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10/11/2012

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This should be practice by companies. People are working really hard but they end up nothing. With this, people tend to work hard and motivated, in which there is a win-win situation between parties.

Your comments about profit sharing and ESOPs I found helpful and clear. However, your reference to NCEO's finding about ESOP companies outperforming their counterparts missed a key point. What Corey Rosen, (former NCEO Director, now retired), found was companies that had ESOPs combined with more participative management, did have improved results. Companies that had ESOPs but did not have more participative management had no better results. Its the participative management that drive the higher level of employee engagement and results.
Our company, SRC, is a case in point; where we went from a nearly bankrupt division of Internation Harvestor with an equity value of $100,000 to a current value of over $300 million. We use profit sharing and have an ESOP, but it is our management process/disciplines that drive the results. The profit sharing and ESOP are just the mechanisms by which we share the incremental wealth created. The are not unimportant, but they are not the driver. Other case study examples can be found at www.greatgame.com . I hope this is helpful...

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