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Post: Profit Sharing: The Key to Revitalizing Canada’s Productivity Post-Pandemic
Revitalizing Productivity in Canada: The Case for Profit Sharing
Canada’s productivity has hit a critical point, described as a national emergency by Bank of Canada’s senior deputy governor, Carolyn Rogers. Frank Stronach, former CEO of Magna International, advocates for profit sharing as a potent solution. Drawing on my two decades at Magna, I can personally attest to the transformative power of making every employee a partner in profitability.
The Impact of Profit Sharing at Magna International
During my tenure at Magna, the principle that “employees work with you, not for you” was not just a mantra but a practice. The company’s profit-sharing model embedded a deep sense of ownership and responsibility among us. Knowing that our hard work and efficiency directly influenced our earnings made us more committed and loyal. The benefits of what we saved or wasted at work were palpable, reinforcing the incentive to optimize our performance continually.
Enhancing Employee Engagement Through Profit Sharing
Profit sharing is more than just an incentive—it’s a strategy for empowerment. Studies, including one by the National Bureau of Economic Research, confirm that profit sharing boosts productivity, enhances job satisfaction, and reduces turnover. By aligning employees’ successes with the company’s goals, businesses can foster a more engaged and motivated workforce.
Addressing Post-Pandemic Workplace Morale
The shift in workforce dynamics post-COVID-19, with the departure of seasoned workers and the influx of less experienced ones, poses additional challenges. Here, profit sharing can play a crucial role. It acts as a bridge, smoothing transitional periods by giving new employees a tangible stake in their new roles, which motivates them to learn and adapt quickly.
A Call to Action for Canadian Businesses
As businesses look to rebound and grow in the post-pandemic era, adopting a profit-sharing model could be key. It’s not just about enhancing productivity but also about rebuilding a collaborative and resilient work culture. This approach could redefine employee relationships with their work and with each other, ultimately driving the nation’s economic recovery.
Conclusion
I am going to have to personally agree with Mr. Frank Stronach on this one. We cannot follow the example set by major corporations like General Motors in the 1980s, who, despite being profitable, chose to abandon their employees and relocate operations to Mexico in pursuit of higher profits. Such actions underscore a prioritization of greed over loyalty to employees and the country.
Canada’s productivity emergency demands innovative solutions, and profit sharing presents a tried and tested route. My experience at Magna International is a testament to its effectiveness. By investing in our employees as partners, we can rejuvenate the Canadian economy and elevate our collective prosperity. As long as we face no further black swan events, adopting this model should pave the way for a stable and productive future.
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About the Author: Bernard Aybout (Virii8)
