When the Baltimore county executive took office, he faced flat tax projections, low employee morale, and the continued citizen demand for high quality service. He looked to the private sector, and found an innovative alternative compensation program known as Gainsharing. Gainsharing is a pay for performance program that strives to accomplish three equally important objectives: (1) generate cost savings, (2) enhance employee morale, and (3) enhance customer service.
Gainsharing in Baltimore County capitalizes on the premise that frontline employees know their jobs better than anyone else does. When teams of frontline employees identify cost savings that maintain or enhance customer service and maintain or enhance employee morale, half of the savings are paid directly to the employees for two years.
Gainsharing also establishes an infrastructure that fosters empowerment and teamwork. Previous county administrators practiced top-down management; executive level leaders made all decisions, from strategic planning to day-to-day purchasing, solely on the advice of the top management team. The alternative foundation of Gainsharing is training. Beginning at the top of the organization, Gainsharing staff train upper-level executives, mid-level and frontline supervisors, and design teams consisting of frontline employees. Courses cover team building, problem solving processes, and sophisticated decision-making tools. Outside employees are also trained to function as facilitators, whose purpose is to tap the team’s creativity through the completion of goals, and help with written and oral proposals.
County employee teams not only have the support of their facilitator, but also that of two important groups, the Technical Advisory Group (TAG) and the Executive Advisory Group (EAG), not previously accessible to frontline employees. The Technical Advisory Group is skilled in reviewing proposals for technical merit. The Executive Advisory Group reviews proposals specific to functionality, with representatives from budget, human resources, law, information technology, and procurement.
This infrastructure was created to break down the barriers of a culture that has existed for approximately 140 years. It provides a venue for employees to have more say regarding how they perform their work. Once employees have completed the proposal cycle, there is a marked shift in their perception of their ability to make a difference and the willingness to make the effort to do so. With the support of the county executive, Gainsharing enables employees to overcome some organizational obstacles and come forward as a team to present and implement solutions.
The single most important achievement of the program to date is the ability to positively change a culture that has developed over the past 140 years. Previously, employees were not encouraged to think creatively; they were expected to simply perform a job. The Gainsharing program provides an infrastructure that encourages employees to come forward with creative ideas that promote positive change. More specifically, Gainsharing has helped employees believe they have the ability to make a difference. This belief has encouraged 12 design teams, representing approximately 900 employees, to develop 14 proposals. These proposals will save money, enhance customer service, and improve employee morale.