Gain Sharing

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In the first of the four articles of this series we referred to a conference of Human Resources Managers which focused on Gainsharing best practices. The participants were HR Managers from 17 North American facilities. Each facility had its own Gain share plan. Article one in the series focused on the calculation or technical side of Gainsharing. Articles two and three focused on best Gainsharing practices related to employee involvement and communication. This article, the final in the series, focuses on recognition.Hopefully if you have had the opportunity to review the first three articles in this four article series, you've come to the conclusion that Gainsharing is much more than a compensation plan, that it is a philosophy or system of management. Gainsharing is a cultural or organizational development initiative. It addresses the "quality of work life."Brief Review- What is Gainsharing?Gainsharing may be best described as a system of management in which an organization seeks higher levels of performance through the involvement and participation of its people. As performance improves, employees share financially in the gain. It is a team approach; generally all the employees at a site or operation are included.The typical Gainsharing organization measures performance and through a pre-determined formula shares the savings with all employees.RecognitionRecognition is a very powerful dimension of a successful Gain sharing initiative. Why? Because when someone is given praise and acknowledged, it sends a very strong message that they are respected. In other words, an outcome of recognition is "respect," and respect relates to a very basic human need. For example under Maslow's hierarchy of needs, recognition/respect enhances the higher level need of "esteem."Maslow said that humans have a need for esteem, a stable, firmly based, high level of self-respect, and respect from others. When these needs are satisfied, the person feels self-confident and valuable as a person in the world. When these needs are frustrated, the person feels inferior, weak, helpless and worthless. How does this tie to the Gainsharing culture?If a company owner shares the financial gains of the organization's success with employees, it demonstrates that people are recognized for their efforts and respected for what they do. Furthermore, when the owner listens and acts on an employee's suggestion it demonstrates that the person is recognized, valued, and respected.The satisfaction of the basic need of respect/esteem further reinforces the importance of the employee involvement component Gainsharing.In the second article in this four part series we addressed employee involvement and Gainsharing. More specifically we reviewed an involvement system that I refer to as a "team-based" suggestion system. Basically the system is tool for gathering employee ideas and suggestions on ways to improve the organization's performance. Teams are formed and are responsible for evaluating and implementing productivity, quality, and other improvement ideas. The system permits employees to funnel suggestions for improved performance to their respective team. The teams are empowered to make decisions regarding idea implementation, with a given level of spending authority. How does this tie to recognition, respect and esteem?Basically, the system gives people the opportunity to have their ideas heard and acted upon. When someone has a suggestion and is given feedback from a member of the "involvement team," it demonstrates that they have been heard. When they see their idea is acted on and implemented, it demonstrates that they are valued. When the owner of the company makes a special effort to thank the person for their idea, the individual's self-respect is even further advanced. In other words, recognition leads to respect, and respect breeds trust.In our conference, the Human Resources Managers emphasized that individual, team, and organization-wide recognition and periodic celebrations were extremely helpful in promoting their Gainsharing plans and keeping employees focused. Department and company-wide celebrations break up the work routine, give people something to look forward to and simply provide a way to have a little more fun.Participants offered these additional suggestions:* Manager feedbackOften the best recognition is a sincere pat on the back. Managers should make a special effort to individually thank a suggester for an idea that has been implemented. Also managers should visit team meetings and offer support and encouragement. Teams can also be verbally commended in the review board, department, or organization-wide meetings.* Form a recognition committeeA committee can be responsible for organization-wide recognition activities including selecting the team of the month, the team that was most successful in terms of idea implementation. Put up a poster with a photo of the team or include an article in the newsletter about the team's activities. Award the "team of the month" a luncheon.* Establish team awardsHave teams recognize other teams that were helpful and supportive. Have the host team treat the other team to dinner. Perhaps the host team could cook dinner.* Hold organization-wide celebrations Recognize milestones (e.g., when 500 suggestions have been submitted, or when the organization has gone a quarter without a customer complaint). Have an ice cream truck deliver goodies around the organization. Give everyone a rose or cream puff. Make it fun.* Bonus ChecksHave the manager or a team member distribute the bonus checks. Thank employees for their involvement, and encourage them to submit ideas.* Establish a hall of recordsDisplay all the organization's awards in the main lobby. Also, have duplicates made and displayed at the employee entrance or cafeteria. Have a bulletin board with positive letters from customers or the field sales workforce.* Develop contests for recognitionOne facility identified the best suggestions from each work area, then drew one suggestion from a hat. The winner received a dinner certificate. The HR manager pointed out that caution needed to be taken when dealing with public recognition. Gainsharing is a collaborative effort and singling out one person for having the "best idea" or making the "biggest contribution" can backfire and hurt the team effort. Therefore they introduce an element of chance by using the drawing. Prizes need not be large: tee shirts, $50 cash drawing, or gift certificates.Following is a list of other recognition activities that have been successfully used.- A $100 drawing per month for each approved suggestion.- Organization-wide luncheons when a record is achieved.- Thank you "Post-it Notes" imprinted with a gainsharing slogan.- A special "focus pool" for ideas: For each implemented idea, $2.00 per employee is placed in the monthly payout pool.- Small signs, stars, or other symbols posted over an area in the operation where a suggestion was implemented.- A short thank you note to suggester from the manager. Perhaps have a corporate executive send a thank you letter.Further InsightsLooks like a lot of work, doesn't it? All 17 facilities agreed that the total effort was much larger than they had initially anticipated. However, in most cases there were no regrets. Those that had more experience with Gainsharing found that by focusing on the employee involvement, communications, and recognitions elements of Gainsharing, their plan had become institutionalized. It was just how they conducted their business.They all admitted that there was still more work to be done. However, they were very confident of their ability to facilitate their Gainsharing plan. The groups agreed that if the organization is ready and management is committed, gainsharing can be a powerful tool for positive change.