The driving force in employee behavior rests on the self-interests of the individuals. Various management executives devise plans of increasing the motivation of the employees as means of maximizing on the productivity levels. This is centered towards tapping the creative spark through continuous improvements and gaining of the profitability within the organizations. One of the main means of achieving this is through incentives and bonuses. Some companies undergo gain-sharing methods to stimulate the marginal employee outputs improvements. Other methods include, measurement programs of piecework, employee stock ownership programs, and profit-based plans of bonus and production quotas. The effectiveness of the method used is determinant of the longevity of the employees in service, output and motivation levels. The Scanlon plan of gain sharing, places more emphasis on scrap reduction and quality.
The Scanlon plan as used in the Herman Miller Company combines leadership, employee participation and workforce education with a reward system according to performance. The employees in this plan are able to get the share of gains made after accessing the pre-established savings of costs. This is calculated according to the effort put by the individual employee (Drucker and Maciariello, 2008). The participation is based on formal employee status, reporting on the progress periodically and a formula of incentives is used. This type of plan was instituted in the early 19th century after the economic depression. With its success, the plan has been instituted over the years in small and large businesses alike.
Flexfab Engineering is an engineering firm that uses technological advancement in the assembly office metallic products such as storage cabinets, filing and the tower’s. The company uses a plan developed by W.M. Jackson in which, employee stock ownership plan is used to enhance motivation and incentives through profit sharing criteria. The mechanics of the bonus plan centers the incentives on the positioning of the employee in the company. It is aimed at increasing the stake and persuasive knowledge on the productivity with minimal costs for efficient productivity (Gilmore and Williams, 2009). It increases the self-interest from within the workforce as they are duly rewarded for their efforts, output and overall profitability.
The Scanlon plan enhances greater employee participation through higher involvement. This is because, the plan ensures that the employees are financially literate on the production terms of the company while increasing the quality of the furniture used and the output. Gilmore and Williams (2009) state that scrap reduction is achieved with minimal time delivery used in the customers’ access to the products. In comparison to the plan developed by W.M. Jackson, the latter is less confined to the quota system of ownership plans. The plan used in Flexfab Company only ensures that the high standards of the engineering metallic products are produced from time to time with the employees not loosing interest in their stakes as well as productivity.
Scanlon plan utilizes the human resource platform to keep the large workforce in the gain sharing programs as stipulated with the original benefits anticipated at the time of production. This helps in cost saving, measuring of the satisfaction within the workforce while improving the working climate where the employees operate. In comparison to the plan developed by W.M. Jackson, only the indexing of quality service is measured. Scrap reduction is not efficiently achieved since the quotas minimize the influence of the employees on profitability. In the latter, the workforce only determines their adverse results through emphasis on quality from their production efforts while creativity is not entirely utilized to the sufficient basis.
Scanlon plan places greater emphasis on scrap reduction through allowing of the employees to manage their interests with limited influence from the expertise. Unlike the plan developed by W.M. Jackson, Scanlon requires an open-source system. It is with the ease that scrap reduction is achieved especially with development and maintenance used as the focus of the management plan (Schonberger, 2007). It allows the engagement of the workforce and improving of organized performance. The employees receive their bonus payments, the overall percentage profitability is increased and retention is vital. The plan improves the business performance without attraction to new employees. Rather satisfaction is driven in part of the employees and the customers targeted. The plan developed by W.M. Jackson has a slight advantage on the minimal time used in implementing and maintaining it as compared to its counterpart. It also ensures larger companies can utilize the plan effectively.
of a company requires close collaboration with the workforce in all levels of production,
output and profitability measures. The employees on their part reinforce their
influence in the organization’s efforts through the motivation and incentives
received. On the part of the management, bonus sharing has growingly become a
source of motivation for increased performance from the workforce. This has
been focused on scrap reduction and improved quality of the products. Of the
two major plans, Scanlon plan emphasizes greater employee participation,
engagement, time delivery and financial literacy. The plan developed by W.M.
Jackson manages to appeal to bigger organizations with the relative ease of implementation
Drucker, P. F., & Maciariello, J. A. (2008). Management. New York, NY: Collins.
Gilmore, S., & Williams, S. (2009). Human resource management. Oxford: Oxford University Press.
Schonberger, R. J. (2007). Building a Chain of Customers. New York, NY: Free Press.
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