Made in Germany & Switzerland
The flag of GermanyThe flag of Switzerland
jacando logo
Back to the HR-Lexicon

Employee participation

Employee share ownership is when employees of a company are given the opportunity to buy shares in the company. In this way, they become co-owners and are therefore directly financially motivated to contribute to the success of the company. It is possible to participate through shares, profit participation rights or other forms of participation.

Advantages of employee participation

Employee share ownership creates a win-win situation for employees and the company. Employee participation in the company increases their loyalty to the company and they identify more strongly with its goals. Employee motivation and loyalty can be increased as a result. At the same time, employee participation can also help to increase performance and productivity by allowing employees to benefit directly from the company's success. Under certain circumstances, employee participation can also bring tax advantages.

Types of employee participation

There are different forms of employee participation, such as direct participation, indirect participation and mixed models. Employees actually receive shares in the company if they participate directly. Employees participate in profits or profit-sharing via indirect participation, for example, without owning direct company shares. Different forms of participation are combined in mixed models. The legal framework in the EU and Switzerland. The legal framework for employee participation programs can vary from country to country. In the EU, employee participation is regulated by directives and laws. Employee participation programs are also widespread in Switzerland and are tax-incentivized. To ensure that the program complies with legal requirements, it is important to find out about the specific legal requirements in each country.