The Effects of Improshare on Productivity

Abstract

Analyzing 112 responses to a 1988 questionnaire sent to all known users of IMPROSHARE, the author estimates the effects on productivity of this gain-sharing plan, which is being used by a growing number of companies. The data indicate that IMPROSHARE has led to significant increases in productivity. The median productivity increase was about 8% in the first year, and the cumulative productivity gains had risen to 17.5% by the third year, after which they began to level off. The mean productivity increases were even greater than the median increases and followed a similar pattern. The author finds that a sizable portion of the gains reflects reductions in defect and downtime rates, and that firm size was inversely related to productivity gains.