The publication analyzes and describes how incentive reward schemes like gainsharing offer a way in which to improve U.S. productivity and raise workers' wages. The paper details the types of gainsharing plans currently in use, focusing on the measured productivity and wage advances experienced by firms using these plans. The analysis shows that firms can achieve significant and sustained productivity increases, raise the real wages of workers, and improve firm performance through gainsharing. Evidence shows that when used in combination with employee involvement, the benefits from gainsharing can be further enhanced. The paper also examines how the current Fair Labor Standards Act (FLSA) often impedes the adoption of gainsharing in American workplaces.
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About the Author
Anita U. Hattiangadi is an economist with the Employment Policy Foundation (EPF). EPF is a research and education foundation that provides policy makers and the public with the highest quality economic analysis of labor and employment issues. EPF seeks to encourage an employment policy framework that will facilitate economic growth, job creation, job security, and a rising standard of living for a growing population.
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