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

an article by Keith Whitfield (Cardiff University, Cardiff, UK), Andrew Pendleton (University of Durham, Durham, UK), Sukanya Sengupta (Royal Holloway College, University of London, UK) and Katy Huxley, (Wales Institute of Social and Economic Research, Data and Methods, Cardiff University, UK) published in Personnel Review Volume 46 Issue 7 (2017)

Abstract

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.

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Enriched job design, high involvement management and organizational performance: The mediating roles of job satisfaction and well-being

an article by Stephen Wood (University of Leicester), Lilian M de Menezes (Cass Business School, City University London) and Marc Van Veldhoven and Marcel Croon (Tilburg University, The Netherlands) published in Human Relations Volume 65 Number 4 (April 2012)

Abstract

The relationship between organizational performance and two dimensions of the ‘high performance work system’ – enriched job design and high involvement management (HIM) – is widely assumed to be mediated by worker well-being.

We outline the basis for three models:

• mutual-gains, in which employee involvement increases well-being and this mediates its positive relationship with performance; 
• conflicting outcomes, which associates involvement with increased stress for workers, accounting for its positive performance effects; and
• counteracting effects, which associates involvement with increased stress and dissatisfaction, reducing its positive performance effects.

These are tested using the UK’s Workplace Employment Relations Survey 2004.

Job satisfaction mediates the relationship between enriched job design and four performance indicators, supporting the mutual gains model; but HIM is negatively related to job satisfaction and this depresses a positive relationship between HIM and the economic performance measures, supporting a counteracting effects model.

Finally, HIM is negatively related to job-related anxiety–comfort and enriched job design is unrelated to it.

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