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The Frost-Scanlon Plan

Dr. Carl Frost dedicated his life to advancing principles of organizational research critical in maximizing the outcome measures of non-profit and governmental entities as well as myriad companies from Motorola to Herman Miller.


The Frost-Scanlon plan originated in the 1930s. As a worker for a steel mill corporation, Joseph Scanlon led labor-management relations. He was able to solve a conflict between union workers and management on the principle that cooperation is more productive than competition. Scanlon assisted the two sides in making an agreement: if the workers were able to increase productivity, they would in turn be awarded higher wages. This accomplishment led him to management within the company and later on to a role as professor at MIT.

Dr. Carl Frost worked with Mr. Scanlon at MIT. In 1949, Frost left MIT to teach Psychology at Michigan State University. In Michigan, Dr. Frost helped local businesses to incorporate the Scanlon Plan.

In 1968, eight companies that had worked with Frost formed the Midwest Scanlon Associates, which later became the Scalon Plan Associates. The association holds annual conferences.


The Frost-Scanlon Plan is founded on the principles of identity, equity, competence, and participation.

"To promote cooperation throughout the organization, the Scanlon Plan provides a financial incentive to everyone in the organization based on the performance of the total organization. Thus all members of the organization are encouraged to cooperate and share information about improvements." -The Scanlon Plan for Organization Development: Identity, Participation, and Equity by Carl Frost, John Wakely, and Robert Ruh


The Frost-Scanlon Plan recommends the formation of two commitees within an organization: a Production Committee and a Screening Committee.

The Production Committee consists of two members (one manager and one elected non-managerial employee) from each department in the organization. The organization meets once or twice a month to review suggestions on how to increase productivity and acts upon the suggestions made.

The Steering Committee includes a number of managers from different functional areas (e.g. engineering, sales, finance) and an equal number of elected non-managerial employees. The committee meets once a month to determine bonuses paid for good ideas that have led to increased productivity.




- Changing Forever: The Well-Kept Secret of America's Leading Companies by Carl Frost (1996)
- The Scanlon Plan for Organization Development: Identity, Participation, and Equity by Carl Frost, John Wakely, and Robert Ruh (1974)

- Scanlon Leadership Network