In 1994, deregulation of the electricity industry led to increased competition and SCE needed to change its compensation policies to meet the more commercial realities of the marketplace. As part of the major revisions, an old salary-grade system, with 3200 job titles for 9000 employees, was abandoned and revised with a broad-banded system which has only 170 titles. Another large change was the introduction of a gainsharing arrangement. Employees were invited to sacrifice 5% of their basic salaries in return for up to 10% gainshare if the organisation met its savings and profits targets. 100% of employees agreed to this proposal and most joined in the process of generating ideas to save money. As a small example, employees agreed to wash their own overalls. The outcome was that the scheme generated an estimated $96 million and $40 million was paid out to employees. More important, the scheme played its part in getting employees focused on what was important in working cost-effectively and being involved in designing effective working methods.

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