Gainsharing is providing to a company’s entire workforce cash incentives that are keyed to quality and productivity gains. For example, suppose a company has a target of reducing the number of defective units by 10 percent during the next quarter for a particular plant. If the goal is achieved, the company estimates that $ 1,000,000 will be saved (through avoiding such things as reworks and warranty repairs). Gainsharing provides an incentive by offering a bonus to the employees equal to a percentage of the cost savings, say 20 percent.