Inštitut za ekonomsko demokracijo

Employee ownership needs participation

Empirical studies have confirmed the intuition that employee ownership – to reach its full potential – should be followed up by an increased employee autonomy and participation. In the USA, the best results in terms of productivity, employee turn-over rates, company growth etc. are achieved by those ESOP companies that encourage workers to engage in decision making processes.

In a recent post by NCEO, D. Guzinski states that “while ESOPs are certainly meaningful tools for shared ownership, they act as a reward and benefit for the efforts of employee-owners and do not create engagement alone. Creating a true sense of ownership thinking and behavior requires a culture that goes the extra mile to meaningfully involve employees in all aspects of the businesses they own and work for.”

David Erdal, a member of our institute’s Experts Board, wrote in his book that “one of the strongest predictors of whether a person feels like an owner is how recently he or she has been involved in making an improvement. The more recent the involvement, the more positive the attitude.” He further explains that “the more you feel like an owner, the more you get involved in making improvements; and the more you make improvements, the more you feel that your ownership is real.” (Beyond the Corporation: Humanity Working, 2011).

Erdal’s beautifully written and well-argued book describes the process of transforming a family paper mill business with 1,400 employees into a fully employee-owned organization. David Erdal is one of our guest lecturers for the series of workshop on ownership continuation. You can see and listen to him in October. Stay tuned!



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