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Employee Stock Ownership, Involvement, and Productivity: An Interaction-Based Approach

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  • Andrew Pendleton
  • Andrew Robinson

Abstract

The authors use the British Workplace Employment Relations Survey to assess whether the combination of employee stock ownership (ESO) plans and participation in decision-making positively affect productivity or whether ESO alone affects employee productivity. By assessing the extent to which employees participate in ESOs and the quality of their decision-making, the authors provide a clearer and more nuanced picture of this relationship with productivity. On the one hand, results show that stock plans seem to need other forms of employee involvement and “voice†in the firm to be effective, especially when there is minority participation in the ESO plan. On the other hand, results indicate that majority participation in the plan has an independent effect on productivity. Overall, the authors' research challenges prevailing views about the complementarity of stock ownership and employee involvement practices.

Suggested Citation

  • Andrew Pendleton & Andrew Robinson, 2010. "Employee Stock Ownership, Involvement, and Productivity: An Interaction-Based Approach," ILR Review, Cornell University, ILR School, vol. 64(1), pages 3-29, October.
  • Handle: RePEc:sae:ilrrev:v:64:y:2010:i:1:p:3-29
    DOI: 10.1177/001979391006400101
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    References listed on IDEAS

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    1. Aubert, Nicolas & Garnotel, Guillaume & Lapied, André & Rousseau, Patrick, 2014. "Employee ownership: A theoretical and empirical investigation of management entrenchment vs. reward management," Economic Modelling, Elsevier, vol. 40(C), pages 423-434.
    2. Maxwell Sandada & Kamunyaru Batanai Basil & Asphat Muposhi, 2016. "The Influence of Employee Share Ownership Schemes on Firm Performance: the Case of Zimbabwean Firms," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 12(2), pages 37-50, April.
    3. Anne-Laure P. Winkler & Jill A. Brown & David L. Finegold, 2019. "Employees as Conduits for Effective Stakeholder Engagement: An Example from B Corporations," Journal of Business Ethics, Springer, vol. 160(4), pages 913-936, December.
    4. Ahrens, Carolin & Oehmichen, Jana & Wolff, Michael, 2018. "Expatriates as influencers in global work arrangements: Their impact on foreign-subsidiary employees’ ESOP participation," Journal of World Business, Elsevier, vol. 53(4), pages 452-462.
    5. Prasad, Ajnesh, 2018. "When is economic inequality justified?," Business Horizons, Elsevier, vol. 61(6), pages 855-862.
    6. Fathi Fakhfakh & Andrew Robinson & Aguibou Tall, 2019. "Financial Participation and Collective Conflicts: Evidence from French Firms," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 58(4), pages 674-703, October.
    7. Imanol Basterretxea & John Storey, 2018. "Do Employee†Owned Firms Produce More Positive Employee Behavioural Outcomes? If Not Why Not? A British†Spanish Comparative Analysis," British Journal of Industrial Relations, London School of Economics, vol. 56(2), pages 292-319, June.
    8. Martin Červený, 2017. "Fulfillment of IFRS 2 Disclosure Requirements by Companies Listed on the Prague Stock Exchange," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(3), pages 53-64.
    9. Choi Sang Long & Ajagbe Akintunde Musibau, 2013. "Can Employee Share Option Scheme Improve Firm’s Performance? A Malaysian case study," Information Management and Business Review, AMH International, vol. 5(3), pages 119-128.
    10. Leila Baghdadi & Rihab Bellakhal & Marc-Arthur Diaye, 2016. "Financial Participation: Does the Risk Transfer Story Hold in France?," British Journal of Industrial Relations, London School of Economics, vol. 54(1), pages 3-29, March.
    11. Maxwell Sandada & Kamunyaru Batanai Basil & Asphat Muposhi, 2016. "The Influence of Employee Share Ownership Schemes on Firm Performance: the Case of Zimbabwean Firms," EuroEconomica, Danubius University of Galati, issue 2(12), pages 37-50, April.
    12. Paul E. M. Ligthart & Erik Poutsma & Chris Brewster, 2022. "The development of financial participation in Europe," British Journal of Industrial Relations, London School of Economics, vol. 60(3), pages 479-510, September.
    13. Joseph Blasi & Richard Freeman & Douglas Kruse, 2016. "Do Broad-based Employee Ownership, Profit Sharing and Stock Options Help the Best Firms Do Even Better?," British Journal of Industrial Relations, London School of Economics, vol. 54(1), pages 55-82, March.
    14. Ross Brown & Ronald McQuaid & Robert Raeside & Matthew Dutton & Valerie Egdell & Jesus Canduela, 2019. "Buying into Capitalism? Employee Ownership in a Disconnected Era," British Journal of Industrial Relations, London School of Economics, vol. 57(1), pages 62-85, March.

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