Table of contents
1. Employee Participation - A Small Guide in Four Parts
For many companies today, it is the greatest challenge to maintain good Find employees and durable to the company to bind . In an open (corporate) culture, I am therefore increasingly experiencing the question: "Can't I motivate my employees, as the driver of success, with a company investment? In the best case, even turn the employee into an entrepreneur? Does employee participation even increase the value of the company? „
So what are the possibilities of employee participation and especially employee participation and what could such an approach look like for your company? In this article, I shed light on four-part series the Motivation , the Analysis before the actual decision. the Implementation options, To involve employees directly or indirectly in the company's success and in the end go to the increasingly popular form of Option models and virtual participations one. Hopefully, this will help entrepreneurs who run their company as a GmbH as a small guide.
2. The motivation – turning the employee into an entrepreneur?!
The following principle already applies in companies I meet:
"If the company is doing well, the employee should also be doing well".
In many companies, performance-related bonus payments for the past financial year beckon at the beginning of the year. But entrepreneurs are increasingly asking themselves whether this is the right approach? Many have doubts as to whether this purely monetary remuneration Business goals supported and also has a long-term effect? Can employees be motivated in the long term by this? What, for example, if the "regular" payment is smaller or even completely in bad times? Will this lead to resentment and perhaps to employees leaving the company? Furthermore, it is becoming increasingly difficult to recruit employees and retain them in the long term.
So it's no wonder that prudent entrepreneurs are looking for alternatives and asking themselves whether direct employee participation can make sense. So is there a better solution? What about employee participation? Unfortunately, there are still few scientifically sound studies on this in Germany. But if you look at the USA, where the participation culture has a different status, you can certainly find good reasons for stakeholder participation. In addition, there are studies that seem to prove that conventional "incentives" do not lead to an increase in performance. At least not always when problem solving and creativity are in the foreground.
If you want to take a closer look at the effect of bonus systems, I recommend the following (somewhat older) TED Talk video as an introduction:
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More information2.1 Example of Stakeholder Participation (T-Mobile USA)
A good example of a different kind of stakeholder participation was provided by T-Mobile USA. In 2016, the American offshoot of Deutsche Telekom decided to make what I consider to be a clever move. Every customer with a monthly mobile phone contract received one share of the mobile service provider, as a "loyalty bonus". The stock was worth $43 at the time, which is about the value of an average monthly mobile phone bill ( see also Handelsblatt of 7.6.2016 ).
What had happened here?
The customer was not only "gifted" with a stake in his service provider. Rather, he became a "direct" participant and thus also a participant in the future success of T-Mobile USA. As a participant ("shareholder"), will you change your mobile phone contract just because the competing offer is cheaper?
Unfortunately, there is no scientific study on the success of this measure, but what can be verified is the economic success of T-Mobile USA in the following years. In the year of the measure 2016T-Mobile USA's revenue amounted to USD 37.2 billion with 71.5 million customers in the year 2019already USD 45 billion with 86 million customers. The share price had more than tripled to $148 as of June 2021, an increase of 244%. In my eyes, this action – to involve the customers in the company – had a share in this success that should not be underestimated.
From one day to the next, T-Mobile USA is no longer just any mobile phone provider that I change as soon as there is a cheaper competitor offer. Rather, I remain loyal to him and hope to benefit from his success in the future. This approach made me think a lot at the time, because what works for customers must apply all the more to employees? After all, an employee "invests" a large part of his or her life in the company.
2.2 Does employee ownership increase the value of the company?
So does employee participation increase the value of the company, as happened in the example of T-Mobile USA with regard to customers? At least this is the conclusion reached by Alex Edmans , Professor of Finance at the London Business School in his book: "Grow the Pie – How great companies deliver both purpose and profit".
In a chapter he examines the How salary incentives work and concludes that an increase in the value of a company correlates with salary incentives if they are
- comprehensible
- simple
- and in the long term
are. All of this applies to a company investment. In addition to management and executives, he also recommends from his studies: "Fairness can be addressed by giving stock to all colleagues , not just executives, allowing them to share in any value increase that they help create." I am also convinced: Employees are motivated and retained by participation approaches.
Company examples from public publications
Some examples of companies and entrepreneurs who have had experiences with employee ownership can be found in public brochures, such as
3. What do you have to do and what forms of employee participation are there in Germany?
Despite these political efforts, however, in Germany, in contrast to our neighboring countries the Netherlands or the UK, there is still no general Employee participation culture and participation , so there is no scheme x to follow. Because of this, companies have no choice but to analyze their own situation with all its advantages and disadvantages.
Other business leaders are increasingly thinking like me and are thinking early on about how they can best involve their employees in the economic success of the company and increase employee motivation. My goal is therefore to give a brief overview of the possibilities and especially the steps before implementation.
Blog Series on Employee Participation
4. Employee participation to hear? Podcast contributions on the topic!
We are happy to find out what a cooperation can look like and how we can do it for you in a free and non-binding introductory meeting.
Duration: 30 min.
