This article investigates the association between employee share ownership (ESO) and employee involvement (EI) in an employee-owned firm. Based on data from the firm's employers and employees, the article concludes that the mere presence of share ownership is no guarantee of increased involvement for employees, highlighting instead the significance of other variables.Over the last two decades ESO has been hailed as a 'phenomenon of considerable importance ' (Wilson et al. 1995). It has been credited with bringing some measure of employee control to the production process (Pendleton et al. 1996), providing opportunities for employees to share in the rewards of work (Hyman and Mason 1995;Kelly and Kelly 1991;Poole and Jenkins 1990) and thus motivating them to work harder (Heller et al. 1998). Moreover, where an increase in involvement in decision-making occurs, positive effects upon employee job attitudes (including more co-operative behaviours between employers and employees) and productivity are anticipated (Long 1978). Specifically, systems of ownership can allow employees the opportunity to increase their involvement in the workplace, improve their level of financial understanding and the degree of communication they have with management (Poole and Jenkins 1990). In summary, proponents have highlighted the potential of ESO to create organisational cultures symbolising co-operation, flexibility and shared goals (Wilson 1992).Despite the claims made for ESO, studies undertaken to assess its effects have produced mixed results. Wilson et al. (1995: 3) referred to the 'methodological shortcomings' characteristic within much of the UK literature 'to the extent that it is difficult to quantify the effects of share ownership upon employee attitudes'. Specifically, reliance solely upon univariate and bivariate methods of analysis adopted in many UK studies has tended 'to preclude a precise assessment of the causal efficacy of Ì Lisa Trewhitt is a Research Officer for the Management Pay Review, Incomes Data Services.
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