At Max Auto Supply Co., a Toledo-based chain of 113 automotive repair stores, CEO Randy Katz’s main motivation for adopting an ESOP was “to cash out family owners and avoid estate tax.” It also “felt like the right thing to do” for the company’s employees, most of whom are mechanics and technicians.
This mini-case study examines ComSonics, which first adopted an Employee Stock Ownership Plan (ESOP) in 1975, introducing its culture and its unusual Employee Advisory Committee.
Drawing on social identity theory, this research frames a multimediational model that delineates how broad‐based employee stock ownership (BESO) and employee‐perceived involvement practice in tandem yield a productive workforce at the organization level. In our theoretical model, we propose that social cohesion and voluntary turnover are collective attitudinal and behavioral outcomes resulting from the shared … Read More
While all kinds of businesses become employee stock ownership plan (ESOP) companies, there is a large percentage of engineering firms that have chosen the ESOP structure. Why so?
This presentation discusses five myths surrounding employee ownership…
Employee-owned businesses tend to outperform their competitors, a growing body of research shows. According to the National Center of Employee Ownership, businesses with employee ownership models grow sales and employment at a faster rate than businesses without such programs. Employee-owned firms also perform better than their counterparts during recessions, per research from Georgetown University. For … Read More
The purpose of this paper is to explore employee participation in ownership and control in a modern corporation and its impacts on intra-organizational social capital and workplace dynamics.
Purpose A growing number of econometric examinations show that works councils substantially shape the personnel policy of firms in Germany. Firms with works councils make greater use of various human resource management (HRM) practices. This gives rise to the question of whether employers view the shaping of personnel policy positively or negatively. Against this background, … Read More
Purpose The purpose of this paper is to review the historical background for broad-based ownership in the USA, the development of forms of employee ownership and profit sharing in the USA, the research literature on employee ownership and profit sharing and related employee participation, the development of policy and options for new policies. Design/methodology/approach It … Read More
In recent decades, workers’ paychecks have remained stagnant, despite increases in productivity. At the same time, returns to wealth have increased. Strategies that transform workers into owners, such as employee share ownership strategies, have the potential to give working people a stake in our growing economy and include them in the nation’s prosperity. With employee … Read More
The chapter reinforces the fundamental roles of information-sharing and participation in enterprises with shared ownership, while making key distinctions between shopfloor and office workers experiences and perceptions.
In spite of the rich body of evidence on the effects of HPWS, there are at least two relatively unexplored yet potentially important questions: (i) The conditions under which the HPWS is best introduced and best sustained; and (ii) in what way the HPWS will need to evolve when external environments change. Our findings fill … Read More
With a growing prominence of sophisticated econometric research in a much-expanded field of New Economics of Participation (NEP), it is of particular value to learn about real-world examples of participatory and labor-managed firms in the advanced market economies through extensive case studies. In this volume of Advances in the Economic Analysis of Participatory and Labor-Managed Firms, … Read More
There are now over 25 million employees who own stock in their companies through employee stock ownership plans (ESOPs), broadly granted stock options, or 401(k) plans with heavy concentrations of employer stock.
The article suggests that when reward strategies fail, it is because they are frequently subsumed to a meaningless search for a best practice that delivers shareholder value that could be applied uniformly across countries, sectors, or workplace contexts. For instance, executive compensation schemes incorporating stock options are focused too much on delivering value for shareholders, … Read More
We use an experiment to evaluate the effects of participatory management on firm performance. Participants are randomly assigned roles as managers or workers in firms that generate output via real effort. To identify the causal effect of participation on effort, workers are exogenously assigned to one of the two treatments: one in which the manager … Read More
This research report from the United Kingdom shows that the arrival of millennials in the workplace is not a threat to the employee owned business model. On the contrary, employee ownership works well to meet the aspirations of millennials, as it does for other generations. The ability of the employee ownership model to harness the … Read More
Last May, we introduced you to a new effort aimed at spreading the word about employee ownership at local and regional levels throughout the country. Building on pioneering efforts in Ohio and Vermont, the idea of proliferating state centers throughout the U. S. was initiated by the National Center for Employee Ownership (NCEO)…
Two major shifts in contemporary work organizations—“employee participation” and “diversity management”—have typically been studied in isolation from one another. Building on theoretical work by Acker (2006a,b), we ask how the interaction of these two constructs has affected the pursuit of workplace democracy at two worker cooperatives in Northern California. Using qualitative methods, we find that … Read More
My contention is that the most successful companies are built on mutual trust, honest information, and a belief in people rather than on new, top-down, more for less, processes that increase worker output in order to satisfy customers…
This interview with Martin Staubus discusses employee stock ownership plans (ESOPs). As Executive Director of the Beyster Institute at UCSD, Staubus has extensive experience in workplace issues and the challenges and opportunities of implementing ESOPs.
Profit-sharing plans are one way to address the global issues of income inequality and uneven wealth distribution while increasing employee engagement. One company, the Chinese telecom Huawei, has a successful employee stock ownership plan (ESOP) that demonstrates such incentives can be good for both employees and the business.
MONDRAGON, the largest cooperative in the world, and the inspiration for several U.S. cooperatives, faces a challenge in 2013 after one of its largest cooperatives votes to leave the group and another goes bankrupt.
Like many ESOPs, the Macfadden Employee Stock Ownership Plan was established as a means of transitioning ownership from the company’s founder to its employees. Just over 12 years later, the Macfadden ESOP now owns 100 percent of the company…
For the last several years, there has been a constant and very predictable discussion taking place regarding the sustainability of ESOP companies…