While the private sector has been encouraged to embrace profit sharing as a tool for greater economic inclusion and poverty eradication, it cannot be the only tool to expand the economy. This was the sentiment expressed by the chief executive officer of the Namibia Chamber of Commerce and Industry, Tarah Shaanika.
“Profit sharing is being used to boost productivity as owners of a company are always motivated to perform better,” said Shaanika yesterday when addressing a business breakfast on the topic.
Profit sharing is broadly defined as various incentive plans introduced by businesses to provide to employees direct or indirect payments that depend on the company’s profitability in addition to employees’ regular salary and bonus. In public traded companies these plans typically amount to allocation of shares to employees.
Also speaking at the event, the secretary general of the Namibia Employers’ Federation (NEF), Tim Parkhouse, encouraged the private sector to share profits with employees but emphasised that the NEF does not want to see a law compelling employers to share profits. Parkhouse added that businesses exist to make profit and that profit is determined by productivity. “However, productivity in Namibia is very low,” lamented Parkhouse.
“Business owners should know that profit is spelled ‘p-r-o-f-i-t’ and not ‘g-r-e-e-d’,” warned Parkhouse.
Meanwhile, the managing director of the Allan Gray Orbis Foundation in Namibia, Graeme de Bruyn, questioned the definition of profit sharing in general. “Businesses need to strive to create flourishing societies as an alternative to conventional profit sharing,” noted De Bruyn.