Pieces of the Action: Ownership and the Changing Employment Relationship

Rousseau, Denise M.; Shperling, Zipi

doi:10.5465/amr.2003.10899368

Cited by 155 publications

(72 citation statements)

References 42 publications

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“…Employee ownership plans can be classified into six broad areas: (a) whether employees purchase company stock or they receive it as benefits; (b) if stock is purchased, do the employees receive it at a discount; (c) whether employees receive voting rights for owning firm stock; (d) differences in legal requirements related to the structure of the employee ownership plan; (e) whether employees are allowed to use pay from gainsharing plans to buy company stock; and (f) whether employees voluntarily participate in the plan. Variations in firm motives, country and institutional differences result in a tapestry of ‘distribution of claims and privileges’ (Rousseau and Shperling, : 553) among employees in firms and across countries. Given our brief overview and inability to review this rich and diverse body of work beyond this meta‐analysis, we refer readers to comprehensive reviews in Carberry (), Kruse et al () and Kaarsemaker ().…”

Section: Theory Developmentmentioning

confidence: 99%

Employee ownership and firm performance: a meta‐analysis

O’Boyle

Patel

Gonzalez‐Mulé

2016

Human Res Mgmt Journal

105

115

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Employee ownership has been an area of significant practitioner and academic interest for the past four decades. Yet, empirical results on the relationship between employee ownership and firm performance remain mixed. To aggregate findings and provide potential direction for future theoretical development, we conducted a meta‐analysis of 102 samples representing 56,984 firms. Employee ownership has a small, but positive and statistically significant relation to firm performance ( truer¯ = 0.04). The effect is generally positive for studies with different sampling designs (samples assessing change in performance pre‐employee–post‐employee ownership adoption or samples on firms with employee ownership), different performance operationalisation (efficiency or growth) and firm type (publicly held or privately held). Suggesting benefits of employee ownership in a variety of contexts, we found no differences in effects on performance in publicly held versus privately held firms, stock or stock option‐based ownership plans or differences in effects across different firm sizes (i.e. number of employees). We do find that the effect of employee ownership on performance has increased in studies over time and that studies with samples from outside the USA report stronger effects than those within. We also find little to no evidence of publication bias.

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Section: Theory Developmentmentioning

confidence: 99%

Employee ownership and firm performance: a meta‐analysis

O’Boyle

Patel

Gonzalez‐Mulé

2016

Human Res Mgmt Journal

105

115

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“…Startups give equity stakes in order to attract executive hires, align their incentives, and heighten the sense of ownership (see Rousseau and Shperling, ). In addition, because they typically must conserve their cash, they often include equity stakes in the compensation package in order to be able to pay lower salaries.…”

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confidence: 99%

The throne vs. the kingdom: Founder control and value creation in startups

Wasserman

2016

Strategic Management Journal

166

148

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Research summary: Does the degree to which founders keep control of their startups affect company value? I argue that founders face a “control dilemma” in which a startup's resource dependence drives a wedge between the startup's value and the founder's ability to retain control of decision making. I develop hypotheses about this tradeoff and test the hypotheses on a unique dataset of 6,130 American startups. I find that startups in which the founder is still in control of the board of directors and/or the CEO position are significantly less valuable than those in which the founder has given up control. On average, each additional level of founder control (i.e., controlling the board and/or the CEO position) reduces the pre‐money valuation of the startup by 17.1–22.0 percent. Managerial summary: A founder's vision and capabilities are key ingredients in the early success of a startup. During those early days, it is natural for the founder to have a powerful, central role. However, as the startup grows, founders who keep too much control of the startup and its most important decisions can harm the value of the startup. Both qualitative case studies and quantitative analyses of more than 6,000 private companies highlight that startups in which the founder has maintained control (by retaining a majority of the board of directors and/or by remaining as CEO) have significantly lower valuations than those where the founder has relinquished control. This is especially true when the startup is three years old or more. Copyright © 2015 John Wiley & Sons, Ltd.

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“…One of the commitment-based human resource practices is the compensation practice such as employee ownership that focuses employee motivation on group and organizational performance indicators. Employee ownership represents an important motivational tool in organizations [30]. Employee ownership represents an important motivational tool in organizations [30].…”

Section: An Abridged Overview Of Team Performance Literaturementioning

confidence: 99%