Question

1. Gain-sharing and goal-sharing programs have high discontinuation rates. Why do you think that may be?

2. When designing a profit-sharing plan, what do you think are the design issues that would prove to

be the most difficult to decide?

Answer 1

Gainsharing programs refers to comparing baseline performance and to determine the amount of gain and in this process employees have the opportunities to gain sharing bonus monthly basis or quarterly basis.

In this program have a high discontinuation rate because employee paid on the basis of group performance and individual performance ignored and increasing organization level stress. In this process, individual performance ignored that leads to employee demotivation and dissatisfaction at work that lead to high discontinuation rates.

Goal sharing program refers to a variable pay plan and every employee in the group received the same percentage of rewards and employee productivity differentiation hard to analyze.

Supervisors never care about the good employees and biases practices inflow because of supervisors hold over the team that leads to high discontinuation in rates and dissatisfaction level in the team. As per personal experience, these practices lead to manager monopoly over team and facts about team never explained to top management that is the big reason for high discontinuation rates.

Profit-sharing programs refer to the company incentive plans based on company quarterly or annual profits and based on company profits shares distributed to employees.

Major things in this process need to well design and defined like how the profits will distribute, what parameter will use, how profits will reach to the bottom line of employees, and based on performance or somethings else will also measure.