ESOP companies know that helping employees feel like an owner is key to getting the best outcomes. Still, creating that feeling in day-to-day operations is a complex task requiring more than just putting high-performance management practices in place. Companies must also create positive feelings and a connection to the company. This mindset can give ESOP companies a unique advantage over traditional companies.
Research recently published in the International Review of Applied Economics digs into exactly those concepts and their precise paths. In Feeling like owners: the impact of high-performance work practices and psychological ownership on employee outcomes in employee-owned companies, scholars Edward J. Carberry, Jung Ook Kim, Joo Hun Han, Dan Weltmann, Joseph Blasi, and Douglas Kruse use survey data from 881 employees in nine companies with ESOPs and present precise evidence of exactly how management practices translate into employee outcomes in ESOP companies.
The authors use high-powered statistical modeling to examine the role of psychological ownership in mediating the impacts of high-performance work systems (HPWS) on employee outcomes in EO companies. They track the implementation of these practices with employee perceptions of the extent of their own influence and control over work, business engagement in receiving information and training about the business, and receiving communications and information about the ESOP. Employee outcomes are measured by employee affective commitment and turnover intentions, as well as their voice (how likely they are to speak up) and helping (how likely they are to help other employees) behaviors.
They found that all three of the above practices are positively related to psychological ownership, providing evidence that employees will feel more like owners when they understand the object of ownership through EO communications, have extensive and intimate knowledge of the object of ownership through practices that promote business engagement, and have a sense of control over the object of ownership through influence in decision-making. This psychological ownership is positively associated with organizational commitment, intention to remain, voice behavior, and helping behavior.
These findings highlight the importance of not only implementing formal practices that empower employees with influence, information, and skills but also ensuring that these practices lead to employees actually feeling like owners. This often requires consistent and innovative communication methods. The NCEO has plenty of places to start improving your company's ownership culture, including publications like Beyond Engagement and remote-learning courses like our Communications Committee Crash Course.