Scanlon Plans

Much written about the Scanlon Plan is wrong.  This article and support materials will help you understand where the academicians and consultants get it wrong and more importantly will help you get it right.  The following quotes are by authors and consultants who understand the Scanlon Plan.


Scanlon believed that the typical organization did not elicit the full potential from employees, either as individuals or a group.  He did not feel that the commonly held concept that the "boss is boss and a worker works" was a proper basis for stimulating the interest of employees in company problems; rather, he felt such a concept reinforced employees' beliefs that there was an "enemy" somewhere above them in the hierarchy and that a cautious suspicion should be maintained at all times.  He felt that employee interest and contribution could best be stimulated by providing the employee with a maximum amount of information and data concerning company problems and successes, and by soliciting his contribution as to how he felt the problem might best be solved and job best done.  Thus the Scanlon Plan is a common sharing between management and employees of problems, goals and Ideas--Leisur and Puckett.


Scanlon plans unlike most gainsharing systems include gainmaking as well as gainsharing.  Scanlon Plans are high involvement, high engagement systems. 


If you really want to partner with your such model is the Scanlon Plan and it is one of the best kept organizational secrets for successful employee involvement, through equity and responsibility sharing.  Ray Dupont in the Art of Partnering


Scanlon Plans are the original "Open-Book" systems.  Scanlon Plans unlike most gainsharing systems include the wide sharing of company information.


While many individual companies are now taking the values-and-vision approach, one group of companies is worth mentioning because they have management for many years.  The Scanlon Companies area a federation of organizations that pioneered employee involvement processes long before it dawned on the rest of the business world."   Schuster, Carpenter, Kane  in the Poweer of Open-Book Management


Scanlon Plans require Servant Leaders for their successful implementation and maintenance-most gainsharing systems do not require any changes in leadership.


We were warmed as a family is warmed by good news when we embraced the Scanlon Plan as the way to manage the company.   Hugh DePree in Business as Unusual


Scanlon Plans are integrated into an Organization's continuous improvement system.  Most gainsharing plans have nothing to do with continuous improvement, lean, six sigma, etc. (See article download)


The Japanese took Joe Scanlon's ideas concerning worker involvement and the human side and the ideas from W. Edwards Deming, who looked at quality in production.  Now people are adopting Japanese management techniques without knowing that many of them were Scanlon's ideas.  Warren Bennis


Scanlon Plans have over 60 years of proven success behind them.  No other gainsharing system can claim these results.


100 percent of all firms with Scanlon Plans report they are having a positive or very positive impact on productivity.  Scanlon Plans produce the most consistent pattern of high ratings.  People, Performance and Pay


Scanlon Plans are implemented participatively using a proven Roadmap and an internal design team.  Those who are going to live with the system-design the system.   Most gainsharing systems are installed by consultants or compensation professionals.


The process begins as a company wide exploration.  It is uniquely developed, accepted, and implemented in each company.  It is ongoing.  It involves all employees.  It is integral to all of the organization's functions.  Carl Frost in Changing Forever


Watch this video from Wescast Industries.  It shows the energy behind the Scanlon Roadmap Process of design teams, voting, etc.

If the Scanlon Plan is so great.  Why have I not heard about it before?


Scanlon Plan--One of the best idea of the last 100 Years-Training Magazine



Frequently Asked Questions about Scanlon Plans


I have read that Scanlon Plans only work in manufacturing organizations.  Is that true?

No.  Scanlon Plans originated in manufacturing organizations and there are more examples in manufacturing than any other sector, but they have been successful in all types of organizations, including hospitals, financial services, retail, telecommunications, union, non-union, for profit, non-profits, public sector, etc.  Please look at the Scanlon Plans below from Beth Israel Hospital, Watermark Credit Union, and Sears for nonmanufacturing examples.

I have read that Scanlon Plans use a formula for gainsharing that includes sales and labor hours.  We want to measure quality and other factors for our bonus.  Does that rule out Scanlon?

No.  This is the greatest myth about Scanlon Plans.  They have never been financial formula driven.  They are participation/involvement/engagement driven.  Scanlon Plans have used a wide variety of ratios, and formulas to define Equity for gainshairng.  Profit Sharing, Goal sharing, and no financial incentive at all have all been used in Scanlon Plans.

Scanlon Plans seem too complicated.  Our consultant says we can have a gainsharing system in a few days.  Why all the fuss?

Scanlon Plans create information sharing and high involvement cultures designed for gainmaking as well as gainsharing.  It is easy to share but much harder to create gains.  Sharing without knowing how the gains are created is not sustainable.

Does Scanlon believe that money is the ultimate motivator?

No.  Even though Scanlon has gainsharing it is not just about using money to motivate.  Human motivation is more complex.  Download Beyond the Bucks, Banners and T-Shirts

I thought Scanlon Plans went the way of the Hupmobile?

Scanlon Plans have been around since the 1940's and did not "tame the machine for liberty and democracy."  They did lead the way, however, for more humane and effective organizations and they still are used by high performance servant led organizations.  Check out ELGA Credit Union--the most recent Scanlon Organization.

My Consultant has his own state-of-the art system--why use something so old as Scanlon?

Scanlon is proven and has been extensively researched at the Massachusetts Institute of Technology (MIT) and Michigan State University (MSU).  Case Studies have been published by the World of Work (American Compensation Association) and Association for Manufacturing Excellence as well as medical journals, etc.  Scanlon is also open-source meaning you do not have to pay for a consulant's trade mark.  Many consultants simply repackage Scanlon methods and sell them as their own.

Our leader is not a servant leader.  Can Scanlon still work?

Scanlon Plans have been installed in places with every kind of leadership style and philosophy but if you really want a culture where information and responsibility are shared, and where everyone is pulling in the same direction you need sustained supportive leadership.

What is Frost/Scanlon and EPIC?

Dr. Carl Frost worked with Joe Scanlon at MIT and brought Scanlon ideas to MSU.  Dr. Frost created the four EPIC Principles based on Joe's work. To learn more about Carl Frost click here.  To learn more about Joe Scanlon click here.

Articles, Research and Workbooks on the Scanlon Plan to Download


Exploring Scanlon


Gainsaring and the Scanlon Plan


40 years of Scanlon Plan Research


Scanlon Principles Lay Groundwork for Lean


Beyond the Bucks, the Banners and the T-Shirts


Download Actual Scanlon Plans


Spring Engineering I.C.E. Plan


Sears Licensed Business Unit, Altus Plan


Beth Israel Hospital, Prepare 21 Plan


Watermark Credit Union, EPIC Plan



 Scanlon Leadership Network Movie about the Scanlon Plans that were at Herman Miller, Donnelly, Bridgestone/Firestone and Neelon Castings.  Explains the Frost/Scanlon EPIC Principles



Video of the Sears Scanlon Goalsharing Plan