Group Sharing
A Group Sharing Plan is a type of team-based Alternative Reward Program, but differs from the others in its features, advantages, and disadvantages.
Team Based Programs:
• Gainsharing
• Group Incentives
• Group Sharing
• Long-Term Capital Accumulation
In a Group Sharing Plan, all employees in company (with some exceptions) share rewards based on production gains and/or cost savings. These are not necessarily tied to corporate results or profitability.
Design Features:
- Performance targets are established; requiring that standards be established and the planning process is well documented.
- Funding requires a systematic mechanism for setting aside sufficient moneys to fund rewards.
- Includes a consistent and acceptable method for allocating rewards among eligible participants.
Advantages:
- Focuses the group on specific performance targets.
- Since rewards are controllable by individuals, the programs can be very motivational.
- The program can be integrated with other corporate initiatives (i.e., quality, product/service introduction, cost savings, etc.).
- Leads to improved communication and employee relations.
Disadvantages:
- Group Sharing plans can be costly to install and administer.
- De-emphasizes individual performance which can result in excessive peer pressure.
- Requires open communication with employees on costs, profitability, etc. (although this can be a sensitive issue, there are alternatives available).
- If the performance targets are not carefully selected, adverse results may occur.
To find out more on how Compensation Resources, Inc . can help your company with Group Sharing , please contact us or call us directly to speak with our compensation consultants at 877-934-0505
