Semco Lexicon

Bosses: Greater work participation led to a decrease in supervisors by 75%. Corp

orate staff offering accounting, marketing and legal expertise was reduced to th
e manufacturing units, while the quality control, processing and training depart
ments were eradicated.
Circular Organization: The former hierarchical twelve layer bureaucracy was chan
ged into three concentric circle layers. Counsellors form the inner circle and m
anage the general policies and strategies of the company. Partners form the seco
nd level and run the business units. Co-ordinators and represent the first-level
of management of each unit and Associates are all other employees of the compan
y, together they form the outer circle.
Clean-outs: Semco shuts down twice a year, when all employees together have to c
lean-out their work place, to dispose old documents and machinery.
Corruption: There is no tolerance whatsoever for corruption.
Democracy: Representative democracy takes place through the factory committees,
while for important decisions each employee has one direct vote.
Factory Committees: Each business unit of Semco (except the management) elects r
epresentatives to serve on committees, while it is ensured that the workers union
is also included. The committees meet with the top managers of each unit on a r
egular basis in order to discuss work-related policies and aspects of management
with the right to audit the books, declare strikes and question management meth
ods.
Family Silverware: In case of a new job opening a Semco employee who fulfils 70%
of the requirements is treated preferentially over applicants.
Flexitime: There are no fixed working hours at all, each worker decides in his w
ork group on the best schedule.
Headline Memo: Memos are titled with a newspaper-like headline and limited to on
e page.
Hepatitis Leave: It describes the idea of sabbaticals at Semco, where managers w
ere originally asked to consider the case of contracting hepatitis and being for
ced to a two months recuperation time. Professionals can take off a few weeks or
months every year or two from their usual duties to learn new skills, redesign
their job or simply recharge.
Job Rotation: Managers are encouraged to change jobs, while 25% of make use of i
t. A minimum of two years and a maximum of five years are the norm, while this e
ventually all depends on the employees.
Job Security: There is no promise on job security.
Lost in Space: It is a programme by Semco, where in a good business year several
young people are hired for one year at the entry level. There are no fixed job
descriptions, with the only obligation of working in 12 departments in the first
12 months, while possible job offers are negotiated with the departments.
Management by Wandering Around: Department mixing is encouraged, which leads to
almost no walls between offices and mixed departments between floors.
Manufacturing Cells: Production teams of workers cluster together to a complete

scale giving workers greater autonomy and responsibility, which resulted in grea
ter happiness and productivity. Often they set production quotas and develop imp
rovements for products autonomously and overall in
Natural Business: As a guiding principle everybody should concentrate on the cor
porate skills of making, selling, billing and collecting. Hence, unnecessary per
ks such as preference parking, executive dining rooms, fancy office furniture et
c. are eliminated.
Nucleus of technological innovation: A small group of mostly engineers without a
ny daily duties free to invent new products, refine old ones, devise market stra
tegies, unearth cost reductions and efficiencies and invent new business lines.
Compensation depends partially on their entrepreneurial success.
Paternalism: Employees are not treated like children, but as adults. Hence, ever
ybody is free to choose according to his own interests, while the company is onl
y concerned with job performance, not personal life. For example, health insuran
ce and other benefits are offered but managed by employees, while pools, gyms an
d sports tracks are not included.
Profit-sharing: The basic percentage to share is agreed upon between Semco and i
ts employees. These are more or less 25%, whose distribution to each worker is o
rganized autonomously.
Reverse Evaluation: Anybody who is hired or promoted must be interviewed, evalua
ted and promoted by all the people who will work for him. Semco managers are eva
luated every 6 months by those he supervises through a special custom multiple c
hoice questionnaire, while the results are made transparent. The average approva
l rate lays around 80/100 with those scoring below more than three times mostly
leaving the company.
Risk salary: In order to have fluctuating labour costs with losses and profits,
about a third of the employees may have a fluctuating salary by 25% according to
the performance of Semco in that year. If the company performs well, they recei
ve 125% of their normal salary and vice-versa.
Rules: No dress codes, no regulation on travels, no working hours, no internal a
uditing department, no preference parking places. The rule is to use common sens
e and have as few rules as possible.
Salary surveys: Semco asks his factory and office workers to visit comparable ma
nufacturing companies and interview their counterparts. Thus, no one distrusts t
he surveys and there is no need for off-the shelf surveys, ultimately creating m
ore trust in the process and findings. The ultimate goal is to have all employee
s set their own salary.
Satellite Programme: Contracting basic manufacturing by encouraging Semcos own wo
rkers to found their own company that can also sell to competitors. They are sup
ported through favourable leasing conditions for production machines, as well as
advised on pricing, quality and taxation.
Self-Set Pay: Around 25% of all employees set their own salaries, which is conti
nued to spread throughout the entire company.
Size: A business unit can only function efficiently, if people know almost every
one around them. Hence, they are generally split when they grow above 150 people
to diminish alienation and foster co-operation.
Strikes: The following rules are followed during a strike: 1) treat everyone as a
dults; 2) tell the strikers that no one will be punished when they return; 3) do

nt keep the records of who came to work and who led the walkout; 4) never call th
e police or try to break up a picket line; 5) maintain all benefits; 6) dont keep
workers or union leaders out of the factory; 7) insist that everyone respects t
he rights of those who want to work; 8) dont fire anyone during or after the stri
ke.
Support Staff: At Semco everyone copies, faxes, phones and picks-up his guests h
imself, as secretary jobs have been taken off the payroll.
Training: Instead of formal training programmes, employees are asked to envision
their future and are then supported to gain these qualifications through traini
ng, which is approved at the weekly business unit meetings.
Transparency: All corporate information is publically available, such as statist
ics on salaries, strategies, productivity and profitability. Employees are taugh
t to read financial documents, question managers and talk with the media freely.
Work at home: It is allowed and encouraged, as it enhances concentration, produc
tivity and peoples personal flexibility.Survival ManualEdit
Authority: Many positions bear authority, yet any sort of negative pressure, fea
r, insecurity or disrespect caused by exploiting authority is intolerable.
Change: Semco changes a lot, its a key characteristic considered to be healthy an
d positive, so do not fear change.
Clothing and Appearance: Feel free to wear whatever you want.
Evaluation by Subordinates: Twice a year you will be asked to evaluate your boss
, be frank and honest on paper and also in the following discussion.
Factory Committees: The factory represents the interest of each business unit. R
ead the charter, participate, make sureyour committee effecitively defends your
interest which many times will not coincide with Semcos interests. Wee this confl
ict as healthy and necessary.
Hiring: Prior to hiring and promoting, other employees in the unit interview and
evaluate candidates.
Job Security and Age: Anyone who has been at Semco for three years or is above 5
0 enjoys special protection, making a long list of approvals necessary, which of
fers security. Still, everybody can be laid-off.
Participation: The companies philosophy is built on participation and involvemen
t. Engage, give opinions, seek advancement, participate in elections, get in tou
ch with the factory committee, dont just be another employee.
Private Life: A persons private affairs have nothing to do with the company and t
herefore are of no interest to Semco, given that they do not interfere with work
. If help is required, the Human Resource department offers consulting and advic
e.
Organizational Chart: There is no formal organization chart, as leaders have to
earn prior respect to be in their position. In case of utter necessity, the comp
any structure is sketched and afterwards dispensed.
Semco Woman: Semco has various programmes to encourage female participation, as
they have lower promotion, employment and financial opportunities in Brazil. If
you are a woman, participate and if you are a man, understand and respect it.

Strikes: Workers assemblies are sovereign; as such strikes are part of Semcos demo
cracy representing what people in the company feel and think. Absence from work
because of strike is considered normal absenteeism.
Suggestions: There are no prices or rewards for suggestions, as they are an inte
gral part of our business culture.
Unions: Everybody is free to unionize, as they are important to protect our work
ers. We insist on mutual respect or dialogue, forbidding persecution of union me
mbers in any way.
Vacations: Everybody should take his 30 days of vacation every year, they are vi
tal to recover health and recharge. There is no excuse for not using vacation da
ys.
Working Environment: Feel free to change the environment surrounding you, accord
ing to your preferences and those who surround you at work.
Working Hours: The responsibility for setting working hours and fulfilling the r
equirements depends on each employee, as Semco does its best to adapt the workin
g hours to each persons preferences.