Company Profile: How to power transformational change by sharing your company’s risks, wins and losses

by Anja Kroll

Picture this: A few days before Christmas and the company you’re working for has once again performed well. Now you and most of your colleagues are sitting comfortably waiting for the last internal presentation this year. Your CEO will show you the final financial forecast for the current year with facts and figures. This doesn’t come as a big surprise since you’ve been receiving the monthly updates. The company’s annual win, that you and your colleagues earned during the last twelve months, can and will be calculated. From this win, one third will be reinvested, one third will be given to the shareholders and not less than one third will be distributed among all employees. Since the bonuses for teams as well as for individuals will also be announced in a few minutes, the air is vibrant with expectations.

After the presentation you will get a detailed printout, with all the numbers listed: Your annual salary, your share of the company’s profits and your bonus. On the sheet you will find the information for each and every employee including your boss, all members of the executive board and the CEO herself. And to be sure, in a few days, the money listed in the last column of your row will be transferred to your bank account.

Sounds to good to be true? Yet it is real. This annual win distribution ritual happens every year at Ergon Informatik in Switzerland. (The latter might explain, why the ritual is tenderly called “Chästeilet” — cheese distribution — in some parts of rural Switzerland at the end of the season the farmers receive their share of the cheese according to the amount of milk their cows have given during the season on alpine pastures).

At the core of the transparent salary model is a formula for the calculation of the base salary. The employee’s degree, her professional experience, the duration with Ergon and her age are the main factors. A cut, which goes towards every person on the payroll, limits the influence of time. On top of the base salary extra amounts are given for performing a job well done and bonuses are also given (teams and individuals) and the distribution of the “cheese”.

Read on about the Management 3.0 practice of salary formula

Ergon was founded in 1984 and the founders implemented a value model, with which they wanted to attract the best graduates. Sharing the risks, wins and losses was built into the company’s culture code right from the beginning, together with transparency in the company’s data (including salary), equal rights for all employees, especially the right for every employee to participate in the companies internal issues.

Sharing wins sounds easy but what about the losses? Thanks to the smooth business, there have only been a few years with losses at Ergon. After the dot-com crises e.g., when Ergon lost one of its main customers. The Ergonianer, as they call themselves, stood together and accepted less annual salary and no extras. All of them, up to the CEO.

The success of the company speaks for itself. Ergon shows constant growth, without noteworthy outside capital, currently employing almost 300 people. Just recently they won the European best workplace award, which is based on the votes of the employees themselves.

Photo credit: Ergon Twitter

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