gainsharing is a strategy organisations employ to enhance their productivity levels through an emphasis on teamwork (involvement) where employers compensate employees for their efforts in trying to keep the organisation’s performance at an optimum level. This also helps to maintain a competitive edge over its competitors since this strategy focuses on maximizing outputs using less resource. That is, operating at an efficient level.
Whilst often confused with profit sharing, Gainsharing is definitely not profit sharing, although there are some similarities. Profit sharing is aligning with the company's performance, whereas Gainsharing focuses on the company's most vital performance metrics. Payments come out of increased revenue or reduction in costs. Profit sharing typically runs on a quarterly or annual cycle, whereas Gainsharing generally cycles on a monthly basis. Therefore, with such a high frequency,...
Sub-topic: GAINSHARING
TODAY MANY PEOPLE VIEW GAINSHARING STRICTLY AS A BONUS OR GROUP INCENTIVE PLAN.
HOWEVER, IT IS MUCH MORE THAN THAT.
GAINSHARING HELPS TO DRIVE A CHANGE IN THE CULTURE OF ORGANISATIONS. DISCUSS.
Gainsharing is a technique that compensates workers based on improvements in the company's productivity. That is, a compensation system that evaluates its workers performance based on key performance indicators (Mericle, 2004).
Gainsharing is a bonus incentive system aimed at improving productivity through employee involvement, with the gains from "working smarter" shared between the employer and the employees according to a predetermined formula. It includes (1) a financial measurement and feedback system to monitor company performance and distribute gains in the form of bonuses when appropriate, and (2) a focused involvement system to eliminate barriers to improved company performance. Gainsharing, in one form or another, has been around since the 1930's (HR Guide, Retrieved 2004).
In essence, gainsharing is a strategy organisations employ to enhance their productivity levels through an emphasis on teamwork (involvement) where employers compensate employees for their efforts in trying to keep the organisation’s performance at an optimum level. This also helps to maintain a competitive edge over its competitors since this strategy focuses on maximizing outputs using less resource. That is, operating at an efficient level.
Whilst often confused with profit sharing, Gainsharing is definitely not profit sharing, although there are some similarities. Profit sharing is aligning with the company's performance, whereas Gainsharing focuses on the company's most vital performance metrics. Payments come out of increased revenue or reduction in costs. Profit sharing typically runs on a quarterly or annual cycle, whereas Gainsharing generally cycles on a monthly basis. Therefore, with such a high frequency,...