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Employee share ownership and organisational performance: a tentative opening of the black box

Whitfield, Keith ORCID:, Pendleton, Andrew, Sengupta, Sukanya and Huxley, Katy ORCID: 2017. Employee share ownership and organisational performance: a tentative opening of the black box. Personnel Review 46 (7) , pp. 1280-1296. 10.1108/PR-09-2016-0243

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Purpose – A range of studies have shown that performance is typically higher in organisations with employee share ownership (ESO) schemes in place. Many possible causal mechanisms explaining this relationship have been suggested. These include a reduction in labour turnover, synergies with other forms of productivity-enhancing communication and participation schemes, and synergies with employer-provided training. The paper aims to discuss these issues. Design/methodology/approach – This paper empirically assesses these potential linkages using data from the 2004 and 2011 British Workplace Employment Relations Surveys, and provides comparisons with earlier analyses conducted on the 1990 and 1998 versions of the survey. Findings – Substantial differences are found between the 2004 and 2011 results: a positive relationship between ESO and workplace productivity and financial performance, observed in 2004, is no longer present in 2011. In both years, ESO is found to have no clear relationship with labour turnover, and there is no significant association between turnover and performance. There is, however, a positive moderating relationship with downward communication schemes in 2004 and in 2011 in the case of labour productivity. There is no corresponding relationship for upward involvement schemes. Research limitations/implications – The results are only partially supportive of extant theory and its various predictions, and the relationship between ESO and performance seems to have weakened over time. Originality/value – The study further questions the rhetoric offered in support of wider ESO.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Social Sciences (Includes Criminology and Education)
Wales Institute of Social & Economic Research, Data & Methods (WISERD)
Publisher: Emerald
ISSN: 0048-3486
Date of First Compliant Deposit: 11 December 2017
Date of Acceptance: 25 May 2017
Last Modified: 05 May 2023 09:25

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