Development and testing of a gainsharing formula in a mid-size company in northwest Wisconsin

by Czekalski, Scott.

Author: Czekalski, Scott L. Title: Development and Testing of a Gainsharing Formula in a Mid-Size Manufacturing Company in Northwest Wisconsin Graduate Degree/ Major: MS Management Technology Research Adviser: Jerry Coomer, Ph.D. MonthNear: May, 2006 Number of Pages: 79 Style Manual Used: American Psychological Association, 5th edition If organizations are to not only survive, but thrive in the changing world of global competition they must find a way to utilize their greatest resource- their people. The old command and control management model and information on a need to know basis is no longer effective in today's changing environment. Organizations must become more efficient and have everyone working towards a common goal and treating the business as if it were their own. By implementing gainsharing, a team-based reward system, organizations will be able to push knowledge and power to the lowest levels possible allowing employees to manage the business and managers to lead. The purpose of this study was to research what is required for a successful gainsharing plan, define an implementation procedure, and develop and test a gainsharing formula specifically for XYZ Corporation, Inc. Through a process of elimination one measure from XYZ Corporation was chosen to be used in a gainsharing formula. As a result, two formulas were created and various scenarios tested using historical data from 2005. Upon completion of the study, conclusions were drawn regarding the validity of the formulas and the feasibility of implementing gainsharing at XYZ Corporation at this time. Also included are recommendations pertaining to future steps XYZ Corporation may take under consideration before implementing gainsharing. This study will benefit anyone who is interested in improving productivity, employee morale, job satisfaction, and employee involvement. An executive summary has been included in Appendix S of the study. The Graduate School University of Wisconsin Stout Menomonie, WI