Do Broad‐based Employee Ownership, Profit Sharing and Stock Options Help the Best Firms Do Even Better?

Abstract

This article analyses the linkages among group incentive methods of compensation (broad‐based employee ownership, profit sharing and stock options), labour practices, worker assessments of workplace culture, turnover and firm performance in firms that applied to the ‘100 Best Companies to Work For in America’ competition from 2005 to 2007. Although employers with good labour practices self‐select into the 100 Best Companies firms sample, which should bias the analysis against finding strong associations among modes of compensation, labour policies and outcomes, we find that employees in the firms that use group incentive pay more extensively participate more in decisions, have greater information sharing, trust supervisors more and report a more positive workplace culture than in other companies. The combination of group incentive pay with policies that empower employees and create a positive workplace culture reduces voluntary turnover and increases employee intent to stay and raises return on equity.

How and when matter: Exploring the interaction effects of high‐performance work systems, employee participation, and human capital on organizational innovation

“…Specifically, these practices are likely to strengthen the effect of HPWS by allowing employees to speak up in different ways. For example, Blasi, Freeman, and Kruse () note that when employee ownership, which enhances employee participation in decision‐making and information sharing, is associated with HPWS, employee ownership and HPWS tend to better facilitate organizational performance than when utilized separately. However, we find a gap in the current human resource management (HRM) literature in that researchers have investigated HPWS in isolation from coexisting participative mechanisms (Barry & Wilkinson, ), such as employee participation practices.…”

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

“…As discussed here, organizational social cohesion is operationalized as the shared perceptions of the workforce regarding their commitment to interpersonal relationships and positive feelings for one another. To avoid the common method bias that often plagues the results of studies analyzing data collected from a single source (Blasi et al, ), organizational social cohesion was measured by aggregating the average responses of full‐time nonsupervisory employees to the following three statements in the employee survey (α = 0.78): (a) “People care about each other here”; (b) “There is a ‘family’ or ‘team’ feeling here”; and (c) “We're all in this together.” Conceptually, these three questions are appropriate to capture the degrees of social bonds that lead organizational members to stick together and remain united (Carron, ; Casey‐Campbell & Martens, ), which are the core attributes composing the concept of social cohesion. The mean r wg value was 0.70 and values of ICC(1) and ICC(2) were 0.05 and 0.95, respectively.…”

New social cooperation model in service oriented economy: the case of employee financial participation in the Baltic states

“…The significance of the new forms of ownership is that the new philosophy of equality (holding equal shares), a new process of management (the role relation between workers and managers) was formed (Pendleton, 2001;Blasi et al, 2016). ESOP are related to participation in decision-making, information sharing, high-trust and with a variety of positive perceptions of the company culture (Blasi et al, 2016). An economic argument in favour of ESOP is based on the expectation that employee ownership improves enterprise performance (Kim, 2016).…”