Productivity Bonuses and Profit Sharing Motivate a Team

Whatever kind of recognition and incentive program a company decides to use,it takes support from the top to succeed — especially when return on investmentis the name of the game, CultureWorx consultant Smithson says.

    At Behlen Manufacturing Co. in Columbus, Nebraska, there’s no question that the boardroom buys into incentives for its employees. The company capitalizes on employee involvement and offers cash incentives, gain sharing, and profit sharing. Gain sharing is a monthly bonus based on productivity, and profit sharing an annual reward based on profits. The result is tremendous employee loyalty and productivity, says chairman and CEO Tony Raimondo. “Our employees are all in the business fight with us, so our theme is ‘Make the company better off, and we will share.'”

    He cautions, however, that sharing the fruits of a company’s success with its employees is not just an incentive program but also a way of life. Leadership truly has to believe that the company and everyone in it will be better off or it won’t work. “I see a lot of CEOs who simply are not comfortable with that, and I don’t think they should do it, because the employees are very smart, and the whole baseline is trust and respect.”

    Behlen manufactures livestock equipment; grain storage, drying, and handling systems; and building systems at several plants from Cullman, Alabama, to Baker City, Oregon. The company’s incentive system begins with a program called Awareness Is Money, which awards a minimum of $250 a month to an employee with the best idea about how to improve safety and productivity. The real bonus comes when the ideas are implemented and production increases. Depending on productivity, all employees also are participants in gain-sharing or productivity-sharing teams that can earn monthly bonuses of up to 12 percent of a person’s base pay, Raimondo says. Teams typically are made up of 10 to 30 people who participate in a product process from start to finish — such as manufacturing a building beam. Office employees as well as factory workers participate in the program.

    Behlen’s profit-sharing plan is a further incentive. During a good year, for example, employees might receive 140 hours of pay as a cash bonus just before Christmas.

    The programs are dedicated to creating participatory production environments rather than more traditional authoritative work cultures, Raimondo says. “We are always searching for ways to add value to customers. We think the key is the employees. If they share in the rewards, they will take better care of the customer.”

Workforce, June 2001, pp. 111-112 —  SubscribeNow!