What are the most favorable conditions for SBP?

The most basic condition for success is that there is a wide range (in depth and or breadth) of skills, knowledge, or competency for employees to acquire and use in their jobs. SBP pay plans tend to be more effective in settings such as manufacturing, where the skills, knowledge, and competencies are relatively concrete and easy to assess. Capital‐intensive technologies (usually process technologies, such as chemicals, paper and food processing) are favorable because the cost of design errors matters less— employee pay usually is a small part of total costs. The use of a high involvement or an advanced lean organization design is favorable because either design requires a high level of employee skill and flexibility, leading to a positive ROI for SBP.

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