Hot 100

A million-dollar incentive plan

Two and a half years ago, the 325 employees who manufactured paper egg cartons at a Diamond International plant in Palmer, Mass., faced a cloudy future. Styrofoam containers were creating stiff competition, the recession was biting into profits, and with the American economy worsening, workers were suffering a bad case of unemployment jitters. Recalls Daniel Boyle, personnel director of the Diamond plant: "Relations between labor and management were strained at best."

Then Boyle, 35, devised a system of productivity incentives called the 100 Club. The results exceeded his wildest expectations. Today productivity at the plant is up 16.5%, and quality-related errors are down 40%. As of last year, worker grievances had decreased 72% and lost time due to industrial accidents 43.7%. The turn-around has meant more than $1 million in gross financial benefits for the parent company, a New York-based conglomerate that had 1982 sales of $781 million.

The Palmer plant's formula for success is disarmingly simple. Employees are allocated points in recognition of above-average performance. Any employee who works a full year without having an industrial accident is awarded 20 points; 100% attendance is worth 25 points. Every year, on the anniversary of the program's Feb. 2, 1981, launching date, points are totted up, and a record is sent to the individual's home. Upon reaching 100 points, the worker gets a light blue nylon jacket emblazoned with the company logo and a patch signifying membership in the 100 Club. Every one of the plant's employees has now earned a jacket.

Those who accumulate more than 100 points can receive additional gifts. With 500 points, employees can choose such items as a blender, Corning Ware, a wall clock or a pine cribbage board. Pointing out that none of the prizes is beyond the purchasing power of the workers, Diamond's management stresses that the real value is as a sign of appreciation from the company. "For too long, the people who have got the majority of attention have been those who cause problems," says Boyle. "The program's primary focus is the recognition of good employees."

That philosophy has in turn instilled an unprecedented sense of good will and optimism among Diamond's workers. According to a survey conducted before the program started, 65% of the plant's work force felt management did not treat them respectfully, 56% approached their work pessimistically, and 79% thought they were not being rewarded for a job well done. When the survey was repeated earlier this year, 86% of the employees said that management considers them important or very important, 81% felt that their work was recognized, and 79% reported that their work and product were of much greater concern to them.

Not surprisingly, labor relations have also improved. Even though employees were due a 58-c--an-hour wage hike this July, to an average of $8.53 an hour, they have agreed to forgo it because of concerns about competition. Labor leaders credit the 100 Club with keeping the company afloat and fostering a new atmosphere of cooperation with management. "Things have been tough," says Henry Sarrette, president of the local union. "But at least we are now in it together." Says Boyle: "I'm a little tired of all those Japanese success stories. What we've done here shows you can have American success stories as well." As a sign of that success, the 100 Club has been phased in at Diamond's three other fiber-product plants in Mississippi, California and New York. This file is automatically generated by a robot program, so viewer discretion is required.