Employee financial participation: evidence from a major UK retailer

Abstract

PurposeThe bulk of research on approved profit sharing and SAYE schemes tends to focus on the effects of their presence/absence, which says little about how effectively such initiatives are implemented, particularly with regard to different categories of employee. This paper seeks to contribute towards filling that gap through comparing responses between different categories of employee, and the relative effects of differing forms of financial participation.Design/methodology/approachThe paper shows that the population for the study consisted of employees in a large (153,000 employees) retail organisation in the UK. A stratified proportionate random sampling procedure was adopted to include employees at the managerial/non‐managerial levels and in shareholder/non‐shareholder groups. A total of 1,000 questionnaires were mailed to a broad spectrum of employees and a total of 430 usable returns were received. The survey results were analysed using regression analysis.FindingsThe paper found that more junior employees are less likely to choose to actively buy into profit sharing and share ownership schemes; among workers in the lower job bands, the rewards accruing from participation in such schemes are likely to be the least, yet it is there that the effects of any undermining of collective solidarities are likely to be particularly pronounced.Research limitations/implicationsThe paper shows, while based on the case of a single large enterprise, this case study highlights something of the contradictions and limitations of flexible reward systems.Originality/valueThe paper highlights the divergent effects of individualized forms of participation. On the one hand, financial participation lengthens the reward cycle; employees will be encouraged to remain with the firm, to maximise their shareholdings. On the other hand, a greater individualisation of reward systems will undermine notions of collective solidarity; workers will have different agendas according to individual choices made regarding the scale of participation in such schemes. This central contradiction will be particularly pronounced among workers in the lower job bands, where the rewards accruing from participation in such schemes is likely to be the least, yet it is there that the effects of any undermining of collective solidarities is likely to be particularly pronounced.