HR 3301 Lecture Notes - Lecture 11: Profit Sharing, Independent Contractor, Fasttrack
Document Summary
Two major components are vital for success of a scanlon plan. A productivity norm: requires effective measurement of base-year data, and, acceptance by workers and management of this standard for calculating bonuses. Effective worker committees: their primary function is reviewing suggestions on how to improve productivity or reduce costs. Focus on a predetermined index of profitability. However, most employees do not feel their jobs have a direct impact on profits. The trend is to combine the best of gain-sharing and profit-sharing plans: a company specifies a funding formula for any variable payout linked to some profit measure. Success sharing plan: variable pay increases in successful years, no reduction in base pay and no variable pay in poorly performing years. Long-term incentives (ltis) focus on performance beyond one-year. Special groups share two characteristics: they are strategically important to the company, and their positions hold built in conflict.
