this issue -->
Biggest Mistakes People Make Implementing Gainsharing
(1) Not Being Specific on How to Drive the Gains
Without focus, without specific action
plans, your improvement efforts will fizzle and die.
Managers might try to motivate people by saying something like "If
we have a five percent productivity improvement this month, then
we will have a shot a bonus. We have the work, the materials, the
people, so let's go make it happen!"
But exactly how are we going to drive the gains? We can't
improve in general. We can only improve by making specific changes.
We've got to be specific in terms of the problems, and who
is going to what, by when to fix them.
For example, a manager might show the efficiencies in an area and
discuss how we need to improve them. They ask, "What should
we do to improve these numbers?" But they don't breakdown
the gap between where they are and where they need to be.
Let's say, (for example) that we have 65% efficiency, which
means we have 16 hours of lost time. Three hours might come from
set-ups taking longer than planned. So what specifically are we
going to do to reduce set-up time? Who is going to do what, by when?
How will we check to see that the fix(s) worked?
Wimpy analysis & plan gives wimpy
And where does the other time go? What should we do to find out
where the time is going? How do we divide up the time once we get
data to answer this question and put action plans in place to address
these issues? How are we going to follow up and see if the fixes
We have to define what "good" looks like. Then aggressively
go after achieving it. If we're not specific about where we
want to be, we can't aggressively attack the gap between here
"If you don't know where you're going, you'll end up somewhere
~ Yogi Berra
(2) Bonuses Don't Track with Profits
THE MOST IMPORTANT ISSUE in designing
a Gainsharing Formula is that profits track with bonuses.
The Gainsharing results should mirror and predict
That is, if we are not "in the hunt" for a bonus, based
on the Gainsharing information, we probably will not have the
financial results we want either.
It's essential for Gainsharing to be self-funding, but also
for the Gainsharing information to have the appropriate urgency.
If we're not on track to get a bonus, it's not an issue
of "well, we'll see how things turn out in the next
Gainsharing results are like the information from the instruments
in an airplane. If you are losing altitude, that has it's
Similarly, the Gainsharing results tell us how we are doing operationally
and financially. They track with results that are imperative beyond
(3) Time Frame is Too Long
Psychology has proven that the closer the link between an action
and a reward, the greater the influence on future behavior.
This is a consistent, predictable "law" of nature, like
the "law" of gravity. If a reward is delayed,
the impact is diminished or lost.
More than 90% of Gainsharing Systems are set up on monthly periods.
Quarterly Gainsharing periods stretch the link between performance
and rewards, and make it much more difficult to maintain positive
It's not that quarterly periods can't work. They just
make things more difficult, reduce motivation, and the likelihood
Usually, the desire to have a longer Gainsharing period comes from
the fear that the Gainsharing performance
(or bonuses) don't track with profits. So
if that part of the formula design is handled correctly, the need
for longer Gainsharing periods goes away.
Whenever you’re ready . . . here are six ways we can
1. Gainsharing Executive Briefing DVD
This free DVD gives a quick primer on Gainsharing and its “must have” features.
It was created by a television producer and includes on-site interviews with
actual Gainsharing users. Click
here to request your free copy.
2. Gainsharing BluePrint
Answers the question “How could this be applied in my Company?” Outlines
both the formula and “Boots on the Ground” connection fundamentals
required for an effective Gainsharing system. Click
here to request more info.
3. “40 Minutes to a 5 to 15%
Productivity Improvement” Webinar
Learn how to motivate employees and give them “skin in the game” to
drive results. Click
here for direct access.
4. Invite me to speak for your group
or trade organization
I would be pleased to serve your trade organization or other groups as a speaker. Click
here to email me about your opportunity.
5. In-person, on-site presentation
at your company
Let’s put a presentation together for your Management Team and others.
It’s an ideal way to explore how Gainsharing applies to your specific
circumstances without the cost or inconvenience of travel for your people. Click
here to email me to discuss customizing the presentation for your Company.
6. Webinar for your company
We can also develop a custom webinar presentation for your company. This makes
it easy to get a quick overview using technology to maximize convenience. Click
here to email me to request more info.
You can also send your questions to firstname.lastname@example.org
or call 317-371-1021.
About the Author:
Dr. Charles (Chuck) DeBettignies is an author, speaker, seminar leader,
Gainsharing expert, and founder of Gainsharing Inc.
His company implements Gainsharing processes to motivate employees
to pursue great performance with a performance-based pay reward system that
leads to an improved bottom-line at the same time.
Many companies say it's the single best thing they ever implemented
for both their company and employees.
Gainsharing Inc. specializes in Gainsharing
Systems, and offers design, implementation, and assistance to drive impressive,
P.O. Box 501548
Indianapolis, IN 46250
Inc. All rights reserved.