What Is Employee Ownership

The clear explanation for the term “Employee Ownership” refers to the status of the ownership of a company which is own by all or some of its employees. This could either be in a part or in whole, or even indirectly or directly. One of the most known elements of Employee Ownership is the ESOP, which is short for Employee Stock Ownership Plan, which gives the opportunity to the employees of a company to own stocks of the company that they are currently working for.

There are so many reasons why or how a company would approach the Employee ownership method. One of the main reasons is to increase employee loyalty by selling and allowing them to own stocks of the company. This will ultimately create a shared interest to work together towards helping the company grow, which will increase the productivity of the entire company. Other reasons are the likes of ownership succession, where the private owner decides to retire and sell off the company, hence selling the stocks to the trusted workforce to take over. It may also sometimes be perceived as a last result for failing companies.

More and more people are paying attention to employee ownership for a lot of reasons. According to a research done by a marketing research group, 53{3c5802b77c14a4ba022598d3a11182313bf9a64b223d6cc2639c66b4f8f7093e} of UK workers claimed that they will be much more productive and motivated if they were able to share the profits that their company gets. Many experts believe that with employee ownership, many workers will pay more attention to details of their work and ensure quality results. This will actually not only help the company to grow, but also help to contribute towards a better economy.

However, just like everything else in the world, employee ownership has its haters too. Those who are against the idea of employee ownership claims that this kind of business plan will break the boundaries between management and labour, and it will result in plenty of conflict between labour and management. This could be due to the employees holding stocks and have ownership of the company, so they will want to have their say.

Employee ownership has its pros and cons as well. The positive side is that employee ownership helps to improve the quality of work from employees as there is motivation for greater income, and it provides them with the peace of mind of having job security and control over jobs. In the end it is all about how the company manages the plan and management.

Read more about Employee Ownership:
Employee Ownership Association (UK)