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Goal-sharing Plans

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Ben Nobleman

on 18 March 2014

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Transcript of Goal-sharing Plans

Single-goal Plan

Multigoal Plan

Financially Funded Plans
Types of Goal-Sharing Plans
Goal-Sharing Plans
Simplest type of goal-sharing plan

Focus attention on one key goal (IE: customer satisfaction)

Can cause employees to neglect other important behaviors
Single-Goal Plans
Similar to single-goal plans but more complex
Focus attention on several key goals (IE: Customer satisfaction, general sales goals, and specific product sales goals)
Can cover a range of desired behaviors
Multigoal Plans
Combines two sets of criteria;
1) The total amount of goal-sharing bonus available to the organization
2) The actual amount of payout awarded to each individual
Motivational issues with this type of plan are common due to lack of certainty in reaching and recieving goals
Financially Funded Plans
Define the group to which goal-sharing applies
Decide on the nature of the goals to be sought
Determine levels and time frames for goal achievement
Establish bonus amounts
Decide how to split the bonus among employees
Issues In Designing Goal-Sharing Plans
Goals and goal-sharing bonuses can
be adjusted as circumstances require
Goals can be tied to specific objectives/behaviors
Greater flexibility, applicability, and less complex/costly than gain-sharing plans
Company retains 100 percent of gains below the bonus target
Powerful motivational tool
Encourages collaborative work efforts towards groups goals, reducing need for supervision
Encourages knowledge sharing
Goal levels and bonus amounts can appear arbitrary
Less continuity than gain sharing
Difficulty in establishing realistic and equitable goals, causing low instrumentality
May motivate the wrong behaviors
Free-rider issues
May cause frustration if efforts fall slightly short
No incentive to surpass goal
High discontinuation rate
Sears Goal-Sharing Program
Real World Functionality
Common issues in designing goal-sharing plans

Advantages of goal-sharing plans

Disadvantages of goal-sharing plans

Sears Goal-sharing program Youtube clip
Full transcript