What Is the Scanlon Plan?

The Scanlon plan includes the following five basic elements: philosophy of cooperation, identity, skills, integration system, and sharing of benefits formula. Its core is to design a new type of labor relations and enterprise management system that promotes cooperation, participation and profit sharing.

Scanlon Project

The Scanlon Plan refers to the mid-1930s, the United States

1) Consistency This means that the organization should clearly articulate goals or tasks to employees, so that employees' participation is closely linked to the organization's goals.

2) Competence organization implements the Scanlon Plan to have a higher level of expectations of employees' capabilities. They believe that employees will have the need for change driven by the plan, and have the desire and basic ability to improve the work process.

3) Participation system In order for employees to better understand the recommendation process, the organization must set up special recommendation committees, and employees submit improvement suggestions to these recommendation committees, and the committee selects appropriate submissions to senior management decisions. Its functions are It is to grasp the actual operation and evaluation activities of the proposed plan.

4) The success of a fair organization is not the credit of an individual or a group, but is based on the joint efforts of employees, customers and investors, who will share the results of this plan.

The Scanlon plan has three of the most important characteristics:

First, emphasizing participatory management. Managers and employees should not distinguish one another, and give employees a sense of their own company, so that everyone understands that the increase in personal compensation is based on frank cooperation with each other, and Will company

The procedure for calculating the bonus in Scanlon is:

The first step is to determine the source of the increase in income. Usually, the savings in labor costs are used to indicate the increase in productivity, and the reduction in defective rate is used to indicate the improvement in product quality and the cost savings in production materials.

In the second step, the total amount of gains can be obtained by adding up the amount of increase in revenue from the above various sources of income increase.

The third step is to retain and make up for the previous period's deficit.

The fourth step is to determine the proportion of employees' sharing gains, and calculate the total amount that employees can allocate based on this proportion.

The fifth step is to calculate the ratio of the total gains that employees can allocate to the total wages of employees participating in this plan. The result of multiplying each employee's salary by this ratio is the amount of gain shared by that employee.

The formula is as follows:

Bonus = (unit

The Scanlon Plan is an application of this method, and is a labor plan widely adopted by many companies. This plan looks at:

1. The bonuses given to members of each organization must be proportional to their basic contribution to improving the efficiency of the company's work;

2. Establish a work improvement committee across organizational levels. This plan has had a huge impact on the nature of the personnel relationship between managers and workers and between workers.

In short, this plan encourages lower-level personnel to assume more responsibilities and share governance authority with lower-level departments.

The Applicability and Significance of the Scanlon Plan

The Scanlon Plan can be used for both the enterprise and a department. The more applicable departments are the production department and the sales department, especially the industries with leading cost control. All employees of the company, from managers to workers, from supervisors to The staff are involved in proposing ways to save costs and improve production and management. As employees become more involved in decision-making, their complaints are reduced accordingly, and their loyalty and satisfaction with the organization are increasing.