What are the business benefits?
5. What are the business benefits?
A business that can make this system work will outstrip all its competition. A society that can do so will enjoy untold wealth.
Increased profits. Businesses that tie employees’ rewards to company performance, and let employees make decisions, out-perform competitors. Incentive transforms motivation. Automation, technology and customisation will be welcomed as money makers rather than resisted as competitive burdens.
Well-managed employee ownership increases profits, and if profits rise, so does the value of the company. And, if the shareholder safeguards make the shares more tradable, then their value rises further.
Tax-savings. Paying dividends is more tax-efficient than paying salaries. Governments can, and will, increase income taxes and social security taxes, because their citizens are a captive market. But they can’t increase corporation taxes so easily without alienating investment.
Loyalty and teamwork. Employee owners are more likely to stay, and to encourage their colleagues to stay.
Paying dividends from profits means that employees work for each other and, if necessary, police each other. If the system works well, it will make more tightly-bound teams that think and coordinate better.
This might not be pure benefit: excessive loyalty, culture, and affinity, may have the potential to blinker people to business problems. Possibly also to the wider moral outlook, although wider ownership is likely to spread the feeling of moral responsibility since it is powerlessness
What are the employee benefits?
More pay. A business can do better if it ties rewards to performance and gives employees more power over day-to-day running. Higher profits mean higher dividends (pay) for employee owners.
An asset in the business. If profits rise, the value of the employee’s shares rises. If the employee’s shares rise in value, he takes so many with him when he leaves.
Job security. A more profitable business is less likely to make employees redundant.
Teamwork. Employees are working for each other. A lot of rubbish is talked about teamwork, but done well, and voluntarily, it can make work a pleasure.