Home   >   CSC-OpenAccess Library   >    Manuscript Information
Team Based Gainsharing Program Implementation In A Polycarbonate Lens Factory Indonesia
Milind Gadre, Michelle Yit
Pages - 44 - 64     |    Revised - 08-10-2021     |    Published - 20-12-2021
Volume - 0   Issue - 0    |    Publication Date - December 20, 2021  Table of Contents
Gainsharing, Key Performance Index, Lens Manufacturing, Indonesia.
Manufacturing factories often use gainsharing (collective performance rewards to incentivize their employees) as a tool to improve performance measures and goals. In this study, a team-based gainsharing program was adopted by a polycarbonate lens manufacturing company to meet its objective of increasing productivity and improving profitability in Indonesia. To test the effectiveness of a gainsharing program in improving Key Performance Indicators (KPI), a quantitative method is used for collecting and trending KPI results against gainsharing payouts. The KPI and calculation of gainsharing payout was set by the factory management. Data from the factory was collected and tabled on a monthly basis for a period of six (6) years. The early stages of the study were met with challenges and the initial outcome was not receptive. The criteria and incentives in the program were then re-evaluated and revised with total buy-in and active participation from the management. Empowerment and team-based training, outbound team outings, conflict resolution workshops with internal and external stakeholders were conducted. The hypothesis was proven correct where gainsharing did have a positive impact on meeting KPIs. In meeting the improved KPIs, the gainshare amount from the program was paid out. The findings support earlier studies. The changes made, in the context of a collectivist society, were the percentage payouts which were different for departments were merged into one single payout for all. This study confirmed when there is a good alignment between gainsharing and performance measures put in place, the gainsharing program could succeed. The collectivist element consideration, clear communication, stakeholders’ involvement, and the factory management willingness to do some tweaking and revision to the gainsharing program made this study a success. The factory management enjoyed the benefits of gainsharing; it was able to attract and retain talents and its gross margin grew by 87%.
Aguinis, H., Joo, H., & Gottfredson, R. K. (2013). What monetary rewards can and cannot do: How to show employees the money. Business Horizons, 56(2), 241-249.
Benson, A., &Sajjadiani, S. (2018). Are Bonus Pools Driven by their Incentive Effects? Evidence from Fluctuations in Gainsharing Incentives. Industrial and Labor Relations Review, 71(3), 567-599.
Black, J. S., Bright, D. S., Gardner, D. G., Hartmann, E., Lambert, J., & Laura, M. L. (2020). Organizational Behavior. VitalSource Bookshelf, OpenStax. Retrieved August 14, 2021 from https://bookshelf.vitalsource.com/books/9781947172722.
Chapman, R., Murray, P., & Mellor, R. (1997). Strategic quality management and financial performance indicators. International Journal of Quality & Reliability Management, 14(4), 432-448.
Chinomona, E., Popoola, B. A., &Imuezerua, E. (2017). The Influence of Employee Empowerment, Ethical Climate, Organisational Support and Top Management Commitment on Employee Job Satisfaction. A Case of Companies In the Gauteng Province of South Africa. Journal of Applied Business Research, 33(1), 27-42.
Conger, J. A., & Kanungo, R. N. (1988). The empowerment process: Integrating theory and practice. Academy of Management,The Academy of Management Review, 13(3), 41.
Cortes, H., Daaboul, J., Le Duigou, J., &Eynard, B. (2016). Strategic Lean Management: Integration of operational Performance Indicators for strategic Lean management. IFAC-PapersOnLine, 49(12), 65-70.
Cristofaro, M., Giardino, P. L., & Leoni, L. (2021). Back to the Future: A Review and Editorial Agenda of the International Journal of Business Research and Management. International Journal of Business Research and Management (IJBRM), 12(1), 16-33.
DeMatteo J. S., Eby L.T., & Sundstrom, E. (1998). Team-based rewards: current empirical evidence and directions for future research. Research in Organizational Behavior, 20, 141-183.
Fadal, S. (2004). Employee empowerment as a business optimization technique: Utilizing continuous training and development, participation rights and decision-making authority. (Publication No. 3116954) [MBA dissertation. Argosy University] ProQuest Dissertations Publishing.
Garbers, Y., &Konradt, U. (2014). The effect of financial incentives on performance: A quantitative review of individual and team‐based financial incentives. Journal of Occupational and Organizational Psychology, 87(1), 102-137.
Gordon, J. (2021, June 25). Gain Sharing Plan – Explained. What is a Gain Sharing Plan? Retrieved August 14, 2021 from https//:thebusinessprofessor.com/employment-law/gain-sharing-plan-definition.
Gross, S. E., & Duncan, D. (1998). Case Study: Gainsharing Plan Spurs Record Productivity and Payouts at Ameri Steel. Compensation & Benefits Review, 30(6), 46-50.
Hamilton, B., Nickerson, J., &Owan, H. (2003). Team Incentives and Worker Heterogeneity: An Empirical Analysis of the Impact of Teams on Productivity and Participation, Journal of Political Economy, 111(3), 465-497.
Hermawan, A. (2005). Analyzing Variations in Employee Empowerment in Indonesia. Scholar.google. Retrieved August 14, 2021 from https://scholar.google.com/citations?user=bGDog2YAAAAJ&hl=en.
Hofstede Insight. (2018). Country Comparison What about Indonesia. Hofstede-insights. Retrieved August 14, 2021 from https://www.hofstede-insights.com/coumtry-comparison/indonesia,the-uk,the-usa.html.
HR Guide. (2015). Compensation: Incentive Plans: Sharing. hr-guide. Retrieved August 14, 2021 from https://hr-guide.com/data/G443.htm.
Kretzschmar, R., &Magno, C. (2016) Pulling together: Team-based performance sharing. Nursing Management. 47(4),14-15.
Lakshminarasimha, A. (2017). A Concept Note on the Relationship Between Empowerment, Collaboration and Selected Outcomes in a Supply Chain. IUP. Journal of Supply Chain Management, 14(3), 26-48.
Lencioni, P (2012). The Advantage Why Organizational Health Trumps Everything Else in Business. Jossey-Bass.
Lencioni, P. (2002) Overcoming the Five Dysfunction of a Team. Jossey-Bass.
Liker, J.K. (2004). The Toyota Way: 14 management principles from the world’s greatest manufacturer. McGraw-Hill.
Long, R., & Shields, J. (2010). From pay to praise? Noncash employee recognition in Canadian and Australian firms. International Journal of Human Resource Management, 21(8), 1145-1172.
Oguz, C., Kim, Y. W., Hutchison, J., & Han, S. (2012). Implementing lean six sigma: A case study in concrete panel production. [Conference presentation] 20th Conference of the International Group for Lean Construction, IGLC 2012, San Diego, CA, United States.
Pehawaria, R. (2001). Too Many Bosses, Too Few Leaders: The Three Essential Principles You Need to Become an Extraordinary Leader. Free Press.
Peters, T. (2009). Service – Internal customers matter a lot! The little big things with Tom Peters. Enterprise Media.
Research and Markets (2012, March 6). Eye Care in Indonesia: market size, market share, leading brands and distribution data. Businesswire. Retrieved August 28, 2021 from https://www.businesswire.com/news/home/20120306006701/en/Research-and-Markets-Eye-Care-in-Indonesia-market-size-market-share-leading-brands-and-distribution-data.
Rhee, S-Y., & Welbourne, T. (2006). Employee Behavioral Change Under Gainsharing: The Effects of Gainsharing Satisfaction. Researchgate. Retrieved August 28, 2021 fromhttps://www.researchgate.net/publication/228139390_Employee_Behavioral_Change_Under_Gainsharing_The_Effects_of_Gainsharing_Satisfaction.
Rothaermel F. T. (2017). Strategic leadership: managing the strategy process,Strategic Management 3e. 3rd edition, McGraw-Hill.
Roy, M.H., & Dugal, S.S. (2005). Using employee gainsharing plans to improve organizational effectiveness. Benchmarking: An International Journal, 12(3), 250-259.
Rynes, S., Gerhart, B., & Minette, K. (2004). The Importance of Pay in Employee Motivation: Discrepancies Between What People Say and What They Do, Human Resource Management, 43(4), 381-394.
Sciacovelli, P. (2018). How to use team rewards effectively, compensation and benefits. Scienceforwork. Retrieved August 28, 2021 from https://scienceforwork.com/blog/how-to-use-team-rewards-effectively/.
VillazĂłn, C., Sastoque Pinilla, L., Olaso, J., Toledo, N., &Lacalle, L. (2020). Identification of Key Performance Indicators in Project-Based Organisations through the Lean Approach. Sustainability, 12(15), 59-77.
Zondo, D. (2017). Evaluating the effectiveness of a gainsharing programme for labour productivity improvement, Acta Commercii,Independent Research Journal in the Management Sciences,17(1), 1684-1999.
Mr. Milind Gadre
Hoya Vision Care c/o, School of Business Management, Institute Technology Bandung, Jakarta, 12950 - Indonesia
Miss Michelle Yit
School of Business Management, Institute Technology Bandung, Jakarta, 12950 - Indonesia