What does an effective gainsharing agreement look like?

By Kimberly Rose

Gainsharing: The perfect compromise

Between the two more extreme unit budget models of use-it-or-lose-it and carry-forward sits an optimal middle ground: gainsharing. Under this approach, units split any budget surplus with the central administration.

This compromise method benefits both units and the institution, and combines the advantages of the two more extreme approaches. Because units retain a sizable portion of their surplus, they have an incentive to find cost savings and be better resource stewards. Likewise, because a portion of surplus returns to the center, the institution can grow much needed funds for larger strategic priorities.

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Structuring and Transitioning to Impactful Gainsharing

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