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Gainsharing pays off

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in Leaders & Managers,Office Management

As employers experiment with all kinds of new incentive plans in an effort to motivate workers, gainsharing has proven particularly effective. It consists of a bonus plan that rewards work teams who increase productivity or cut costs. Popular at both small and large companies, gainsharing programs work best when organizations distribute bonuses monthly or quarterly, not annually. Businesses offer team incentives either through straight percentage bonuses (between 2 and 10 percent) or by dividing the pot of savings produced by the team. Example: A Greensburg, Ind., company saved $400,000 during the first seven months of gainsharing, and distributed half the savings to workers.

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