ESOP & Productivity

by Sunanda K. Chavan on Thursday 12 May 2011, 10:58 AM | Category: Employee Retention| View: 2482 views
 
 
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Employee ownership means ownership by employees all or few of a company. This can be direct or indirect. Employee Stock Ownership Plan is an employee benefit program which enables the employees to become owners of the stocks of the company they work for.  Majority believes that it is possible to attain better economic performance of the organization through enhanced motivation and commitment which, in turn, is attained through the concept of employee ownership.  With this scheme in office employers believe that employees get more dedicated and motivated to work simultaneously without much efforts to be put in. But the way people interpret ownership is really important that has a direct impact on performance of the employee. Extensive research on employee ownership points to the fundamental relationship between participation in decision making processes by the employees and positive ESOP performance.  Employee ownership, managers try to maintain a high commitment workplace, and employees exert pressures to increase job security.  Though employee ownership provides a distinct solution to the incentive problem, it has to deal with problems like participation and free riding. Employee ownership has positive effects on the employees if they perceive that it helps in bringing greater income, control over jobs and job security.

 

 

Employee ownership has gained a lot of attention due to various reasons. Majority believes that it is possible to attain better economic performance of the organization through enhanced motivation and commitment which, in turn, is attained through the concept of employee ownership.

 Employee ownership may imply collective practices but this does not always happen.The government's new scheme, being based on tax incentives, is individualised.The report, however, makes a case for the collective voice of employee owners and shareholders being integral to realising the full potential of employee

These are risky times for shareholders, but there is no better time to put the spotlight on employee ownership. People are at the heart of the productivity challenge.The skills, flexibility and ability to adapt of workers are key components of broader economic performance. Creative, knowledge-rich, innovative, highly productive work requires a high trust, people-driven organisation.

 

 

 

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