How Seta Corp. reduced its labor fulfillment costs by 45 percent.

By Reported Donna Loyle

Here’s how OMIP works: The company tracks its total payroll costs on a monthly basis and determines its actual cost per package. The cost then is compared against a standard, and any resulting cost savings is split with the managers on a 65/35 (company/managers) basis, says Holody (see the above chart “Operations Management Incentive Plan”). “You can’t successfully incentivize your line workers without doing the same for managers,” he explains.