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Clean Up Spotty Productivity by Gainsharing (Part 1 of 2)

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Photo: ©iStockphoto.com/Hiob

Mariah E. de Forest |

EVANSTON, Ill. — By focusing on the cultural values of their growing foreign-born Latino workforce, drycleaning plants and laundries can boost productivity, lower per-unit costs and better meet ever-stiffer customer demands.

Most drycleaners have tried to motivate their workers for better productivity—with varying degrees of success. Those with mainly Mexican or Spanish-speaking workers find “gainsharing” gives them more productive employees and a greater competitive advantage. Why? Latin cultural traditions meld closely with gainsharing values.

WHAT IS GAINSHARING?

Gainsharing is a group pay-for-performance program. Worker performance is quantified and given a dollar value. When workers top a threshold pre-set by management, they can earn a bonus. Employees receive half the value of their better performance, and the company, the other half.

So for every dollar paid to workers for better performance, a drycleaner saves a like amount through higher productivity (less overtime), improved quality (less waste and fewer customer returns) and better safety (lower workers’ compensation costs). No sense of entitlement results, since employee bonuses must be re-earned each short gainsharing period.

Appeal to Latino Culture

For drycleaners and laundries with diverse workforces, a group pay-for-performance program succeeds because it incorporates four aspects of traditional Latino culture:

  • Tradition of working together in collaborative (social) groups
  • Social value of mutual support and collaboration
  • Acceptance of authority, and preference for specific work goals and instructions
  • Positive response to incentive pay plans that reward performance immediately

As a group bonus plan, gainsharing strongly appeals to Latin culture by emphasizing both group cooperation and incentives. It promotes cooperation among workers of all backgrounds. By fostering the need to work cooperatively with other workers, no matter their ancestry, gainsharing offers all employees the opportunity to become meaningful members of a workforce, and partners with management in productivity improvement.

Since successful gainsharing plans rely on employee and supervisory suggestions for working smarter rather than harder, care must be taken to encourage group participation in Spanish.

Profit sharing and 401(k) plans are designed to motivate and reward workers for successful company performance by giving them a personal financial stake in its future. However, most drycleaners find neither profit sharing nor 401(k) lead to greater worker efforts toward better quality and productivity now because workers do not equate their daily efforts today to a payout at the end of the year, or upon retirement.

Tomorrow: How gainsharing avoids the drawbacks of profit sharing and 401(k) plans…

About the author

Mariah E. de Forest

Imberman and De Forest Inc.

Vice President

Mariah E. de Forest is vice president of Imberman and De Forest Inc., a national human resources consulting firm. She can be reached via e-mail at IMBandDEF@aol.com.

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