h3 My Presentation

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The scanlon plan provides a financialreward to employees for savings in labour

costs that result from their suggesions. It is not only financial incentive systems, but

also systems for participative management.

It embodies management- labour

cooperation, collaborative problem solving,team work, trust, gain sharing, open book management, servant leadership.



1. Identity

2. Competence

3. Participation

4. equity



Advantages of scanlon plan

Easy to implement

Easy to maintain

Disadvantages of scanlon plan

use of costly machines and automation makecontribution of labor less.

Target ration varies depending on the cost ofinput materials, sales value, capital/labor ratio

Costs of other inputs like material, capital, etc

are ignored in bonus calculation.



It is also known as share-of-production

plan(SOP)

It normally covers just production workersbut may be expanded to cover all

employees.

Committes are formed to evaluate theemployee suggesions

It uses a far less eloborate participatory

structure.



The financial incentive of the rucker plan

is based on the historic relationship

between the total earnings of hourlyemployees and the production value

that employee create.

For every 1% increase in production

value that is achieved, workers receive a

bonus of 1% of their total payroll costs



This technique is derived fromconsultative style of management.

Here the employees do not have scopefor participation or involvement, butmanagers in the process of improvingproduction and efficiency consult them.

Employees are offered bonuscompensation if that consultationprocess results in the organisationmaking profits.



Meaning

profit sharing refers to various

incentive plans introduced by businessesthat provide direct or indirect payments

to employees that depend oncompany·s profitability in addition to

employees· regular salary and bonuses.



Definition

According to international conference, 1899, ´profit

sharing is an agreement freely entered into by

whichthe employees receive a share, fixed in

advance, of the

profits.µ



1. Such payment does not constitute apart of total cost of company have

been calculated.2. It is a reward for collective effort and

efficiency and therfore, it is given to allthe categories of employees.

3. It is shared on the basis ofpredetermined agreement betweenemployer and employee

4. It is normally an annual feature.



5. The allocation of share of such profit is

generally on the basis of salary or salary-

cum service basis.6. Such payment is made to workers only

when profits exceeds a certain amount.



1. Cash payment plan

2. Deferred payment plan

3. Combination payment plan

4. Stock ownership plan



1. Stabilization of labour force

2. Realization of social justice

3. Improved industrail relations

4. Increased earnings for workers



1. Scheme is likely to fail

2. Solidarity of trade union may break

3. Management inefficiency

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