What is an Improshare Plan? A Comprehensive Legal Overview
Definition & Meaning
An Improshare plan is a type of gainsharing program that rewards employees based on productivity improvements. It uses a mathematical formula to compare a baseline of performance"established from past production records"with actual productivity over a specific period. When actual productivity exceeds the baseline, employees receive a share of the savings generated. This plan primarily focuses on labor costs and is designed to be straightforward, making it easy to implement and understand.
Legal Use & context
Improshare plans are commonly used in labor relations and human resources management. They fall under the broader category of gainsharing plans, which are often utilized in various industries to incentivize productivity. Legal professionals may encounter these plans when advising companies on employee compensation structures or negotiating labor agreements. Users can manage their own gainsharing agreements with the right forms, such as those provided by US Legal Forms, which are drafted by qualified attorneys.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A manufacturing company implements an Improshare plan. If the baseline for producing 1,000 units is 100 labor hours, but the actual time taken is 90 hours, the company shares the savings from the 10 hours saved with employees as a bonus.
Example 2: A service provider uses an Improshare plan to measure productivity in service delivery. If the baseline for completing a project is 50 hours, but the team finishes it in 40 hours, employees receive a bonus based on the time saved. (hypothetical example)