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Ying Hong (9)

ch 11 - dsiging perf pay plans

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Ying Hong

Chapter 11 Designing Performance Pay Plans GainSharing Plansempl work in a group that reduce costs or productivitythe gains are shared 1 The Scanlon Plan a gainsharing plan that creates mechanisms for empl participation in developing productivity improvementsshares the financial benefits of those improvements w the empl group that generated them2 Rucker plan similar to the Scanlon plan but that expressed lbr costs as aof value added rather than sales value of production 3 Improshare focuses on lbr hoursunitthat does not usually include worker participation4 Family of Measures plan uses a variety of measures to determine the extent to which a bonus payout is justifiedflexible and focused a Disadvantage the payouts are not based on calculated costs saving but instead on achievement of goals Issues of Designing GainSharing Plans 1 Defining the Group all empl who are in a position to affect the results of the plan should be included 2 Establishing the bonus formula the simpler the formula the better BUT must capture all factors that affect perf 3 Defining the baseline use the past 23 ye
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