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To introduce a conceptual model for increasing the likelihood that gainsharing plans will be successfully implemented.

The literature on gainsharing plans is rich in descriptions of how individual cases were successful or unsuccessful owing to various situational variables. Research on the effects gainsharing plans have on organizational effectiveness is much needed. The present paper builds on current research by providing a general model of factors that determine whether a particular gainsharing effort will increase organizational effectiveness. A review of the empirical literature provides support for the model presented.

Gainsharing can be an important and successful intervention for many organizations. The keys to success are involving all stakeholders in the development of the plan, developing an easy to understand formula for sharing gains, maintaining transparency, and ensuring that the plan's goals are in line with the organization's goals.

Develops a conceptual model which can be used by many organizations in an attempt to use gainsharing as a means to increase organizational effectiveness. Considerations for future research are discussed.

Examines the organizational implications of innovative reward structures, with particular reference to gainsharing. Focuses on exploring beyond the impact of compensation on productivity and profitability, which are essential considerations in designing a compensation scheme. Explores the connection between compensation and organizational development – the ways in which incentives and rewards contribute to improved utilization of human resources and capabilities within organizations. Assesses the relationship between gainsharing and organizational development, with particular attention to features such as work design, employment relationships, structure, culture and workplace attitudes and behaviour. Rounds off the discussion with a look at several examples of firms which have introduced innovative compensation schemes, to determine what lessons can be drawn from their experiences. Concludes with an assessment of the strategic calculations that should inform decisions about introducing innovative compensation schemes, especially gainsharing.

Productivity gainsharing plans may well experience a resurgence as firms attempt to meet the competitive challenges posed by the new global marketplace. This qualitative ethnographic research investigates the particular problems one US firm experienced when it implemented a Scanlon productivity gainsharing plan. It is argued that such plans should not be treated as simple quid pro quos for collective bargaining concessions because they necessarily pose significant impediments to the maintenance of the status quo. Successful implementation requires both a sound programme structure, especially concerning the bonus formula, and a change in the organisation′s culture whereby all employees are able to participate meaningfully in the decision‐making process.

The moderate Mexican labour cost has been the key incentive for the relocation of US production operations in Mexico. This co‐operative operational programme, known as “production sharing”, has developed in the US/Mexico border zone and in designated regions of the Mexican interior. This programme is also known by the common Spanish name of maquiladora (meaning “contract milling”) industry. Ironically, one of the most neglected factors of production in the maquila industry is labour management. Until recently, human resource management has been executed with minimal consideration to labour costs. American corporations desperately jockeying for global market share soon realized that by attending to and restructuring Mexican manufacturing operations, management would then be able to place the firm ahead of the competition. Restructuring is an essential part of progressive management but can hinder production and reduce profitability if poorly implemented. Restructuring by downsizing can have detrimental effects on the organization, especially in Mexico where cultural, political, and legal considerations favour the employee. In the past downsizing has proven ineffective for many corporations. The management of human resources in Mexico presents an extraordinary challenge to the American manager. A downsizing model has been designed with the American maquiladora manager in mind. The model was formulated by accommodating the Mexican cultural and legal phenomena.

Gainsharing systems offer the possibility of all stakeholders being equally committed to the wellbeing of an organization and sharing fairly in its success. Argues that such schemes can work in practice if a few basic rules are followed and if the scheme is sufficiently simple to be open and transparent to all those stakeholders. Includes the outline of a simple scheme which demonstrates the basic concepts.

This paper aims to answer the question: how do clients and BPO service providers work together to foster dynamic innovation? Dynamic innovation is a process by which clients incent providers to deliver many innovations each year that improve the client's performance in terms of operational efficiency, process effectiveness and/or strategic impact.

The paper is based on research conducted in 2011 and 2012 and includes 202 survey responses and 48 in-depth interviews in 24 client organizations.

The most effective innovation incentives are mandatory productivity targets, innovation days, and gain-sharing at the project level. Threat of competition and special governance arrangements for innovation also positively influence innovation. The least successful incentives for innovations were found to be innovation funds, gainsharing at the relationship level, what has been called “pain-sharing”, and benchmarking.

The 24 BPO relationships do not represent a random sample, but rather a convenience sample. The authors aimed to understand emerging best practices from high-performing BPO relationships, thus the paired interview samples are purposefully biased towards higher-performing relationships.

Delivering innovations requires a process the authors call AIFI – acculturating, inspiring, funding, and injecting. The research finds that leadership pairs are key drivers of the dynamic innovation process. Leadership pairs jumpstart the dynamic innovation process by starting with innovation incentives. Even so, just having one right leader makes a positive difference. The positive difference is stronger if that leader is on the client side rather than the provider side. With no right leaders, the practices that the authors describe are less efficacious but still have positive impacts on the levels of innovation experienced.

In the ITO and BPO literatures, researchers have under-examined the more strategic drivers of outsourcing, including innovation. This research examines the process and practices that deliver dynamic innovation in client organizations.

A major house‐building corporation in the United States employed an organizational change and development (OCD) strategy during the early 1970s to assist its transformation to a mega‐corporation. The outcome was the development of an autocratic, machiavellian, coercive management style. Initial financial success during a growth phase in the construction industry masked the deficiencies of the approach, which only became apparent during an economic slump. Provides a lesson for managers who ignore the participant needs of employees.

Although gainsharing is an old organizational development intervention, the literature has not sought to provide an integrative framework for its study. The purpose of this article is to provide a review of its conceptual perspectives, organizational theory, and design to meet the need of such future research.

A ward‐winning US company NYF has doubled its sales over the past three years and enjoyed massive growth thanks to a new program based on teaming and gainsharing. The privately‐owned distributor of electronic hardware, assembly components and mechanical fasteners achieved New Jersey’s Silver 2002 Governor’s Award for Performance Excellence by evolving an empowered team culture that makes employees want to work well and use their initiative.