Euphoria Telecom launched a new company-wide profit share initiative last year, and the first pay-outs were made in July 2019.
Co-founder, George Golding says that the difference between the Euphoria programme and most other schemes out there is that it doesn’t only incentivise a few key people but was instead devised with the wellbeing of all the company’s employees in mind.
“We’re trying to promote an inclusive culture at Euphoria,” Golding explains. “As such, the profit share we give out is not tied to an employee’s performance at all. Bonuses and incentives are a different aspect of our engagement model. Our profit share pay-outs are done over and above these payments.”
Caroline du Plessis, a Reseller Operator at Euphoria, says that receiving her first pay-out in July was great. “I’ve heard loads of stories from family members who have been promised profit share from their large corporate companies, but they never delivered on their promises. It’s so refreshing to know that Euphoria management remain true to their word, and that they are open to sharing their profits with the people who have helped them earn it.”
Golding agrees that a lot of South Africa’s larger companies don’t make any of their profits accessible to their employees. “While you do get a lot of share incentive schemes, the problem is that what people are used to in the marketplace is working for a company for more than 5 years, and waiting for their promised share options to kick in. But these options are only a small bit of equity in the company, which will only become liquid if the company exits or pays dividends. A lot of companies never actually reach that status, so their employees never see a cent. It’s a long-winded process that often does not come to fruition.”
Crystal Petersen, a Reseller Administrator, says that she is blown away with Euphoria’s approach. “It is just so simple – I am being given money for doing my bit and helping the company to be successful. I am grateful, thankful and totally amazed by our company’s ability to deliver on its promises. Euphoria has gone above and beyond to ensure that we as staff feel appreciated.”
Golding concurs. “At Euphoria, our profit share system is purposely uncomplicated. Five percent of the company’s profit, before tax, is paid out. In the third year of a person’s employment at Euphoria, they start to earn profit. The amount that is paid out to each person is based on their salary versus the total salary pool. This is because this monetary value is the closest metric we have to measure each employee’s value contribution to the entity as a whole. This amount is transferred into our employees’ bank accounts after the financials are audited and approved.”
The scheme is independently analysed by the accountants, who are also in charge of distributing the profit certificates.
Pay-outs occur twice per annum, 50% in July and 50% in January for the previous financial year, and they cover everyone from the kitchen staff to the highest managers. Directors and shareholders themselves are however not included.
Garth Siebers, Euphoria’s Operations Manager, says that the tangible nature of the profit share scheme serves as great inspiration for the entire team. “When you get recognised for your hard work with a pat on the back, it makes you feel good,” he explains. “But when you get recognised for your hard work with profit share, it makes you work harder and smarter, and you feel good. All of a sudden, all aspects of the business become important to you.”
Samantha Mankala, a Software Developer agrees. “When I received my first profit share payment it was celebration time. I was so happy that Euphoria kept their promise. If it continues, I know employees will be super motivated and will work harder.”
Golding believes that the reason that more companies don’t mirror Euphoria’s unique profit share strategy is because of fear. “I believe other companies should know what we have done because it can give them the impetus to do the same. It’s wasn’t a decision that was come to lightly. There was a fair amount of internal debate while we addressed all the issues that could potentially crop up, but in the end the benefits of showing our gratitude to our staff outweighed them all,” he recounts.
“Companies with a culture of reciprocity report much higher levels of internal alignment and employee engagement. The long-term rollout of a programme like this yields incredible rewards for the financial health of the company,” says Golding. “A lot of people will speak to their staff and tell them that they are all in the same boat, and provide verbal recognition, but they seldom put their money where their mouths are.”
“At Euphoria we like to be straightforward and unapologetically authentic. We introduced the programme last year. We paid out this year. The process has been fully transparent and there was no lengthy waiting period. It’s as easy as that – in your third year of working for Euphoria you will start earning profit. We want our people to feel that they are a part of something inspiring, and we want the company to make more profits so everyone can share in them. Our dream is for our employees’ lives to be more financially stable, and just better in general.”