Gainsharing and Profit Sharing

Gainsharing (GS) and profit sharing (PS) are pay-for-performance systems used by organizations to reward workers for increased performance at the group, unit, or organization level. The ultimate goals of GS and PS plans are improving specific aspects of organizational productivity and improving employee attitudes relating to justice, collaboration, and teamwork. Successful group-, unit-, and organizational-level pay-for-performance plans incorporate the concept of common fate. Common fate is integral to the management of performance at the group, unit, and organizational levels. The performance of an organization is seen as a direct function of the combined efforts of all its members. Workers who feel they have a stake in the company make contributions to the success of the company. The margin of success for an organization, then, comes ...