Systematic Overview of Financial Participation

There are two kinds of property rights inherent in employee participation: control, which is participation in decision making and returns, which is financial participation.1 Whether a given scheme embraces participation in decision making depends on the prerogatives and rights that it confers upon employees. In employee share ownership, these rights are determined by whether ownership is direct or indirect, whether stock is held through an employee trust or co-operative, and whether voting rights and other forms of immaterial participation accompany ownership. In profit-sharing, there is no necessary link to any form of employee input into company decisions at any level. In practice, however, these schemes are often part of a package of participatory measures, including information and participation in control.