Gainsharing plans have been in existence since the late 1930s when the Scanlon Plan was implemented by Joseph Scanlon at the Empire Steel and Tin Plate Company of Cleveland. Since that first implementation, gainsharing has spread to encompass 15% of American corporations with over 500 employees (N.Y.S.E., 1982 cited in Gowen, 1990).

Changemasters, Inc. (CMD) is a small, public-sector, research and development organization. CMI has had a gainsharing system in place since 1987. Over the years CMI's gainsharing system has been altered and modified to incorporate the experiential learnings in the areas of motivation, compensation management, and gainsharing. This study documented the evolution of CMI's gainsharing system and evaluated it to determine whether or not it was meeting the desired goals of the program. The study found the CMI gainsharing plan to be effective at fostering organizational profitability/budgetability, employee retention, quality of work life, morale, information sharing, and organizational reward sharing. Recommendations aimed at enhancing CMI's gainsharing system were also presented.