Employee Ownership, Employee Attitudes, and Firm Performance

Abstract

Employee ownership in U.S. companies has grown substantially in the past 20 years. This paper reviews and provides some meta-analyses on the accumulated evidence concerning the prevalence, causes, and effects of employee ownership, covering 25 studies of employee attitudes and behaviors, and 27 studies of productivity and profitability (with both cross-sectional and pre/post comparisons). Attitudinal and behavioral studies tend to find higher employee commitment among employee-owners but mixed results on satisfaction, motivation, and other measures. Perceived participation in decisions is not in itself automatically increased through employee ownership, but may interact positively with employee ownership in affecting attitudes. While few studies individually find clear links between employee ownership and firm performance, meta-analyses favor an overall positive association with performance for ESOPs and for several cooperative features. The dispersed results among attitudinal and performance studies indicate the importance of firm-level employee relations, human resource policies, and other circumstances.