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Employee Share Ownership in Australia: Aligning Interests 

by: TNS Social Research
Source: Australian Government Department of Employment and Workplace Relations 

Employee share ownership (ESO) is a human resource or workplace relations strategy that can be used to motivate employees by giving them a stake/share in the company's success. In 2000, the Nelson Report (Shared Endeavors: An Inquiry into Employee Share Ownership in Australia) highlighted the lack of comprehensive information on the nature, number and extent of ESO plans in Australia. Furthermore, the Nelson Report recommended that the government should investigate the take-up of ESO in Australia and explore the barriers that prevent businesses from setting up ESO plans.

The research confirmed that ESO is a complex area and that while general awareness of the concept among businesses is high, there is a lack of depth of understanding of issues related to design, implementation and management of ESO plans. This lack of knowledge also extends to some advisers, for whom the complexity of specific tax and legal issues can be overwhelming.

The research found a high level of endorsement for the notion of ESO among businesses with plans and those without plans. Overall, businesses with plans rated ESO more positively than those without, indicating high endorsement of the concept as a productive human resources strategy for those with practical experience.

Businesses in the study were categorized according to their attitudes and behaviors regarding ESO. Businesses (and individuals within business) will usually move through this behavior change continuum as they become aware of ESO, contemplate and weigh up the benefits and problems they associate with using ESO, and prepare to trial it for the first time or implement/maintain it on an ongoing basis. Most businesses in the survey (40%) had never thought about ESO at all.

The research indicates that there is broad support of the concept of ESO among Australian businesses. The majority of businesses with ESO plans are satisfied with the effectiveness of the plans as a workplace and human resource strategy. However, many businesses do not see ESO as a relevant strategy for their business and do not feel that their employees would want such a scheme. Furthermore, businesses entering into the design and implementation phases of ESO are challenged by the complexity and costs associated with the exercise and some comment on the resistance of employees.


Details

Link: None
Publication Date: 2009-01-01
Pages: 18