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UBC Theses and Dissertations

A study of the applications of gainsharing incentive plans in the Canadian mining industry McDonald, Douglas J.

Abstract

Increased competition in the mining industry has demanded that companies focus on their operations to minimize the costs of production. While there are many strategies being used to lower costs, employee incentives that attempt to tap the human resources are becoming more prevalent. This research focuses on the applications of one of these human resources incentives in the mining industry: Gainsharing. In the mining context, gain sharing combines a group based bonus system that covers virtually all employees and is based on parameters over which they have control, with an appropriate communication network and management structure. The mining environment is conducive to gainsharing plans; in deed, gainsharing has many advantages over more commonly used incentives like piece-rate production bonuses and profit sharing plans. Currently, five percent of the operating mines in Canada use gainsharing plans, while six percent use profit sharing plans and 30% use piece-rate incentives. Surveys returned from five Canadian mines and two U.S. mines with gainsharing plans indicate that in all cases there were increases in productivity, and in all cases the mines are satisfied with the plans. However, despite the positive results, in some cases the plans are not structured and implemented in the way dictated by both experience with the plans in other industries and the characteristics of the mining industry. After thoroughly explaining the gainsharing concept and exploring the structure and results of the plans used at the mines participating in the survey, this research provides recommendations which will improve the effectiveness of gainsharing applications in mines.

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