Benefits in turning employees into partners

Benefits in turning employees into partners

Some few posts ago, in the article I named “Tips about Shareholding in an entrepreneurship” I wrote about how a company should be valuated and how the shareholdings should be divided among the different partners. Thereby I took into account owners and investors but also other partners that only some companies include: employees. This is a misfortune because the benefits are greater than the disadvantages, but only few companies have realized this. Next I will explore this subject with much more depth than in the mentioned article.

One of the greatest benefits of becoming employees into partners is that their motivation will increase. I think that everyone, even the people who don’t want to become entrepreneurs, at some point dream to own a company. Thereby if the company owners link their employees to the business in an additional way that with a labor contract they will feel as if they are part of it and that they own it so their dream will become true. In this case they will maintain their motivation high and their ideas to leave the company would die or at least diminish.

Other of the reasons comes hand to hand with motivation and is creating a greater commitment to valuable employees. When a person has a labor contract he must perform a task in exchange for a wage. However he will not always go further because his commitment goes to the best of his contract. By contrast if the employee is part of the company he will understand that he must give the best of his work so that the company and him are benefited.

The last reason I want to mention is retaining human talent. When the only relation between a person and a company is a contract he can leave the business in an easy way. Even though many companies have been trying to create an excellent environment for the employees in order to retain talent, this is not always true. This is the reason why making employees partners creates an additional link between them and the company so they won’t leave it easily.

The last thing I would like to do in this post is to show some thing I’ve seen in the entrepreneurial world. First I consider that in this model it is not necessary to give away a great portion of shares to employees. It is enough to save a small portion to give away between employees. In a second place I don’t think that all employees should access to this benefit. Only employees that show reasons why they should be retained may access to this benefit. Finally I want to mention that many models exist to grant this benefit: a fixed percentage, a percentage according to results or a mixed model that includes both patterns.

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