HRM 3420 Lecture Notes - Lecture 9: High Tech, Profit Sharing
10 Apr 2016
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Document Summary
Microsot ofered generous employee share plans where they would acquire signiicant holdings in the company to atract and moivate young dedicated employees. In some cases, the shares become worthless but microsot employees became millionaires. Gain-sharing plans: whenever employees in a work group are able to reduce costs or increase producivity, a porion of the resuling gains are shared among members of the work group. Scanlon plan: creates mechanisms for employee paricipaion in developing producivity improvements and that shares the inancial beneits of those improvements with the employee group that generated them. E. g. labour costs may be 50% of the sales value of producion. If workers lower this cost to 47%, they share the 3% producivity gain with the company. Scanlon plan shares are usually 25% for the company and 75% for employers. Modiicaion: including addiional costs besides labour b/c 1. Many possible cost savings don"t show up in labour costs e. g. reducion in material waste and 2.
