Philips: a socially-minded company | Philips Museum (2024)

On April 16, 2005, Frits Philips’ hundredth birthdaywas celebrated in impressive style. For that one day the city of Eindhoven wasofficially renamed ‘Frits Philips City’ and, amongst other things, it had aFrits Philips train station as well as its own currency unit – ’t Fritske – andthe Philips Symphony Orchestra performed the Frits Philips overture in theFrits Philips Music Center. Eight months later, when Frits Philips passed awayon December 5, once again the residents of Eindhoven all showed theiradmiration for him. In a special edition, the newspaper ‘Eindhovens Dagblad’ wrote: ‘without his influence Eindhovenwould never have become the city it is today’. The newspaper went on to say that Frits Philips had cared dearly for his employees, providing them withaffordable housing, study bursaries as well as sports and cultural facilities.

The importance of ensuring the wellbeing of employeeswas nothing new to Frits Philips. As president of N.V. Philips he had continuedthe social policy that was implemented by his uncle Gerard, his father Antonand his brother-in-law Frans Otten. Back in 1900 Philips had been one of thefirst companies in the Netherlands to set up a Sickness Fund, which paidemployees 70 per cent of their salary when they were off sick. In 1909 thePhilips Medical Service was set up to give employees and their families freeaccess to doctors and to provide medication and dressings free of charge. Philipsalso set up a fully equipped outpatient clinic, a Philips child health clinic,a Philips pharmacy and a Philips midwifery service. Under the management of Dr.Burger, who was appointed in 1928, the Philips Medical Service laid thefoundations for occupational healthcare in the Netherlands.

The Philips Pension Fund was set up in 1913. This fundprovided retirement pensions, disability benefit and also a widow’s andorphan’s pension. In addition to the pension fund, there was also the PhilipsSupport Fund (Philips’ Ondersteuningsfonds) for employees who, through no faultof their own, had ended up in financial difficulty. Employees with more thanthree children could expect to receive support from the Philips Child SupportFund (Philips’ Kindertoeslagfonds), decades before Child Benefit becamegenerally available in the Netherlands.

As the company expanded, so it became increasinglydifficult for employees to find suitable accommodation. Philips therefore decided
to build its own housing. The area of the city now known as ‘Philipsdorp’ wasbuilt between 1910 and 1923. This area was designed as a small village. The 800or more houses were surrounded by extensive green spaces and the area had its own shops as well as sports and leisure facilities. The spacious houses wereconnected to the gas mains and water supply and they were also connected to thesewer system, which was not commonplace at that time. After Philipsdorp therefollowed another residential area called Drents Dorp and dozens of otherprojects too. By 1929 Philips had built nearly 4000 houses in Eindhoven. Therewere also branches of the ‘Philips Consumers’ Cooperative Society’ (Philips’Verbruikerscoöperatie) – which later became ETOS – in these new residentialareas so that employees were able to purchase groceries and household productsat an affordable price.

Philipsdorp in 1918

Education was another important focus in Philips’social policy. In 1916, to mark the company’s 25th anniversary, Gerard Philipsand his wife put up the capital required to create the Van der Willigenfonds.This fund provided bursaries to enable the children of Philips employees topursue further education. Following the foundation of the Van derWilligenfonds, in 1920 the Philips Association for Education and Development(Philips’ Vereniging voor Onderwijs en Volksontwikkeling) was set up andschools were built to provide nursery, primary and secondary education. In 1928the Philips Boys’ Industrial Training Program (Philips-Jongensnijverheidsopleiding,JNO) was also set up. This program provided a four-year course of vocationaleducation for young boys when they left primary school. For employees there wasthe Philips Technical College on the Kastanjelaan. This college provided all ofthe company’s in-house training courses. The household skills courses werequite separate. Thanks to an idea put forward by Anna Philips-de Jongh, from1916 onwards ‘Philips girls’ were able to attend evening classes to learndomestic skills. A few years later this activity was transferred to the PhilipsDomestic Skills School (Philips Huishoudschool).

Philips Domestic Skills School in 1928

The company also provided recreational facilities forits employees. On August 13, 1913, the Philips Sports Association (Philips’Sportvereeniging, PSV) was set up. The purpose of this association was to ‘promote participation in a range ofdifferent sports in the broadest sense of the word’. Within a few years thePhilips Sports Association included sections for athletics, football, cricket,korfball, gymnastics, fencing, pigeon racing and hockey. From 1921 onwardsthese sports activities came under the recreation fund known as the Philips -De Jongh Ontspanningsfonds. At one point Philips had no less than fortyhectares of sports fields under its management in Eindhoven. The PSV footballteam, who all worked at Philips, won the national championships for the firsttime in 1929.

PSV Sports park 1920-1929

In addition to sports activities, the Philips - DeJongh Ontspanningsfonds also financed dozens of other activities, ranging fromchess clubs to flower arranging courses. In 1929 the ‘PhilipsOntspanningsgebouw’ events venue (which was later called the ‘POC’) wasfinished and ready for use. It included a reading room, library, billiard room,cinema, theater, and club rooms. Theater companies from Amsterdam and The Haguewere invited to come and perform here, and each year the Concertgebouworchestra gave a number of performances in Eindhoven. The POC was also home tothe Philips Harmonie brass band (1912), the Philips Orchestra Association(1921) and the – even older – Philips Philharmonic Choir.

Philips Ontspanningsgebouw in 1946

After the Second World War Frits Philips tookresponsibility for the company’s social policy. Under his management the SocialAffairs department, which had been managed by G.F. Evelein since 1917, definedthe essential elements of the company’s social obligations to its employees.The department would focus on three core tasks: ‘social security, work satisfaction and social responsibility’.Fully in keeping with Frits Philips’ personal convictions, the emphasis lay on
individual attention for employees: ‘Everyemployee must receive attention – in the broadest sense of the word – and notprimarily as a production factor but above all as a human being. The human factor must be a top priority in our personnel management’.

During the post-war period of reconstruction theSocial Affairs department expanded into a very large and in many respectsindependent company unit. In the Netherlands the personnel numbers rose from22,000 in 1945 to 98,000 in 1970 and as a result work that had previously oftenbeen carried out by volunteers was now performed by professionals. Amongstother things, the department was responsible for the implementation of sociallegislation and for providing facilities in the field of education, developmentand leisure. Whilst continuing to build upon its existing activities – in 1960,for example, the number of houses in Eindhoven owned by the company rose to8,600, almost a quarter of all housing in the city – the company also embarkedupon new ventures. The Philips Medical Service gained a consulting surgery formedical organizational psychology, andprograms were introduced for business management training and specificworkplace- elated training. In Someren a camping center was createdspecifically for Philips employees. What’s more, these social activities werenot confined to Eindhoven or indeed to the Netherlands. The company’s 260,000employees (1970) working outside the Netherlands also had access to socialfacilities, which were tailored to suit local customs and circ*mstances.

Kindergarten in 1950

During the final quarter of the 20th century there wasan increasing overlap between the social facilities provided by the company andthose provided by the state. The Dutch welfare state, which had developed at arapid rate, provided a wide range of benefits, public healthcare, socialhousing, open-access education, student finance, and subsidies for sports andcultural pursuits. This led to a debate about which responsibilities should betaken by the government and which by companies. There was criticism from manyquarters, including labor unions and politicians, of what was perceived asPhilips’ dominant position in society. It is also important to note here thatas prosperity rose, so employees became more emancipated and more vocal.According to popular opinion, Philips’ social policy exhibited paternalistictraits, and that was not in keeping with a modern welfare state. The companyresponded by gradually amending the social provisions it offered in order tobetter suit the changing circ*mstances and needs.

A major change took place in 1980 when the primaryhealthcare provided by the Philips Medical Service started to be provided by anindependent body. Most Philips employees felt it was no longer appropriate forthe doctors or social workers treating them to also be employed by the company.Several dozen company doctors, nurses and pharmacists found new jobs at thePhilips Healthcare Centers Eindhoven (Stichting Gezondheidscentra Eindhoven)that were set up to provide healthcare on an independent basis. Following this,it became clear that the Philips schools – which ranged from nursery schools tovocational training institutes – would also function more effectively if theywere public bodies. The many Philips sports and leisure associations alsostarted to operate independently, although a considerable number of themcontinued to be financed (to some extent) by Philips. This was also the casefor the professional section of the PSV football association. Another majorchange was the transfer of almost all of the company’s housing stock – inexcess of 17,000 rental properties – to the Hertog Hendrik van Lotharingenhousing association. The company’s decision to allow its social facilities tooperate independently or to terminate these facilities was in some cases drivenby financial motives, but more often than not there were other more importantconsiderations. For example, at the end of the 20th century hardlyany claims were being made on the Philips Support Fund that had been set up tohelp employees who were in financial difficulty. When the decision wasannounced to close the Van der Willigenfonds many people felt very emotional.For more than 101 years this fund had enabled tens of thousands of students toaccess further education.

Therise in prosperity and changes in social and economic circ*mstances have led tochanges in Philips’ social policy. However, the company’s ambition to strive forthe highest possible social standards has remained unchanged and is stillfirmly embedded in the company culture. These days Philips’ social policy formspart of the ESG Commitments. These commitmentsnot only define the company’s obligations to its own employees, they alsodefine Philips’ responsibility towards workers in its supply chain. This is allpart of Philips’ overall aim to improve the lives of billions of people allover the world.

Pictures © Philips Company Archives