– Create a win-win situation for employees and the company
The best way to invest corporate profits is to give them to the employees.
In a Nutshell
Companies offering a share of their profits to employees is old news. Many organizations pool a percentage of their profits and divide them between employees as year-end incentives. However, there is a lack of clarity on why certain employees receive certain levels of incentives. Nothing about the incentive received through the profit-sharing model is personal. And when it isn’t personal, people find it difficult to feel motivated to go over and beyond their routine responsibilities.
On the flip side, when companies choose to help employees align their self-interests with that of the company; when managers regularly follow-up with their team members and help them achieve the goals they set for themselves; and when the leadership recognizes and rewards people for achieving those goals, it makes employees feel personally connected with the success of the company.
When employees understand company financial data and figure out ways in which they can individually impact the bottom line, it creates a win-win situation for everybody involved. And, of course, the strategic benefits for the company cannot be ignored either: When employees feel confident enough to place their bets on their employer succeeding, the management can negotiate to minimize its expenses on fixed salary payments by offering bigger bonuses.
Also, companies can retain their agility during crises; avoid having to lay off people to lose some of the financial burden during downtimes; and keep the churn rate to a minimum. Simply put, rewarding people for their results is the best way to create a consistently successful company.