Evaluating the effectiveness of a gainsharing programme for labour productivity improvement

Abstract

Orientation: Companies are faced with the challenge of promoting innovation for productivity improvement among employees. They create a work environment that promotes worker participation for productivity improvement. This sentiment underpins the concept of gainsharing.Purpose: This study evaluated the effectiveness of a gainsharing programme for productivity improvement in automotive parts manufacturing companies in South Africa (SA).Motivation for the study: SA’s labour productivity, in the manufacturing sector, is low when compared with Korea, the United States of America, Taiwan, Japan, France and the United Kingdom. Hence, this study focused on gainsharing, given the low labour productivity levels in the South African manufacturing industries.Research design, approach and method: The two automotive parts manufacturing companies that have adopted a gainsharing strategy participated in the study. A third automotive parts manufacturing company that has adopted the 360-degree performance appraisal system was included for comparative purposes. These companies operated in the eThekwini District Municipality in KwaZulu-Natal. Study objectives were achieved by collecting pre- and post-quarterly data for spoilage, absenteeism, capital investment and labour productivity.Main findings: Results established that gainsharing improves productivity and reduces spoilage and absenteeism rates.Managerial implication: The South African companies are encouraged to revise their reward philosophies and develop strategies, policies and practices that help achieve productivity goals and support organisational change.Contribution: Gainsharing is a desirable alternative as it contributes to raising the competence levels and productivity improvement of an organisation. As a comparison, the 360-degree performance appraisal does not have an impact on labour productivity.

Assessing the resilience of Brazil, Russia, India, China and South Africa economies following the global financial crisis

“…We further examined a variety of other fundamental works in the area, such as 'The wage-productivity theory of underemployment: A refinement' (Yotopoulos 1965), 'Productivity and growth in manufacturing industry: A reply' (Kaldor 1968), 'A productivity theory of wage levels -An alternative to the Phillips curve' (Kuh 1967), 'Productivity and growth in manufacturing industry: Some reflections on Professor Kaldor's inaugural lecture' (Wolfe 1968), 'Wicksteed's recantation of the marginal productivity theory' (Dorfman 1964), 'International spill-overs of knowledge and sectoral productivity growth: Some evidence for Canada and the United States' (Brecher, Choudhri & Schembri 1996), 'Lawrence R. Klein Lecture 1997: Needed: A theory of total factor productivity' (Prescott 1998), 'The effects of openness, trade orientation, and human capital on total factor productivity' (Miller & Upadhyay 2000), 'Productivity Measures Manual' (OECD 2001), 'How important are capital and total factor productivity for economic growth?' (Baier, Dwyer & Tamura 2002), 'The power of productivity : Wealth, poverty, and the threat to global stability' (Lewis 2004), 'The dual labour market theory and the informal sector in South Africa' (Uys & Blaauw 2006), 'Economic reform and total factor productivity growth in Indian manufacturing industries' (Kim & Saravanakumar 2012), 'Evaluating the effectiveness of a gainsharing programme for labour productivity improvement' (Zondo 2017) and 'The global value chain dimension of FDI flows in the agroindustrial sector of South Africa' (Bezuidenhout, Grater & Kleynhans 2018), among others.…”