Academic journal article Public Personnel Management

Gainsharing in Zebulon: What Do Workers Want?

Academic journal article Public Personnel Management

Gainsharing in Zebulon: What Do Workers Want?

Article excerpt

What is Gainsharing

The private sector uses gainsharing to reward employees for increases in production and/or profit. Gainsharing focuses primarily on financial or budget figures. The term goalsharing is used when the focus on goal attainment is combined with a reward system. In contrast with private sector organizations, public sector gains are often difficult to measure in terms of direct production or profit. In the public sector budgetary savings or the attainment of specific organizational goals are used as performance measurements for the gainsharing award. Public sector budget savings may not have a clear linkage to "profit" as found in the private sector. While budget savings are still a good measure, they need to be complemented with goalsharing approaches in order to assure that organizational missions are being achieved.

Private sector gainsharing research primarily focuses on profit sharing plans (e.g., Scanlon, Rucker and Improshare). These packages can be readily modified to fit each organization's particular situation or need. All the plans have the common factor of overall productivity as the basis for calculating the gainsharing award.

For a successful gainsharing plan, management must be committed to and involved in the plan. This requires the organizational culture to be one of respect, cooperation and communication with employees.(3)

Employees must be comfortable enough with managers to bring suggestions or ideas about process or quality improvement to their manager's attention.

Even with employee involvement, the gainsharing plan must be simple. Too many factors or complex formulas can cause confusion or mistrust among the employees. Employees need to know the "numbers side" of the gainsharing plan; otherwise they may perceive that the plan is unfair or its measurements unrealistic or unreachable. Communication with and involvement of employees in the design and implementation of the plan can alleviate much confusion.

Gainsharing/goalsharing is a group-level application of pay-for-performance. Rather than rewarding individual competition, gainsharing attempts to harness it into organizational cooperation. As such, expectancy theory underlying individual pay-for-performance plans are still operative in gainsharing/goalsharing. Gainsharing focuses on several organizational aspects employee involvement, pay-for-performance, and the development of specific performance measurements. With the public sector service environment the employment of quantitative measures can pose added difficulties. A department may reach its quantitative goals, but quality of service or department effectiveness may actually decrease. For this reason priorities of the local government council or manager need to be reducing complaints and defining acceptable levels of citizen satisfaction, as measured by using customer surveys. Surveys may ask customers to rate the local government's or individual department's quality of service.(6) Swiss(7) states that surveys have recently been used to evaluate programs. Local government officials should set a customer satisfaction rating of the initial measurement for the gainsharing reward.

Gainsharing research highlights the themes of employee involvement, fair distribution, employee control of the criteria/factors measured and employee-management collaboration to improve productivity. In the initial stages of government reinvention and total quality management, little research has empirically addressed the important roles of customer service and quality. Without the inclusion of quality and good customer service, gainsharing plans are apt to fail.

Even though employees may exceed their quantitative production target, the quality of the products may be so poor that products do not sell. Similarly, we all probably have had a bad customer service experience and vowed not to do business with that organization again. There are very few types of organizations that do not rely on repeat business of current customers or gaining new customers by word of mouth. …

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