What Is the Fundamental Difference Between Profit-Sharing and Gainsharing

question 262

Short Answer

What is the fundamental difference between profit-sharing and gainsharing?
Profit-sharing rewards employees based on the profit the company earns, while gainsharing rewards employees on the basis of productivity improvements.
Profit-sharing has been shown to be more motivating for employees than gainsharing.
Profit-sharing allows more specific measurement of improvements than gainsharing.
Profit-sharing focuses on group rewards, while gainsharing focuses on individual rewards.
Profit-sharing is used mostly by large companies, while gainsharing is used mostly by small companies.

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Definitions:

Attribution Biases

Refers to the systematic errors made when people evaluate or try to find reasons for their own and others' behaviors.

Criticizing Performance

involves providing feedback on an individual's work or actions with a focus on areas of improvement, aiming to foster development and enhance performance.

Vague

Lacking clarity or preciseness in thought or expression, resulting in ambiguity or obscurity of meaning.

Specific

Clearly defined or identified; particular and distinct.