FAQs
Is all gainsharing the same?
No. Gainsharing is a generic term used by a lot of companies to describe their system for sharing gains. Some companies feel gainsharing is a financial measurement to decide how much to share. Some companies see it as their way to raise employee attention and set multiple goals for improvement. Others see it as a system that either works or doesnít work. Any form of monetary exchange from compensation changes, basic incentives, retirement programs, piece rates, profit sharing and even discriminatory bonuses have wrongly been given the label of gainsharing over the years. If this is your question, the first thing you need to do is get educated on gainsharing--click the "Free Offer" link.

What is Jackson Gainsharing?
Jackson Gainsharing is a tool. A financial based, team oriented, pay-for-performance, target focused tool. The goal is expressed and the target is defined. Employees are informed in a timely manner as to results and they understand what is in it for them when the target is surpassed. The culture of the company will evolve using the scoreboard to communicate feedback to its employees while setting expectations for the future. Employees become eager to participate rather than sitting on the sideline as spectators. Everyone in the company is involved and there is one goal.

Is gainsharing different from profit sharing?
Most definitely! Profits belong to the people who took the risks and invested the money. Companies can earn profits from growth (increased volume) or productivity (doing it for less cost). When profits are made, they are paid to the stockholders or reinvested in the company. Sharing the profits reduces the profit amount for the stockholders. Some companies decide to share their good fortune with employees by sharing their profits. Most employees have no idea where the money came from or what they can do to increase it the next time. If next year there isnít more, then it must be the fault of management. It becomes an entitlement and is not a motivator. It can and is a nice thing to do for companies who want to share the success of the company and when partnered with gainsharing, can really make a difference.

Gainsharing measures productivity and shares the gain over a predetermined level between the employees and the company. As productivity improves, both the employees and bottom line profits share in the gains. When designed correctly, increases in gainsharing will add to the profits and it then becomes a win-win situation for employees and company.

Is gainsharing a substitute for other forms of compensation?
No! Compensation is what you pay employees for their time, effort, knowledge, experience, etc. All types of compensation (hourly rate, salary, incentives, piece rates, commissions, etc.) are guaranteed to individuals and it must be fair if you are going to hire and keep good employees. In a union shop, this type of guarantee is spelled out very specifically in the contract. On the other hand, gainsharing is not a guarantee. It is a team reward that is earned when the entire team working together achieves and exceeds a specified goal. Gainsharing is over and above normal compensation and is earned only when the total of all compensation and benefit costs for the team is below the targeted amount. Simply stated - compensation is pay for time worked. Gainsharing is a team reward for improved productivity.

When is the best time to implement gainsharing?
Now! As with any other management tool, when you are ready and committed to use the tool to achieve the desired results. In most every company, it takes time to learn how to use the tool effectively to get desired results. We have always felt that today is a good day to get started.

How can I afford to pay a bonus when my labor costs are too high already?
You canít! The first thing to realize is that what we pay employees and what they cost, are two different things. The objective of gainsharing is to motivate employees to focus on improvements so that output increases and their cost becomes less as a percentage of output. The objective should be to have the best and highest paid employees with a controlled labor cost.

How does gainsharing effect overtime?
We have found that when the gainsharing tool is used properly, the need for overtime is reduced. We have learned from employees that they are told, "Iíll pay you a premium if you have to work overtime." When they need more money, how long do you think it takes to figure out how to get overtime? We have found that money is the driving force; not the overtime. When productivity improves, the need for overtime diminishes. That does not mean it goes away entirely. Some overtime may still be necessary to keep up with a growth in demand. Gainsharing helps us show that overtime is bad if there is not an increase in output to offset the premium being paid. Employees only want to work more hours because they can make more money. There are only isolated cases where employees want to spend more time at work if they can get the money a different way. We need to show and communicate to them how they can make more money by being more productive. Gainsharing turns your employees into a team figuring out how to be more productive in order to make gains. Employees will figure it out to their advantage. With a reduction in overtime, both the employees and company gain.

Is gainsharing for the employees on the floor and not for the office employees?
Gainsharing is for everyone on the team! To maximize the effectiveness of the tool, all employees on the payroll must be part of the team. Each Jackson Plan is designed specifically for your companyís needs. Everyone must be focused and moving toward the same goal.

How does gainsharing fit with other improvement efforts?
Gainsharing compliments other programs, ie. TQM, Lean Manufacturing, Six Sigma, ISO 9000, etc. Employees want to make a difference when there is something in it for them. When you look at all these differing systems as tools for management, you realize that it takes more than one tool to address all the diverse problems we face every day. Think of the system you have in place as a wrench and gainsharing as an extension to give you more leverage to get the job done. If the only tool you have is a hammer, every problem looks like a nail.

Is gainsharing one of those programs that stops working after so long?
No! Gainsharing does not do anything. People do things. Gainsharing is a tool and must be used by management to obtain results. If a tool stops being used and is sat in the corner, it becomes ineffective. People who say gainsharing stopped working did not realize they had to use the tool and expected a program or a system to do the work. Employees want to know, ďWhatís in it for me?Ē With gainsharing, we must continually communicate to answer that question each and every time we do something or want something done. It is a proven fact that people will do just about anything for the right amount of reward. Management must use the tool for employees to have timely information as to how their efforts and actions can effect results.

How is W. M. Jackson & Co., Inc. compensated?
Excellent question! Obviously, we are in business to make a profit and we look at each of our clients as an opportunity for a partnership. However, in order to build a relationship, both parties must get to know one another. This knowledge covers culture, philosophy, commitment, and just plain one-on-one chemistry. Our on-site seminar gives the potential client a chance to evaluate us while at the same time, we are evaluating them. Our success and profitability is tied to the results and success realized by our clients from using a Jackson Plan. Our investment agreement is structured to have a minimal up front investment plus a performance bonus. The up front investment is an estimation of our costs and is invoiced in a number of monthly installments. The performance bonus is only earned when the goal is attained and a gainsharing payout is made to all employees. We are truly interested in your success because our success is tied to your success! At the on-site seminar, we will gather the information needed to produce a comprehensive, custom investment agreement.