Improshare is “Improved Productivity through Sharing” and was coined by Mitchell Fien. Improshare is a type of group bonus that is gained depending on the productivity of the team. Productivity is measured through amount of output produced in a given time period. The bonus amount depends on both employees who contribute directly and indirectly to the output.
The bonus is calculated by finding the difference between standard working hours and actual hours to produce the required output and divided by the actual hours. The employers and the employees share 50-50% of the bonus. The employees 50% is split between all the members in the team that contributed towards productivity improvement.
An advantage of this method of bonus is that it promotes team work and collaboration, resulting in positive group dynamics as well as increased productivity for the organization. Furthermore the employees are aware that they will receive the bonus if they finished their work quicker, hence improving efficiency as well as reducing the cost of production.
However the drawback is that it only focuses on the reduction of cost of production and does not consider reduction in other types of cost. Hence those employees involved in other cost savings will not be benefited by the Improshare system.