Employee Ownership and/or Profit Sharing as an Effective Tool for Motivating Employees.

Essay by iclampersUniversity, Bachelor'sA-, January 2006

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Research has shown that employee ownership can improve motivation as well as company performance, but only under certain conditions. The challenge is to determine what those conditions are. Since motivation is a key factor then we need to also look at the psychological perspective. The psychological perspective assumes that the way people interpret ownership has a more direct impact on company performance than legal structures or vision statements do.

The most common obstacle to the success of the ownership incentive is failure to properly educate the work force. For ownership to be an effective incentive it is not enough that employees actually will share in the company success, they must also believe that they will.

The information in this report is based on data gathered from surveys conducted by Ownership Associates. Ownership Associates is an international consulting firm providing a range of services to corporations interested in broadening ownership and workplace participation opportunities for employees.

In 1994 Ownership Associates launched the Ownership Culture Survey® (OCS), a survey instrument developed exclusively for the needs of employee-owned companies. Their clients range from Fortune 100 corporations to small, privately-held companies which gives a broad spectrum when considering the effects on employee motivation.

Defining Ownership

Ownership means different things to different people depending where they fit into the organizational structure of their company. Its more the working definition of ownership rather than the legal definition that affects how people perceive these structures.

The Ownership Associates Ownership Culture Survey® (OCS) asks employees what first comes to mind when they think of ownership. Some of the responses include; investment, incentive, teamwork, bogus, equality, a good benefit, employee involvement and what is it?

Ownership Associates have done surveys with ownership companies for over 14 years and from...