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Gain Share Measures

Today's Gain Share Plans often use a Gain Share family of measurement model. The family of measures Gain Share model is tailored made, but often has from 3 to 6 performance drivers.

The family of measures Gain Share model typically has the following elements:

  • The Gain Share drivers are measured separately, and gains and losses are calculated for each respective measure.
  • The percent of the employees' share of the gain or loss from each measure may be different depending on employee controllability and importance to the organization.
  • In some cases the frequency of payout may vary by measure.
  • The gains and losses from each measure are aggregated into a single employee distribution pool.
  • The pool is distributed to all participants.

This Gain Share approach has many advantages over the traditional single (measure) ratio approach. These advantages include:

  • Offering a more dynamic and flexibility Gain Share Plan.
  • Improving alignment with Gain Share and other organization improvement initiatives.
  • Providing the opportunity for the Gain Share Plan to add, delete, or fine-tune the performance measures.
  • Providing a more narrow focus in order to better direct employee "line-of-sight" in terms of what employees do and how they are paid.
  • Increasing employee identify in how they directly impact the organization.
  • Reducing the impact of external factors in which employees have no control.

Regardless of the specific Gain Share design, there are many pitfalls that must be avoided. As one person said; "You'll get what you pay for, so you better make sure that's what you want." It's critically that an organization gets our insight it potentially goes down wrong path. Please contact us at(330) 725-8970 or email at robert@masternak.com. If you desire, many of Mr. Masternak’s professional journal articles are available upon request.

A strict focus on all aspects of Gainsharing design, implementation, training, and monitoring activities.

Gainsharing: A Team Based Approach to Drive Organization Change
Gainsharing: A Team Based Approach to Drive Organization Change

By Robert Masternak

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Medina, Ohio 44256
Phone: (330) 725-8970

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