Financial Participation of Employees in Lithuania

Participation of employees in decision-making in Lithuanian companies has its roots in trade union movement as well as in the practice of managing companies under Soviet rule. After Lithuania regained independence, employee ownership was used to facilitate privatization. A notable success was establishment of a number of employee-owned companies that were formerly state-owned enterprises during the first stage of privatization. However, no stronger tradition of employee participation has evolved. Current legal regulation of participation of employees - financial participation, as well as participation in decision-making - is not well developed and does not provide for stronger incentives. The solution of current employment and social problems by the Government, ruling parties as well as social partners is not associated with a higher level of participation of employees. Financial participation is viewed mainly as a way of employee motivation as initiated by managers and current owners of companies.