When we talk about true empowerment of employees and a company like Semco, how does it all keep from becoming chaotic and dysfunctional? Just like other companies like Whole Foods and Southwest Airlines, when no one's put in charge, employees are forced to take responsibility for the success of the company.
Everyone is responsible for what happens and for making decisions based upon the customer and the teams best interests. They must take responsibility for quality products and customer service demands, while growing the business.
How does it work at Semco?
Numerous workers not only set their own schedules but even their own salaries.
They are offer 11 various options they can choose to be compensated by.
Of course the obvious question that comes up is: What keeps the employees from abusing this freedom?
1. Right up front, all the company's financial records are public, as a result everyone knows the salary of everybody else. If someone attempt to compensate themselves too much, they must work with fellow employees that resent what they did.
Even union members of the company argued against pay raises that were too high and would damage the company's profitability.
2. Workers must reapply every six months for their job. If workers take advantage of the system, they will be looking for a new job pretty quickly.
3. Compensation is connected directly to the profits of the company. There is huge peer pressure to make sure budgets are kept in line.
Again, if this sounds like it would create total chaos and anarchy to you, keep this in mind. The quality of Semco's products and services are so high and the customer service so efficient that 80 percent of annual revenues is brought in through repeat customers.
How does it work with employee retention? They have 2,000 job applications on file, while they have less than 1 percent turnover rates with the 3,000 employees they have over the last 6 years.
Next post we'll talk about whether the company's bottom line justifies its practices.
Part One Part Two Part Three
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» Managing the Semco way - part 3 from ManagersRealm
With all of the talk about the Semco management style, the question remains: how does it affect the bottom line? According to the company figures - fantastic. First, Semler says that all of the numerous company operations have three common... [Read More]
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