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Research Article

A Study on the Factors for Activating Gain-Sharing Plans and Their Effects

Lee, Hoseon · Kwon, Sunchil

Published: January 1998 · Vol. 27, No. 2 · pp. 291-307
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Abstract

The purpose of this study is to demonstrate that the degree of operational vitalization of gain-sharing plans in firms that have adopted such systems can enhance the actual effectiveness of plan implementation. From this perspective, the factors influencing the operational vitalization of gain-sharing plans considered in this study include the labor-management relations climate, the degree of vitalization of participatory systems, and characteristic variables of the gain-sharing plan itself. As outcome measures of gain-sharing plan vitalization, wage fairness and organizational commitment were examined. The data for analysis consisted of survey responses from 377 employees across 14 firms that had adopted gain-sharing plans. The results indicated that the labor-management relations climate and the degree of participatory system vitalization influenced the operational vitalization of gain-sharing plans, and differences in vitalization emerged depending on the characteristics of the gain-sharing plan. Specifically, employees perceived the highest degree of operational vitalization when the gain-sharing plan was introduced at the proposal of the labor union, when they believed the purpose of introducing the plan was to improve productivity, and when they perceived that production volume was used as the performance measurement criterion. Finally, employees' perceived wage fairness and organizational commitment were found to be influenced by their perceived degree of operational vitalization of the gain-sharing plan. Although there are some limitations regarding the variables and samples employed in this study, these results suggest that when introducing a gain-sharing plan, deeper discussion and review of operational implementation strategies are necessary to enhance the effectiveness of the system.