The effect of employee share ownership on employee commitment and turnover: comparing the cases in Britain and South Korea and the role of the economy

Yoon, Yeongjoon; Sengupta, Sukanya

doi:10.1111/irj.12272

Cited by 4 publications

(7 citation statements)

References 84 publications

(123 reference statements)

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“…Those employees are likely to exhibit higher level of work effort and a greater willingness to take actions that are in the firm's interests, while not necessarily being in the employee's own immediate self-interest (Sengupta et al 2007). Buchko (1993) and Yoon and Sengupta (2019) observe that employee ownership leads to an improvement in employee commitment and subsequently a reduction in employee turnover. This argument is also in line with Garvey and Swan (1994) who suggest that labour ownership motivates enhanced efficiency.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…This is because ownership motivates employees to become profit conscious and to reduce inefficiencies in wage costs (Richardson and Nejad 1986;Bova et al 2015a). Second, employee ownership can help to improve employee retention as employees with shareholding are more likely to be committed to their firm and its goals (Buchko 1993;Sengupta et al 2007;Yoon and Sengupta 2019). This in turn reduces firm's incentives to manage employee perceptions of the firm using accounting information in order to reduce turnover and the subsequent cost of hiring and retention.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…First, employees can enjoy financial rewards from shareholding (Harris and Raviv 1979;Buchko 1992). Second, employees with ownerships are likely to be more committed to the firm and stay in the firm for longer (Sengupta et al 2007;Yoon and Sengupta 2019). Therefore, employee ownership reduces a firm's incentives to manipulate reported performance with the aim of strengthening its bargaining powers against employees and managing the perceptions of employees about the firm's prospects.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Non-executive employee ownership and financial reporting quality: evidence from Europe

Adwan

Ismail

Jelic

2022

Rev Quant Finan Acc

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This paper examines the association between non-executive employee shareholding and financial reporting quality. The analysis is conducted using a sample of non-financial firms listed in eleven European countries between 2006 and 2017. We find a positive association between non-executive employee ownership and financial reporting quality. Furthermore, we find this positive association to be more pronounced for firms operating in the following settings: higher labour union density, more industry peer firms and more flexible labour market regulations. Overall, these findings support the view that employee shareholding enhances the quality of financial reporting by aligning the interests of employees with those of shareholders through two channels: reduced agency problems and enhanced employee retention. Our study contributes to the research on the impact of ownership characteristics on financial reporting incentives. It underscores the role non-executive employee ownership can play in improving a firm’s corporate governance and therefore the quality of financial reporting.

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Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Non-executive employee ownership and financial reporting quality: evidence from Europe

Adwan

Ismail

Jelic

2022

Rev Quant Finan Acc

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“…In Yoon and Sengupta, 2019, the published article contains errors in Table 4. The correct table is shown below.…”

Section: Economic Expansion Dependent Variable: Log10 Turnover Rate Variables Korea (2007) Britain (2004) Model A1 Model A2 Model A3 Modementioning

confidence: 99%

Erratum

2021

Industrial Relations Journal

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“…Kruse, 1992; Sengupta and Yoon, 2018; Yoon and Sengupta, 2019a). The mixed evidence has contributed to the emergence of contingency arguments that acknowledges the role of contextual factors in moderating this relationship (Kaarsemaker and Poutsma, 2006; Kruse et al , 2010; Sengupta, 2008; Yoon and Sengupta, 2019b). The emerging view is that broad-based ESO alone is not enough, and certain conditions must exist to yield desired productivity outcomes (e.g.…”

Section: Introductionmentioning

confidence: 99%

The role of business strategy on the adoption and effectiveness of broad-based employee share ownership

Yoon

Sengupta

2021

JOEPP

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PurposeIn this research, the authors try to answer the question of when broad-based employee share ownership (ESO) is more likely to be used and how it can be managed more effectively from the vertical fit perspective in strategic human resource management (HRM).Design/methodology/approachThe study analyzes an unbalanced panel sample of 614 organizations (1,601 organization-year data points) in South Korea, utilizing hierarchical linear modeling (HLM).FindingsThe analysis demonstrates that organizations are more likely to adopt broad-based ESO when they utilize the prospector and analyzer strategies as opposed to the defender strategy. The analysis also reveals that the relationship between broad-based ESO and labor productivity is positive only when organizations utilize the prospector strategy as opposed to other types of strategies (i.e. analyzer and defender strategies).Practical implicationsThe findings first indicate that the decision to adopt a broad-based ESO in organizations should be informed by their business strategy if they want to enhance labor productivity. Specifically, the results demonstrate that only the prospector firms, rather than defenders or analyzers, can reap the productivity benefit of broad-based ESO. Second, since innovation is a major source of productivity for prospector firms, the findings demonstrate that a broad-based ESO can be a vehicle that drives innovation. As a result, firms may want to consider utilizing broad-based ESOs to foster innovation.Originality/valueThe findings emphasize the relevance of the “vertical fit” perspective in examining the broad-based ESO and firm productivity relationship. Most past research utilized the “horizontal fit” framework in refining the relationship between broad-based ESO and productivity. Thus, the study emphasizes the need to utilize the “vertical fit” perspective, and not only the “horizontal fit” perspective, in the broad-based ESO research. Through this, the study meaningfully extends the research on the productivity effect of broad-based ESO by adding an important moderator (i.e. strategy) to the model.

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The effect of employee share ownership on employee commitment and turnover: comparing the cases in Britain and South Korea and the role of the economy

Cited by 4 publications

References 84 publications

Non-executive employee ownership and financial reporting quality: evidence from Europe

Non-executive employee ownership and financial reporting quality: evidence from Europe

Erratum

The role of business strategy on the adoption and effectiveness of broad-based employee share ownership

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