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Employee Engagement through Employee Ownership

ESOP

Employee Engagement through Employee Ownership

By , June 11, 2018
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Recent research published by the University of York in the United Kingdom has found that in comparison to several other employee engagement models, employee ownership was a KEY FACTOR in engagement due to the presence of psychological ownership.

In psychology, ownership is the feeling that something is yours.

Psychological ownership is distinct from legal ownership: one may feel that one’s cubicle at work is theirs and no one else’s (i.e. psychological ownership), but legal ownership of the cubicle is actually conferred to the organization.

A central belief of psychological ownership is that employees share the long-term interests of the business and its owners.

Psychological ownership refers to the experience of possessing and being psychologically tied to an entity. Such feelings of ownership are fundamental to human life. Every day, we interact with a variety of objects we own, both material and immaterial. The state of psychological ownership is not only cognitive but also affective: simply by calling an entity — whether an object, another person, or a job — “mine” suggests that we have an emotional connection to it.

Employees often express a desire for greater psychological ownership of their work, believing this will improve their job satisfaction and happiness.

This factor added an additional dynamic to engagement as the meaning of work was influenced by employee ownership. “Family culture” was present in the organisations which drove employee ownership values. Social, affective, and intellectual engagement and vigour, dedication and absorption were found to be influenced by the presence of employee ownership.

 

Employee Ownership

When employees are also owners, their relationship with the organisation is changed and this affects the way they think and behave. Theory and research on employee ownership suggests that employee-owners exhibit behaviours that are intended to enhance the financial status of the organisation. These include improving their job performance, finding ways to cut costs and suggesting innovative ways to increase revenues.

 

Employee Engagement

The study concludes with two key statements; that employee engagement “enhances the experience of employee ownership and employee ownership influences employee engagement.”  Finally, that “employee ownership plans encourage employees to think and act like owners, and this enhances organisational performance”.

How do you encourage psychological ownership and an ownership mindset in your organisation?

"When employees are also owners, their relationship with the organisation is changed and this affects the way they think and behave. "

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Craig West

Craig West

Executive Chairman | Succession Plus

Craig West is a strategic accountant with over 20 years of experience advising business owners. His background as a CPA in public practice has provided invaluable experience in the key issues of concern to business owners.

In March 2014, Craig was appointed Executive Chairman of the SME Association of Australia, Australia’s largest small business organisation representing over 300,000 business owners.

In October 2014, he was awarded the Exit Planner of the Year at the Exit Planning Institute Annual Conference in Texas, USA, due to his innovative development of an exit planning process to help business owners maximise business value and achieve a successful exit.

Craig’s proprietary structure - a Peak Performance Trust - has won the Australia-wide award for the Employee Share Ownership Plan of the year twice in four years.

In November 2018, Craig launched SME Experts in partnership with Mark Bouris’ Mentored on Podcast One and quickly grew the monthly podcast audience to over 26,500 downloads; in October 2019, he released a new podcast focused on medium-sized businesses - Mid-Market Matters.

In July 2021, Craig joined the NSW Committee for STEP (Society of Trust & Estate Practitioners) – focusing on advising families across generations.

Craig has also launched a SaaS platform, Capitaliz (which captures the 21-step process), to assist other advisers internationally deliver advisory services at scale.

In November 2021, Craig was appointed Executive Chairman of NSW Leaders, a business mentoring group for leading NSW businesses.

In July 2022, Craig West received the award of Doctor of Business Administration for his research thesis titled “Examination of the key factors driving business exit options in Australian Small and Medium Enterprises.”

Craig is passionate about encouraging business owners to think strategically, maximise the value of their business and achieve a successful exit.

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