A Detailed Overview of Employee Ownership Plan Alternatives
Employee Ownership and Employee MotivationDuring the early 1980s, the National Center for Employee Ownership conducted an exhaustive investigation of how employees react to being owners. We surveyed over 3,500 employee owners in 45 companies. We looked at hundreds of factors in an effort to determine whether it mattered to employees that they had stock in their company, and if so, when.
The results were very clear. Employees did like being owners. The more shares they owned, the more committed they were to their company, the more satisfied they were with their jobs, and the less likely they were to leave. Naturally, some employees in some companies liked being owners more than others. Individual employee response to ownership was primarily a response to how much stock they got each year. After that, employees responded more favorably if they had ample opportunities to participate in decisions affecting their jobs, worked in companies whose management really believed in the concept of ownership and not just the tax breaks, and were provided regular information about how the ownership plan operated.
By contrast, the size of the company, the line of business, demographic characteristics of the employees, seniority, job classification, presence or absence of voting rights or board membership, percentage of the company owned by employees (as opposed to the size of the annual contribution), and many other factors did not have any impact. Employees looked at the employee ownership plan and asked "how much money will I get from this?" and "am I really treated like an owner?" If they liked the answers to these questions, they liked being an owner.