Using employee gainsharing plans to improve organizational effectiveness

Purpose – To introduce a conceptual model for increasing the likelihood that gainsharing plans will be successfully implemented. Design/methodology/approach – The literature on gainsharing plans is rich in descriptions of how individual cases were successful or unsuccessful owing to various situational variables. Research on the effects gainsharing plans have on organizational effectiveness is much needed. The present paper builds on current research by providing a general model of factors that determine whether a particular gainsharing effort will increase organizational effectiveness. A review of the empirical literature provides support for the model presented. Findings – Gainsharing can be an important and successful intervention for many organizations. The keys to success are involving all stakeholders in the development of the plan, developing an easy to understand formula for sharing gains, maintaining transparency, and ensuring that the plan's goals are in line with the organization's goals. Originality/value – Develops a conceptual model which can be used by many organizations in an attempt to use gainsharing as a means to increase organizational effectiveness. Considerations for future research are discussed.