Zebulon City’s Gainsharing in Public Organization

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Gain sharing is the process of giving rewards to the employees of an organisation depending on their contribution to the achievement of the goals of the organisation. The private sector uses criteria that depend on the monetary gains of the organisation in gain sharing planning. The magnitude of gains in a private organisation can be determined by the profit it makes. Thus, for a private organisation, gain sharing is easy to implement. In contrast, achievements in the public sector cannot be gauged by consideration of monetary gains alone. Achievement of public goals by a public organisation is also a part of gains by the organisation. Often, the criterion for gain sharing in the public sector is complex, and needs meticulous planning.

One important aspect of gain sharing is that it mainly involves employees. Employees have to be involved in the actual mathematical calculations that generate the final ratios that are subject to implementation in the final phase of the gain sharing process. This is necessary to win the trust of the employees, and have them believe in the gain sharing process. While gain sharing relies on the magnitude of gains, a problem arises where the magnitude of one aspect of the gains, such as production, is disproportionately bigger than other important aspects such as sales. This particular example is for an organisation aiming at increasing production and financial gain simultaneously. For this situation, the management and the employee fraternity must devise a criterion for gain sharing in order to make the process meaningful and effective. Moreover, it is imperative that the gain sharing plan be fair to all stakeholders.

Gain sharing seeks to reward collective effort rather than favour any individual input. However, for any collective gain to be realised, individual effort has to be incorporated in strategic action. This means that although individual contributions are not directly considered by the gain sharing plan, they are important for the realisation of collective gains by the whole organisation. Thus, gain sharing is a complex concept, particularly when it involves organisations that have multiple goals in addition to financial gain. On the other hand, the gain sharing plan has to be simple enough for all members of an organisation to understand. The formulas used must be simple enough to clearly explain the proportions in which the gains are distributed. Although multiple factors have to be considered while implementing a gain sharing plan in some organisations, too many formulas and criteria lead to contradictions and failure of the gain sharing program. This means that the formulas used must take all significant factors into consideration without invoking unnecessary complexity.

Zebulon, a small town in the state of North Carolina, implemented a gain sharing plan for a public organisation. The Research Triangle, the organisation in question, had fifty employees only. The plan for gain sharing in Zebulon was fairly complex since it had to consider individual contribution, financial projection, general opinion of the community, and the degree of achievement of organisational goals. However, the major factor that was considered in formulation of the gain sharing plan in Zebulon is the financial projection. In the Zebulon plan, expenditure was the major determinant of the amount of gains to be shared. In this regard, the difference between expenditure and the projected expenditure was obtained mathematically. Five percent of that amount was then used for gain sharing. Prior to institutionalisation of gain sharing, annual increase in remunerations was justified by increase in the cost of living and the phenomenon of perpetual economic inflation. Later, gain sharing was introduced to ensure that increase in remuneration became sustainable. Consequently, with the use of gain sharing as the preferred method for rewarding employees, there were no remuneration increases when the difference between expenditure and the projected expenditure was a zero or a negative figure.

Formulation of gain sharing plan in Zebulon requires the authorities to conduct research work in the town to establish the opinion of the public. Through the survey, volunteers for departmental committees are accepted. These committees help develop focus of the gain sharing plan, and develop questionnaires for their departments. A survey is carried out using questionnaires attached to conventional household bills. Data is analysed by the town’s administration and the results are sent to their respective departments. Managers are then able to establish weaknesses in their respective departments. The town council and the administrator determine the groups that are eligible for consideration in the gain sharing plan. However, the town’s administration protocols require that various departments support each other to avoid consistent performance disparities. This is also intended to increase their collective efficiency.

While departments are evaluated collectively, individual performance of employees in the town’s departments is also taken into account. Every employee is required to reach a certain threshold performance rating to be eligible for inclusion in the gain sharing process. Employees with a rating below the specified minimum are not considered in the gain sharing process. Furthermore, the ratings are made public. Consequently, employees whose rating is below minimum may suffer negative publicity.

In one research project to establish the effectiveness of the gain sharing plan, employees answered a questionnaire intended to capture their opinion on the degree of their control over the gain sharing process. The process should ideally have employee control. Through this survey, the success of the gain sharing plan was also assessed. Of the thirty interviewees involved in the assessment of the gain sharing plan, twenty-five responded. They were of the opinion that they had a good understanding of the process of gain sharing in Zebulon. However, they pointed out that their influence on the plan was minor albeit present. According to the employees, the gain sharing plan was controlled by the management. Their opinions were considered but declined without enough justification. In addition, the employees considered the gain sharing program to have a minor effect on the performance of the towns departments.

The process of gain sharing in Zebulon had some strengths and weaknesses. One of the strengths of the gain sharing plan is that the town administration tried to involve the people of the town in the process. These people are the major stakeholders. Surveys were also conducted among the employees, and their opinion over how the process should be conducted was sought. This is an important part of formulation of a gain sharing plan. Through such surveys, the employees can be involved in the gain sharing process. It is important to have the employees control the gain sharing process. The use of collective entities such as departments in the gain sharing process was also an important feature. It helped the gain sharing planners avoid awarding employees on the basis of individual performance. Furthermore, the departments were obligated to help each other in their work in order to ensure balance in the gain sharing process. It is also important that the employees were happy with the specific award for the particular year. This indicates that the employees were likely to be motivated.

On the other hand, the gain sharing process in Zebulon lacked a significantly influential employee contribution. The decision to ignore their suggestions by departmental managers impaired their ability to influence the gain sharing process. In addition, the final survey indicated that the employees felt that they were not adequately involved in the formulation of the gain sharing plan. Moreover, the town’s administrator decided to do the survey analysis alone, and did not include the departmental managers and the employees. This action may have prevented other parties such as the employees and departmental management from giving important contributions. The decision to make the performance ratings for all employees public may also be retrogressive. Some employees may feel embarrassed by such exposure, and consequently be demoralised. Finally, the use of expenditure alone as the basis for planning is likely to exclude other important aspects of gains in the organisation.

It is important for the programme to be independent from remuneration increment targeting increasing cost of living. This will make the program fair. Communication between the employees and the management needs to be improved. This will make sure that the employees’ contribution is taken into consideration. In addition, the employees’ ratings should be confidential in order to sustain a good working atmosphere. Zebulon’s gain sharing program is implemented once a year. If the plan was extended to cover the whole year, it would raise awareness of the need to perform well throughout the year among the employees.

Zebulon’s gain sharing program was fairly successful. The employees expressed their satisfaction with the award for the specific year. Moreover, they attested to their participation in the formulation of the gain sharing plan albeit in a minor role. A few corrections to the plan formulation can streamline the gain sharing plan for effectiveness to the satisfaction of the employees.

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