Richer Sounds Employee Incentives Evaluation PDF

***Richer Sounds* is a record company and is giving employees shares in the business** **Evaluate the effectiveness of this strategy to increase productivity and employee retention for a business, such as *Richer Sounds*.** Employee ownership is when interest in a company is held by the company\'s...

***Richer Sounds* is a record company and is giving employees shares in the business** **Evaluate the effectiveness of this strategy to increase productivity and employee retention for a business, such as *Richer Sounds*.** Employee ownership is when interest in a company is held by the company\'s workforce. Richer Sounds now has 60% of the business owned by the employee ownership trust. Employee ownership can create incentives in the form of employee motivation and productivity because the employees benefit financially from their own efforts and have a stake in the business. This may result in an increase in employee productivity as the employees own the majority of the business and can benefit from a share of the profits Due to this, owning shares in Richer Sounds might improve company performance, result in greater levels of loyalty, engagement and individual performance, thereby improving overall productivity and retention. The extract shows that in 2018 profit per employee was £19 690 demonstrating how important each employee is to Richer Sounds By owning shares in the company, this figure may improve as there might be a direct impact on sales and profitability that the employees benefit from. By owning a share of the business, employees at Richer Sounds might be more inclined to increase their productivity and aim to sell more electrical equipment to improve this return on investment. However, if the share price decreases this can have a negative impact on the value of the shareholding for an employee and therefore reduces the incentive to work harder and increase productivity. ROCE over the time period has declined to 33.6% in 2018 from 52.1% in2016. The earning per share has decreased in2018 compared to 2017 and this might reduce labour productivity at Richer Sounds if employees are not receiving a high enough financial reward for their efforts.. By owning 60% of the shares, employees at Richer Sounds will have greater participation in decision making and might have more power than the owner Julian Richer. The extract indicates that most of the employees at Richer Sounds have worked for the business for many years with 39 employees working for over 20 years indicating that Richer Sounds does not have a problem with labour turnover/employee retention and that employees are already happy There are other ways to improve productivity and retention such as empowerment strategies, consultation or providing flexible working hours to staffwhich might be more effective and do not require ownership to be given to employees Empowering employees to make more decisions shows that a company values its staff and this can instill a sense of pride and loyalty among them. Consulting employees before making any big decisions about the direction of the business also demonstrates that the business cares about their staff and the impact of decisions on them. Employees are likely to feel grateful for being consulted. Another excellent way of motivating staff is by giving them flexible hours or even in some cases a shorter working week such as a 4 day week. With this approach employees are likely to feel grateful for the extra time they have off and work more productively in the shorter time period they are there. All of these strategies also have disadvantages however and a combination of financial and non-financial human resource strategies might be the best way to improve overall productivity as employees are often motivated by different things