Summary

How can an employee participate in the company’s activities and decision making? There are several forms of involvement through which a worker’s opinion can be heard for promotion of his/her or company’s overall benefit:

Direct participation: an employee has an opportunity to participate in making decisions on issues related to company day-to-day activities;

Indirect or representative participation: an employee engages in indirect representation through persons or organizations representing employees which have an influence on work-related issues.

At national level, in case of problem situations, the employee can contact a trade union of his own industry, which is representing and defending social and economic rights and needs of members.

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An excellent example at international level is the European Works Council. Explaining it in simple terms, the European Works Council is an organization representing employees working in a company operating in several Member States. The cross-border management of company informs and advises representatives of the European Works Council on the situation in the company, its development and any important decisions that may have a significant impact on the company’s employees. The European Works Councils are set up in European Union-wide companies and European Union-wide enterprise groups.

Find more information on the European Works Council here: http://ec.europa.eu/social/main.jsp?catId=707&langId=en&intPageId=211

Employee financial participation is a system based on an agreement between the employer and the employee that together with salary and other direct benefits the employee receives in one way or another also a part of the profit and /or other benefits of the company.

Primary goal of the employee financial participation is to raise interest of employees in improving the company’s (organization’s) performance. Employee financial participation is implemented at the work place (in company/organization). Employee financial participation is a part of the employee involvement system. Employee financial participation is most often organized as a participation in distribution of an additional gain (improvement of expected result) or profit, when the employer gives the employee benefits beyond the normal salary depending on the company’s work results and / or gives the opportunity to acquire the shares. Employee financial participation is usually implemented in capital companies, it is less likely in other organizations (state and municipal institutions).

Employee financial participation has different models that can be grouped in practical applications:

  • upon the role of the model in the employee financial participation process (in terms of financial accumulation, ownership and acquisition of shares);
  • upon the motive of granting additional payment (bonuses, salary accumulation, profit participation or additional payments in shares);
  • upon employee participation in the capital and management of companies (with / without acquisition of capital shares);
  • upon the way of acquisition of the shares (their offer for free, as a substitute for the stock or the offer of purchase);
  • upon term: medium and long term.

Find more information on employee financial participation here: http://edz.bib.uni-mannheim.de/www-edz/pdf/ef/01/ef0112en.pdf