All for one and one for all: A mechanism through which broad‐based employee stock ownership and employee‐perceived involvement practice create a productive workforce

Abstract

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 perception of we‐ness that employees experience through both participatory practices. Our path analysis of a multisource, time‐lagged dataset from 176 large U.S. companies revealed the sequential mediating roles of social cohesion and voluntary turnover between these organizational practices and labor productivity. Our theoretical claims and empirical evidence will contribute to a systematic understanding of how and why BESO and employee involvement leverage greater organizational productivity from employees.

Does employee participation matter? An empirical study on the effects of participation on well-being and organizational performance

“…Job satisfaction ----------------Organizational commitment Fig. 2 The three variables configuration of the present reasearch Most recently, Kim and Han (2019) proposed a path analysis using a multisource, time-lagged dataset of 176 US companies to study the link between participation and productivity. They showed empirically that employee ownership and decision-making participation are related to labor productivity.…”

I am therefore I own: Implications of organization‐based identity for employee stock ownership

“…Given the prevalence of these stock purchase plans, it is somewhat surprising that academic research seeking to answer questions about the impact of such plans on employees and employers has been slow to emerge. However, a recent special issue of Human Resource Management is an indication of increasing scholarly interest in the topic (Basterretxea, Heras‐Saizarbitoria, & Lertxundi, ; Kang & Kim, ; Kim & Han, ). Despite these recent advancements, very little is known about the determinants of an employee's decision to participate in a stock purchase plan and the inherent risk borne by employees.…”

Broad‐based employee stock ownership: What makes it effective in the management of human resources?

“…In their study entitled “All for one and one for all: A mechanism through which broad‐based employee stock ownership and employee perceived involvement practice create a productive workforce,” Kim and Han () develop a multi‐mediational model that describes how BESO affects organizational labor productivity. Specifically, they argue that the BESO‐labor productivity relationship is not direct but is instead mediated by attitudinal and behavioral outcomes (i.e., social cohesion and voluntary turnover).…”

“…Ren et al () found that executive stock ownership weakened the relationship between BESO and firm performance in the Chinese context, as the employees perceive their incentives relative to the executives as being inequitable. With BESO and employee involvement practices having already been linked within this domain, Kim and Han () sought to further explore the nature of this interaction for various firm‐level outcomes. They found that employee involvement directly enhanced BESO with respect to labor productivity, but these activities substituted for each other when it came to social cohesion and, subsequently, voluntary turnover.…”

“…In addition, there are important mechanisms that link BESO and firm performance. Kim and Han () provide evidence that this relationship is mediated by strong social cohesion and low voluntary turnover.…”