gainsharing


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gainsharing

a PAY system where a proportion of employees' pay is linked to gains in productivity or reductions in costs. Its benefits are thought to include greater acceptance of changes in technology and work methods, more information sharing, more effective teamwork and greater personal effort. It can be used in organizations where profit-sharing schemes are inappropriate or impossible e.g. not-for-profit and public service organizations.

Two common forms of gainsharing are the Scanlon Plan where a portion of wages is based on movements in the ratio of the total wages bill to the total value of sales, and the Rucker Plan where wages are related to movements in the ratio of the total wages bill to total VALUE ADDED. The former provides an incentive to maximize saleable output whilst the latter encourages cost reduction.

References in periodicals archive ?
For this article, I've broken gainsharing down to three primary areas of production: platemaking, pressroom and distribution.
OIG has issued several advisory opinions approving gainsharing arrangements between hospitals and identifiable groups of physicians.
In 2003, NJHA began working, in association with Applied Medical Software (AMS), and received HCFA approval to start a physician/hospital gainsharing model, but later was stopped due to HCFA not having the ability to waive all the necessary laws to implement the program.
RELATED ARTICLE: Gainsharing Arkansas Style Will Focus on Five Conditions
Unionized companies often start a gainsharing plan in the middle of a multi-year union contract.
According to the Bureau of Labor Statistics, some variety of Gainsharing is being used by about 18 percent of manufacturing companies, the number increasing every year.
It's clear, I think, that gainsharing is not on the fast track," said Mr.
The centerpiece of NYF's performance management system is its gainsharing program, which we developed and implemented in 1998.
People operate under a team-based incentive program called gainsharing, and earn a percentage of the incremental profits they produce.
The second type is group plans that include profit sharing and gainsharing.
Farrell of Foley & Lardner in Tampa recently presented "Physician Gainsharing -- Past and Future" at the 2001 Health Care Industry Conference in Greensboro, North Carolina.
A gainsharing program he instituted in 1996 that returned a percentage of profits to employees was the most effective quality effort to date, not to mention the most popular.