Demographic and Attitudinal Correlates of Employee Satisfaction with an ESOP

Abstract

A firm's adoption of an employee stock ownership plan (ESOP) has been hypothesized to increase employee productivity. Resulting employee productivity is hypothesized to improve firm profitability and thus ultimately improve stock performance. Most studies to date have tested potential relationships between the mere presence of an ESOP and changes in employee productivity and firm profitability. Few studies have attempted to identify the variables that are associated with employee satisfaction with an ESOP. In order to maximize the productivity gains associated with the adoption of an ESOP, researchers must first identify the relationships and variables most likely to positively affect employee attitudes and subsequently their satisfaction toward an ESOP. The purpose of this paper is to identify the demographic and attitudinal correlates of employee satisfaction with an ESOP. This exploration will provide a more substantive foundation for future research efforts in the area. Correlation and regression results indicated that employees' perceived influence on decision‐making, perceived pay equity and perceived influence on stock performance, when examined separately, were each significant correlates of ESOP satisfaction. When combined with the modelled employee demographics in a step‐wise regression model, only employees' perceived influence on stock performance, perceived influence on decision‐making and age explained a statistically significant amount of variance in ESOP satisfaction.