The CEO of Majestic Wine, Rowan Gormley, recently gave his portion of potential future bonus to his staff. This was seen by most as a very positive gesture done to align all the staff and boost morale.
Gormley’s reasoning was not about altruism but about commercial sense. It can help everyone feel part of delivering an objective and therefore his analysis was the company’s performance should improve.
More and more businesses are realising the longer term benefits of positive gestures towards all staff to improve company performance.
I am a firm believer in positive gestures and the real benefits that they can bring to a business. At FinnCap we are 95 per cent owned by our staff. We encourage share ownership and believe that owning shares is much more motivational and creates a different way of thinking than just share options.
Thinking like a shareholder drives a different type of behaviour which means employees want to be part of growing the company and think wider than their job description. They are looking for improvements and going the extra mile and can come up with some great ideas as a result.
It is very motivating to feel part of something and to know you are making a difference. The dividend on those shares is a result of all the team’s hard work.
In order to help the team own shares we often provide them with a loan that can be paid back over time. No matter how small the share ownership the results are fairly similar. Making everyone feel part of the same goal and wanting to do more than your day job.
Shared benefits
We have recently been using some excess cash to buy shares into our Employee Benefit Trust (EBT ). We have some junior members of the team who can’t buy a significant stake and to compensate for this we have given them a notional dividend that was accruing on the EBT’s shares.
This wasn’t a large amount but getting something unexpected had a big impact, especially as it came as a result of everyone’s hard work. It was a gesture that made the whole team feel included in the vision and strategy of the firm and no one is forgotten.
How companies treat their staff and how they can all benefit in the future success of a company is becoming more and more topical.
It is also important in driving good financial performance of the company overall. When business gets tough, having alignment and loyalty, driven by small positive gestures, can get you through.
It means people will go the extra mile to succeed when markets get difficult. They belong to something and want to fight for it. That is something that salary alone cannot buy.
