The evolutionary development of a Scanlon Plan

Xaloy Inc.'s (Pulaski, Virginia) experiences in implementing a Scanlon Plan - a specific form of gainsharing - are traced. This evolution, which spanned 7 years, is explained in terms of what was done at each step, the reasons for each step, and the outcomes. It starts with the laying of the foundation of the plan in 1984 to 1985 through the exploration and development of the plan, from 1985 to 1986, and through 2 trial periods, from 1986 to 1989. From this experience, it is condluded that the design and implementation of a Scanlon Plan is based on incremental improvements. Organizational culture can be changed, but to do so requires a long-term commitment to integrity, trust, patience, and perseverance. Other firms that are considering setting up Scanlon Plans can anticipate some of the hurdles inherent in this process and may learn from this company's experience.