What has boosted employees’ fortunes most dramatically are bonuses based on profit sharing bonuses, some of which are tied to the price of nickel. The system was put in place in 1987 and it couldn’t have happened at a better time. Nickel prices began rising that year and are now about four times what they averaged in 1986. As a result, Inco paid $57 million in bonuses in 1988 and, with 1989 first-quarter earnings of $276 million(US), another hefty quarterly bonus is in the works.
What’s more, virtually all Inco employees are Inco shareholders thanks to a share award plan being put in place that grants shares to every employee based on number of years of service. If there are any further special dividends such as the $10(US) dividend paid out in early 1989, all employees will benefit through that program as well.
Clearly, initiatives such as these increase the bond between employee and employer in a way that benefits both. As Inco Chairman Donald Phillips said at the company’s annual meeting last week, these bonus systems have “provided an incentive to all employees to work `with’ the company rather than `for’ the company.”
Inco says it is better to reward employees through profit sharing when financial results are good rather than through permanent increases in basic rates that would make the company uncompetitive when times are bad. That’s a philosophy employers in other cyclical businesses might do well to emulate.
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