This qualitative analysis examines the effects of gainsharing on both productivity and employee engagement in the British Columbia pulp and paper industry. The pulp and paper industry plays an important role in the provincial economy by contributing four billion dollars annually and employing over 10,000 workers in high-pay unionized jobs.However, the industry has seen a significant decline in the past ten years in the number of facilities operating , which has reduced employment and ultimately tax revenue in the province. The economic importance of the pulp and paper industry highlights the need for unions and management to work together. Management must engage the human capital of its employees in order to achieve a competitive advantage in the global market.Gainsharing is a means to increase productivity; more importantly, it is a method of facilitating a cooperative relationship between unions and management. This cooperative relationship not only increases productivity, but also significantly reduces labour relations costs while promoting a sense of satisfaction, loyalty and commitment within the employees .In this project, I develop a model explicitly outlining the impact of gainsharing within the pulp and paper industry. I test the model by reviewing and summarizing existing literature. The results are strongly supportive of the positive impact of gainsharing on productivity, reduced labour relations costs, employee engagement and profitability. I present recommendations for the application for government involvement, which can contribute to the success of this process, thus contributing to the success of the pulp and paper industry.------------------------------Page2