JournalTOCs

Journal of Participation and Employee Ownership
Number of Followers: 0

Hybrid journal (It can contain Open Access articles)
ISSN (Online) 2514-7641
Published by Emerald

[360 journals]

Property, ownership and employee ownership: employee control in ESOPs
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  Authors: Mark J. Kaswan
  Abstract: Most people associate ownership with the ability to control something. In the USA, employee share (or stock) ownership plans (ESOPs) are one of the principal forms of employee ownership. However, most ESOPs give employees very limited rights of control over the company they own. This paper explore this conflict by examining theories of property and ownership to determine whether the right to participate in decision-making is inherent in the idea of ownership as it is generally understood. Ultimately, the author argues that the law governing ESOPs should be revised to give employees a larger role in the governance of their companies. This paper considers the concept of ownership both historically and analytically. The author examines the roots of property theory in the work of John Locke and contemporary theorists, as well as contemporary theorizing about ownership. There are two kinds of ownership: legal ownership and psychological ownership. In legal ownership, the right to participation is inherent but alienable, so one can legally be an owner of something but have no right of participation. Psychological ownership primarily arises from a sense of control. Legal ownership confers some part of the bundle of rights associated with property. Psychological ownership conveys a feeling of efficacy, responsibility and control, but no formal rights. The author argues that, for employee ownership to be more than mere property-holding, it must include meaningful participation in decision-making, including governance. This paper is only concerned with ESOPs in the USA. Although the findings may be applicable, it does not address other forms of employee ownership or employee ownership outside of the USA. People associate ownership with the ability to control something, so when workers are told they own their company but then find they have few control rights, it may undermine their sense of ownership. This then has negative implications for the company's success. To ensure meaningful levels of governance rights, policy-makers should revise the laws governing ESOPs to require greater involvement by employees. Clarifying ambiguities around ownership will help support arguments for affording employee-owners greater control rights in their companies, which will have various spill-over effects. Practitioners and scholars alike deploy the term, “ownership” but ascribe different meanings to it. The distinction between legal and psychological ownership is largely lacking in the ESOP literature. Clarifying this distinction will help to move the discussion forward regarding employee participation in ESOPs. In addition, the paper provides an original analysis of property that demonstrates the importance of the right to control, showing that the traditional ESOP structure may violate important aspects of that right.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2022-03-23
  DOI: 10.1108/JPEO-11-2020-0028
  Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
Employee ownership and firm R&D investment: evidence from China
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  Authors: Ting Ren , Youzhi Xiao , Daniel Pinto , Hongyan Yang
  Abstract: As majority of studies of employee ownership (EO) take place in developed markets and primarily focus on the impact on firm performance, scholars have recently called for other markets, especially large developing markets to be considered, as well as alternative outcome measures. Through the examination of the implementation of EO by Chinese listed firms during the period of 2011–2019 with total 3,473 firms and 21,204 observations, the authors provide empirical evidence on the positive effect of EO on firm R&D investment within the rapidly growing Chinese market. The authors find that the adoption of EO promotes higher level of firm R&D investment. This positive relationship is more evident among small firms, non-state-owned firms and local state-owned-firms, compared with their counterparts. As for the plausible channels, the authors find that adopting EO provides a favorable institutional environment, which attracts more technical staff, improves workplace quality, and encourages job stability and greater employee effort, leading to greater R&D investment. Though the connection between R&D investment/innovation and firm survival performance has been known for decades, the innovation side of outcomes has been ignored by EO research. Therefore, the authors explore the relationship between EO implementation and firm R&D investment within the rapidly growing Chinese market.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2022-02-10
  DOI: 10.1108/JPEO-02-2020-0004
  Issue No: Vol. ahead-of-print , No. ahead-of-print (2022)
Employee participation, job quality, and inequality
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  Authors: Felix R. FitzRoy , Michael A. Nolan
  Abstract: The purpose is to review the effects of employee participation (EP) in decision-making, ownership and profit on job quality, worker well-being and productivity, and derive policy recommendations from the findings. The authors summarise results of “declining labour power”, plus theoretical arguments and empirical evidence for the benefits of EP for job quality, satisfaction and productivity. Worker well-being and job satisfaction are ignored unless they contribute directly to profitability. EP is needed to remedy this situation when employers have market power and unions are weak. The result can be a rise in both productivity and well-being. The chief issue here is that there are data limitations, particularly on the well-being effects of participation. Lots of encouraging examples in many countries need legislative help to multiply. It is quite possible that there could be major implications for welfare and employment. The authors make the case for public sector subsidies for employee buyouts and new cooperative start-ups, as well as legislation for works councils and profit sharing.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2021-09-21
  DOI: 10.1108/JPEO-05-2020-0014
  Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
The potential benefits of employee equity funds in the United States
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  Authors: Lenore Palladino
  Abstract: The mainstream framework for corporate governance is that all corporate activity should be directed towards shareholder wealth maximization. This article posits that public policy should move away from shareholder primacy and instead recognize employees as key contributors to corporate value-creation. One way to implement this approach is to require the creation of Employee Equity Funds (EEFs) at large corporations, which would pay employees dividends alongside external shareholders and establish a collective employee voice in corporate governance. EEFs may reduce economic inequality while improving firm performance and macroeconomic stability. This article provides an original estimate of average employee dividends, illustrating the potential of employee equity funds. Analysis of employee dividends for Employee Equity Funds at large U.S. corporations, using publicly available corporate finance data. Based on historic dividend payments and employee counts in public 10-K filings, I find that, if EEFs held 20% of outstanding equity, the average employee dividend across this sample would be $2,622 per year, while the median is $1,760. This indicates that employee dividends can be a small but meaningful form of redressing wealth inequality for the low-wage workforce, though it should emphatically not be seen as a replacement for fair wages. Original data analysis of a proposed policy reform to increase the benefits of employee equity in the United States.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2021-07-07
  DOI: 10.1108/JPEO-08-2020-0023
  Issue No: Vol. ahead-of-print , No. ahead-of-print (2021)
Survival advantage of worker buyouts over newly created worker-owned firms
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  Authors: Thibault Mirabel
  Abstract: Various theories predict that firm buyouts survive longer than newly created firms. The study aims to know whether it is the case for worker-owned firms (WOFs), i.e. firms owned and controlled mostly by their workers. The author conducted a comparative survival analysis of French WOFs distinguished by their entry mode (i.e. newly created, worker buyouts (WBOs) of sound conventional firms, WBOs of conventional firms in difficulty or WBOs of non-profit organizations). The hazard of exit is 32% lower for WBOs of sound conventional firms than newly created WOFs, 18% for WBOs of conventional firms in difficulty and 64% for WBOs of non-profit organizations. The current study confirms that WBOs, even of conventional firms in difficulty, have on average a survival advantage over newly created WOFs. Surprisingly, the author also shows that this survival advantage is similar across sectors with different knowledge intensity but is lower in high capital-intensive sectors than in low capital-intensive ones. Endogeneity issues limit the scope of the results and should be tackled in future research. Overall, these findings show that WOFs are composed of groups with different survival likelihoods that are obscured if one only looks at the aggregate population. With caution, support agencies could foster WBOs of firms in difficulty and of non-profit organizations as viable forms of entrepreneurship. The current study offers the first survival analysis distinguishing four modes of entry among WOFs.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2021-10-29
  DOI: 10.1108/JPEO-08-2021-0006
  Issue No: Vol. 4 , No. 3 (2021)
Footsie, yeah! Share prices and worker wellbeing
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  Authors: Alex Bryson , Andrew Clark , Colin Green
  Abstract: A small literature has shown that individual wellbeing varies with the price of company stock, but it is unclear whether this is due to wealth effects amongst those holding stock, or more general effects on sentiment, with individuals taking rising stock prices as an indicator of improvements in the economy. The authors contribute to this literature by using two data sets to establish the relationship between share prices on the one hand and worker wellbeing on the other. First, the authors use over 20 years of British panel data to show that employee happiness and job satisfaction moves with share prices among those whose pay is partly determined by company fortunes. The authors then examine share price movements and employee stock holding in a single corporation and provide suggestive evidence that an increase in the firm’s stock price increases the well-being of those who belong to its employee share purchase plan (ESPP). These effects are greatest among those making the largest monthly contributions to the program who have the most to gain (or lose) from stock price fluctuations. There is also tentative evidence that the well-being effects of a higher share price are larger for those who hold more shares. Taken together these results suggest that, although stock price movements have little effect on well-being in the population at large, the well-being of those holding stock in their own company rises when the price of that stock is higher, suggesting the effects of share prices work at least partly via changes in wealth. Taken together these results suggest that the wellbeing effects of share prices work at least partly via changes in wealth. The authors cannot be certain that the job satisfaction movements they see are causally linked to share plan participation and bonus receipt. Future research might fruitfully examine the mechanisms at play, and whether the effects identified here are linked to differences in employee motivation and effort over the business cycle. Firms may wish to consider the appropriateness of linking their workers’ pay to firm performance through share plans or profit shares to establish whether this improves worker wellbeing. The utility of workers may increase where firms offer some compensation via a share plan or profit share. The literature suggests a link between share price movements and worker wellbeing, but the reasons for the link are contested. Using two very different data sources, the authors are able to show that share price increases induce higher worker wellbeing, at least in part, through wealth effects.
  Citation: Journal of Participation and Employee Ownership
  PubDate: 2021-10-21
  DOI: 10.1108/JPEO-09-2021-0010
  Issue No: Vol. 4 , No. 3 (2021)
Journal of Participation and Employee Ownership
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