Original Research

The impact of gainsharing in the automotive parts manufacturing industry of South Africa

Robert W.D. Zondo
South African Journal of Economic and Management Sciences | Vol 21, No 1 | a1773 | DOI: https://doi.org/10.4102/sajems.v21i1.1773 | © 2018 Robert W.D. Zondo | This work is licensed under CC Attribution 4.0
Submitted: 01 February 2017 | Published: 10 April 2018

About the author(s)

Robert W.D. Zondo, Faculty of Management Sciences, Durban University of Technology, South Africa


The majority of South Africans expect greater prosperity that can be accomplished through greater employment, high productivity and wage increases. Increased productivity can finance higher wages without burdening the customer with higher selling prices. Consequently, there should be strong co-operation between management and labour to improve productivity, thereby ensuring the survival of South African companies. To achieve this objective, organisations find themselves turning to their employees for creative suggestions and ideas on better ways of doing things. This sentiment underpins the concept of gainsharing. Gainsharing is a formula-based company-wide programme that offers employees a share in the financial gains of a company as a result of its improved performance. This motivation boosts a company’s productivity and radically reduces the cost of waste, spoilage, rejects and rework. This study examined the impact of a gainsharing programme on the improvement of labour productivity in the automotive parts manufacturing sector. The study investigated the production and related experience of two automotive parts manufacturing companies (referred to as A and B in this study) that have adopted a gainsharing strategy. The two companies operate in the eThekwini District Municipality in KwaZulu-Natal. It assessed if gainsharing is responsible for company labour productivity improvements. The investigation was achieved by collecting pre- and post-gainsharing quarterly data for spoilage, absenteeism, capital investment and labour productivity. Gainsharing improves labour productivity and reduces spoilage and absenteeism rates. In order to maximise performance, a comprehensive performance policy must be developed, which aligns pay (and other incentives) to performance. The study uncovered the strengths and weaknesses of gainsharing for labour productivity improvement in South Africa.


absenteeism; automotive parts manufacturing companies; capital investment; employee involvement; gainsharing programme; labour productivity; number of workers involved in production; spoilage


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Crossref Citations

1. Exploring the interdependence between gainsharing and performance evaluation in a credit union,
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Revista Contabilidade & Finanças  vol: 32  issue: 87  first page: 398  year: 2021  
doi: 10.1590/1808-057x202112270