In the context of incentive systems, gainsharing plans reward employees for increasing productivity or saving money in areas under their direct control.
Gainsharing is described as a system of management in which the organization seeks higher levels of performance with the help of the involvement and participation of its people.
As performance is improved, employees share financially in the gain. It is combinely a team approach in which all the employees at a site or operation are included generally.
Gains and the given payouts are self-fund based on savings which are generated by employees by improved performance.
Gainsharing commonly applies to a single site, or it can be stand-alone organization.
Employees are often involved with the design process of the organization.
A great supporting employee involvement system is a part of the plan in order to drive improvement initiatives.
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