Abstract
The objective of this study was to investigate some of the problems associated with the introduction and successful management of Employee Share Ownership Schemes (ESOPs). An ESOP is a participative management approach that appeals to some of the needs of both employees and management. The study considered how perceptions of ESOPs can be influenced and managed through managerial antecedents such as trust, empowerment and communication, and empirically measures their impact on outcome variables such as organisational commitment.The empirical findings revealed that if employees have positive perceptions of their firm’s ESOP (the value and benefit for them) they are more likely to be committed to their firm (organizational commitment) and organizational commitment has been shown to lead to a host of benefits for the firm.
Highlights
In the South African business environment there is often a wide gap between management objectives and employee expectations
According to Nyhonyha and Braithwaite (1996), union representatives indicated that they were prepared to support employee share ownership schemes (ESOPs), provided that principles such as the following are upheld: that wage levels and conditions of employment are independent of share ownership; that all employees are eligible for shares; that shares are self-financing; that democratically controlled employee share trusts are formed; that plans are subject to full consultation and decision-making; that trade unions are involved from the initial planning onwards; and that there is full disclosure of information regarding the ESOPs and the companies concerned
The independent variables can be classified under four basic headings, namely: those primarily influenced by the trade unions, those primarily influenced by management, those primarily influenced by the prevailing general working environment, and those directly related to ESOPs themselves
Summary
In the South African business environment there is often a wide gap between management objectives and employee expectations. In the absence of sufficient interaction with management and little interaction when negotiating service conditions, employees could feel demotivated They may be in a routine of working to satisfy increasing demands without recognising the need to improve their own contribution to the process of business (this could be one of the reasons why South Africa's productivity has been poor). According to Nyhonyha and Braithwaite (1996), union representatives indicated that they were prepared to support ESOPs, provided that principles such as the following are upheld: that wage levels and conditions of employment are independent of share ownership; that all employees are eligible for shares; that shares are self-financing; that democratically controlled employee share trusts are formed; that plans are subject to full consultation and decision-making; that trade unions are involved from the initial planning onwards; and that there is full disclosure of information regarding the ESOPs and the companies concerned. This study considered how perceptions of ESOPs can be influenced and managed through managerial antecedents such as trust, empowerment and communication, and empirically measures the impact of perceptions on outcome variables such as organisational commitment
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