Our projections indicate that with our current labor gainsharing model, very few team members would receive any financial benefits in 2019.
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Given the above, combined with the increases in hourly pay that were announced last week, labor gainsharing will be discontinued on November 18.
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As we looked at total compensation, we evaluated our labor gainsharing program and realized that it no longer serves our Team Members as intended.
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In earlier studies the Scanlon Plan could be compared to the two other "named" gainsharing plans and the Scanlon Plan was found to produce higher levels of employee involvement. Scanlon Plans increase job satisfaction, financial literacy, engagement, financial performance, quality, and on time delivery. In studies of the Sears Scanlon Goalsharing plans, Scanlon Units were found to have higher levels of customer satisfaction, employee satisfaction and higher financial performance than control units. Most research today lumps Scanlon Plans into research on gainsharing as almost all plans are now customized. A 1986 General Accounting Office Report on Gainsharing noted that Organizational-based gainsharing programs are achieving high success .... All the gainsharing efforts in the DOD report cost savings (ranging from $7,000 to over $1 Million).
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Some of the installations also report indirect benefits, including decreased sick leave usage and reductions in work backlogs and overtime costs. In addition, some installations report that the gainsharing efforts, by focusing attention on organizational barriers to productivity improvements, help provide mechanisms and incentive for solving these problems. A 1981 General Accounting Office Report on gainsharing concluded that the use of gainsharing programs in private industry had resulted in significant productivity improvements.
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The gainsharing plans went beyond wage incentive plans by focusing on several key factors, including communication, cooperation between workers and management and problem-solving teams to improve product quality. Despite the need for a significant investment in development and implementation, the results were often dramatic and across the board. Bullock, R. J. (1984). Gainsharing – A Successful Track Record, World of Work Report, 9 In 1994 the Consortium for Alternative Reward Strategies (CARS) conducted an exhaustive benchmark study of Organization Performance & Rewards.
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Many of these gains were remarkable, ranging from 20 to 30 percent with some even larger. About three- quarters reported that some index of quality of work life improved, such as a decline in grievances, improvement in satisfaction or morale, or an enhanced work climate. Almost all of the cases found outstanding improvements in employee generated ideas for saving money and improving productivity and quality. More than half the gainsharing plans revealed improvements in every dimension studied, indicating that where gainsharing plans work, they work in a variety of areas.
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Scanlon Plans, unlike most other gainsharing systems, are installed using a high engagement process. The process was labelled the Roadmap by Carl Frost. It begins with an exploration of Scanlon by the top leader of the organization considering a Scanlon Plan. If the leader feels the Scanlon Plan makes sense for his/her organization a "mandate" is drafted.
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The Scanlon plan has been successfully used by a variety of public and private companies for many decades. These plans combine leadership, total workforce education, and widespread employee participation with a reward system linked to organization performance. The Scanlon plan is a gainsharing program in which employees share in pre-established cost savings, based upon employee effort. Formal employee participation is necessary with the Scanlon Plan, as well as periodic progress reporting and an incentive formula.
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Project stakeholders pushed for correction of the structural financial problem caused by the waterfall. When the Gainsharing Bonus program was exposed by project stakeholders privately to City Council along with complaints about the waterfall scheme, the City quickly offered $7 million to "finish" the park. Though welcome, this offering failed to correct the structural issues with venue finance, and it was insufficient to realize the park as designed in the Master Plan or to meet the funding obligation under the Jim Smith plan. Stakeholders also pressed the issue with City management.
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"Gainsharing and the Scanlon Plan" by Paul Davis, The Journal of Employee Ownership Law and Finance, Volume 9. No 1 Winter 1997 Eventually Scanlon included an organizational bonus system as part of the plan. Often these systems replaced piece work systems that were common at that time. Douglas McGregor would study Scanlon's clients to develop his Theory Y vs Theory X. Scanlon Plans were considered one of the best ways to develop Theory Y.Scanlon EPIC Leadership: Where the Best Ideas Come Together, edited by Paul Davis and Larry Spears, 2008 Scanlon Foundation Scanlon's work with the Admanson Company was featured in a Life Magazine article "Every man a Capitalist" by John Chamberlain, December 1946.
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The department had historically funded events center operations shortfalls from the City's hotel/motel occupancy tax, but the waterfall freed the bed tax revenue for other purposes. With much of their windfall, the department created a "Gainsharing Bonus Program" for their employees, which from 2001-2014 sent $7.2 million home as bonus pay, those benefiting most being the director and officers who put the waterfall in place and directed its cash flows. The bonuses were questionably justified for years, having been supported by performance reviews that Convention Center Department Director Bob Hodge falsified and for which he was indicted and fired. No other City department had ever had such a bonus pay program.
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