HRMG 4405: Scanlon Plan Assignment: Objectives: Understand Scanlon Plans Be able to calculate labour / SVOP ratio based on historical information Be able to calculate payouts Instructions: Read Chapter 11, including the section on Scanlon Plans (p. 251). Complete the following: $ 20 million $5million Base year data: SVOP: Total wages: Period just ended data: SVOP: Total wages: Period just beginning: forecast data: SVOP: Total wages: $15 million $4 million $24 million $5 million What amount is available for payout for period just ended? What amount is estimated to be available for payout for forecast period? SCANLON PLAN ventives are den des sales res PLANS Scanlon plans are designed to lower labour costs without lowering are derived as a function of the ratio between labour costs and sales value of product revenue and the value of goods in inventory Tollstate how these two figures Scanlon plan, consider Exhibit 11.10 Costs without lowering the acl of a firm's activity To illustrate how these le of production (SVOP 26 The SVOP figures are to derive incentive under a Scan WBIT 11.10 Example of a Scanlon Plan DATABASE YEAR) Sales value of production (SVOP) $10,000,000 Total wage bill $4,000,000 $4,000,000+ $10,000,000 -0.40, or 40% Total wage bill + SVOP OPERATING MONTH (MARCH) SVOP $950,000 Allowable wage bill 0.40($950,000) - $380,000 Actual wage bill (August) = $330,000 Savings $50,000 $50,000 available for distribution as a bonus. la practice, the $50,000 bonus in Exhibit 11.10 is not all distributed to the workforce. Rather, 25 percent is distributed to the company, 75 percent of the remainder is distributed as bonus, and 25 percent of the remainder is withheld and placed in an emergency fund to reimburse the company for any future months when a negative bonus" is earned (i.e., when the actual wage bill is greater than the allowable wage bill). Any excess remaining in the emergency pool is distributed to workers at the end of the year un form than Scanlon nlan for determining worker HRMG 4405: Scanlon Plan Assignment: Objectives: Understand Scanlon Plans Be able to calculate labour / SVOP ratio based on historical information Be able to calculate payouts Instructions: Read Chapter 11, including the section on Scanlon Plans (p. 251). Complete the following: $ 20 million $5million Base year data: SVOP: Total wages: Period just ended data: SVOP: Total wages: Period just beginning: forecast data: SVOP: Total wages: $15 million $4 million $24 million $5 million What amount is available for payout for period just ended? What amount is estimated to be available for payout for forecast period? SCANLON PLAN ventives are den des sales res PLANS Scanlon plans are designed to lower labour costs without lowering are derived as a function of the ratio between labour costs and sales value of product revenue and the value of goods in inventory Tollstate how these two figures Scanlon plan, consider Exhibit 11.10 Costs without lowering the acl of a firm's activity To illustrate how these le of production (SVOP 26 The SVOP figures are to derive incentive under a Scan WBIT 11.10 Example of a Scanlon Plan DATABASE YEAR) Sales value of production (SVOP) $10,000,000 Total wage bill $4,000,000 $4,000,000+ $10,000,000 -0.40, or 40% Total wage bill + SVOP OPERATING MONTH (MARCH) SVOP $950,000 Allowable wage bill 0.40($950,000) - $380,000 Actual wage bill (August) = $330,000 Savings $50,000 $50,000 available for distribution as a bonus. la practice, the $50,000 bonus in Exhibit 11.10 is not all distributed to the workforce. Rather, 25 percent is distributed to the company, 75 percent of the remainder is distributed as bonus, and 25 percent of the remainder is withheld and placed in an emergency fund to reimburse the company for any future months when a negative bonus" is earned (i.e., when the actual wage bill is greater than the allowable wage bill). Any excess remaining in the emergency pool is distributed to workers at the end of the year un form than Scanlon nlan for determining worker
