Gainsharing plans involve putting some portion of an employee's weekly pay at risk for the opportunity to earn incentives if the employee meets or exceeds his or her goals.

Question

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Gainsharing plans are incentive plans that engage many or all employees in a common effort to achieve a company's productivity objectives, with any resulting cost-savings gains shared among employees and the company. In an earnings-at-risk pay plan, employees agree to put some portion of their normal pay (say, 6%) at risk if they do not meet their goals, in return for the possibility of obtaining a much larger bonus (say, 12%) if they exceed their goals.

Gainsharing Plans Involve Putting Some Portion of an Employee's Weekly