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Sex Incentives "Common" in German Business Culture, According to Der Spiegel

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If you caught the news last month wherein a Hamburg-based insurance company now owned by a Munich Re subsidiary admitted that some of its execs had arranged a massive bordello party as a corporate incentive, you may have believed that it was a one-time event, a poor decision that somehow got the stamp of approval from several key managers.

Here's what the media confirmed of that incident:
Hamburg Mannheimer International, now part of the prominent international insurer ERGO, took 100 of its best employees to the Hungarian capital on an incentive trip in June 2007, business daily Handelsblatt reported Thursday. There, the company rented out the historic Gellért thermal baths and transformed the spa into a brothel, participants told the paper.
. . .
[The] prostitutes were marked by color to indicate which services they would provide. "The women wore red and yellow bands," one guest said. "The first were there as hostesses, the others would fulfil all other wishes. There were also women with white bands -- they were reserved for the executives and the very best agents."
After each sexual encounter, the participating sex worker's forearm was stamped, for "fun." Apparently the offending parties who planned the Budapest "Bunga Bunga" affair have since left the company.

But today Der Spiegel has another revelation, that incentive sex is a regular part of German business culture.

Sex as a business incentive is "widespread," confirms Mechthild Eickel, who works for a sex worker educational association called Madonna. "It's in every branch, it's just that not every company can afford it."

At a certain level workers and customers can "no longer be rewarded with money," another industry insider says. But incentives outside the ordinary pay raise or bonus are not simply a question of hierarchy, event specialist [Klaus J.] Eisner says. The likelihood of such perks is higher for certain roles.

So what types of companies use sex to reward their top employees?

"Generally the trade and management industries work more with incentives than in manufacturing. In decades of personal experience with, for example, the automobile industry, I've never seen workers, technicians or engineers rewarded with incentives or events. Instead it was the buyers, sellers, press, salesmen or trade partners."

Sexual incentives are a special cementing agent, and thus particularly interesting from a managerial perspective, says Madonna's Eickel. "Rewards bind the interested parties and are therefore often the little connection to corruption," she says. "If a reward in the form of prostitution is taken, then a much easier potential for personal blackmail emerges." But the person who arranges and pays for the sexual encounter is also at risk of blackmail.


There are 400,000 prostitutes working in Germany, where the sex industry has been legalized. But according to Der Spiegel, the practice of visiting prostitutes is still seen as taboo, unless, it now seems, your boss is trying to pat you on the back and send you to the red light district.

If the report is accurate, what's astonishing is that it took this long for the news to go public. For, as one of Der Spiegel's sources points out, the promise of a dinner and date with a prostitute wouldn't appeal to all members of the Germany's business class.  "For female colleagues," says Eickel, a sexual encounter would "not be an attractive incentive event."

We're pretty sure that some men would be turned off, too. 
POSITION:  No positions in stocks mentioned.

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