A comparative investigation into the applicability of gain-sharing programmes for the improvement of productivity in the automotive sector of South Africa

Productivity has generated tremendous interest among economists. South Africa lacks both short and long-term growth in productivity. This includes commitment and participation in productivity initiatives at shop floor level and companies are faced with the challenge of promoting competition and innovation in productivity improvement amongst employees. South Africa’s labour productivity, in the manufacturing sector, is low when compared to Korea, the United States of America (USA), Taiwan, Japan, France and the United Kingdom (UK). It has increasingly been recognised, that by introducing a carefully crafted incentive scheme, it may be possible to induce South African workers to work both harder and smarter using existing technologies in new and better ways to enhance their productivity. Gain-sharing could be an appropriate method as has been the experience of industry in the USA and parts of Europe. The literature review defines gainsharing is a formula-based company-wide programme that provides for employees to share in the financial gains of a company as a result of its improved performance. It is a monetary reward that helps boosts a company’s productivity and radically reduces the cost of waste, spoilage, rejects, and rework. It can be used to replace bonus piecework schemes where quality is lost to quantity. The study focuses on gainsharing, given the low productivity level in the South African automotive parts-manufacturing industries. It is a comparative study and investigates the applicability of gainsharing programme for the improvement of productivity in this sector. Study objectives were achieved by examining the production and related experience of Company A and COMPANY B. These two automotive parts-manufacturing companies have adopted gainsharing strategy. The second objective of the study assessed whether gainsharing or other control variables are responsible for company productivity improvements. The research established that gainsharing improves productivity and reduces spoilage and absenteeism rates. Employees and management have gained confidence on gainsharing programme. Participants feel that de-layering, trade union participation, company age, ongoing training and equipment upgrade also play an important role in productivity improvement.

Author dc:creator

• Zondo, Robert Walter Dumisani

Advisors dc:contributor.advisor

• Nel, K.A.
• Contogiannis, E.
• Kaseeram, I.

• Productivity improvement
• Gain-sharing

Licence

• https://devspace.unizulu.ac.za/bitstreams/36c376d6-89ca-4f1d-ba14-5165861a660f/download