Employee interpretations of employee share ownership and its impact: the role of psychological ownership

This interpretive study explores the effect of employee share ownership (ESO) plans (SIP, EMI and SAYE) on employee attitudes and behaviours at work by taking into account the role of Psychological Ownership (PO), characterised by feelings of "mine" and "ours". The key concepts and relationships specified in positivist causal models of ESO and PO were translated into a set of interview questions and were used to explore with 37 ESO plan participants and 9 ESO plan managers whether the causal models fit with the way they explain for themselves their experiences of and reactions to employee share ownership. In doing this, the study has responded to suggestions made in the research literature to compare the attitudinal effects of different types of employee ownership, avoid the manipulation of large, readily available data sets, and to provide insights into the causal processes surrounding ESO. Overall, three main themes can be identified from employees responses, which appeared to have some influence on whether or not the share plan was felt to have an impact. First, employees interest in making money, and expectations of whether they would, played a large part in their explanations of ESO s impact. A number of employees felt the share plan helped retain them in the organisation. However, this did not appear to be because the plan was making then more committed, in the sense that they would feel more emotionally attached, or a greater sense of identification with the company. Instead, the plan was retaining employees by causing them to make an assessment of the costs associated with leaving (continuance commitment). Second, many of the ESO outcomes featured in the academic literature were already felt to be experienced by employees at work and ESO was felt to only be able to add in a small way to what was already being experienced. Finally, in some situations ESO represented something quite meaningful to employees. ESO was sometimes interpreted as being a sign that the company valued employees, wanted them to feel part of the company, or that the employees were important to the company. The offer to participate in ESO was interpreted in some cases as being an acknowledgement of hard work, and an indication of how the company wanted employees to feel. This was found to enhance ESO s capacity to impact how employees felt at work. However, with regards to most outcomes explored in this study, employees reported little or no impact from ESO. Findings suggested that the ESO plans, even when they were felt to lead to feelings of PO, provided little incentive to work harder. PO was also found to play little or no part in employees explanations of how share plans had an impact or why they did not. Employees felt they had a long wait before making a financial return and no tangible day to day benefits of ESO. This led the plans, and the potential gains that could be made, to be perceived as very long term, and easily forgotten. Finally, this study highlights a mismatch between the causal models of ESO and PO, the conventional wisdom of ESO, the views of the ESO managers, and the interpretations of the employees who were interviewed and raises the question of whether ESO achieves what it is intended (and often believed) to achieve.