The Fit of Employee Ownership with Other Human Resource Management Practices: Theoretical and Empirical Suggestions Regarding the Existence of an Ownership High-Performance Work System

Abstract

This article embeds employee ownership within a strategic human resource management (SHRM) framework, and in so doing, aims to redress in part a lack of attention in previous employee ownership and SHRM literatures. The study extends the configurational approach to SHRM to include the construct of the workforce philosophy as the factor that determines the coherence of HRM systems. Companies that have employee ownership as a central element and core HRM practice should do two things in order to ensure that their HRM system is coherent and potentially a high-performance work system (HPWS). First, these firms should propagate the idea that employees deserve to be co-owners and take employees seriously as such. Second, the HRM system should reflect this workforce philosophy: the HRM system should contain HRM practices that mirror the rights that make up the very construct of ‘ownership’. The core HRM practices of the ‘ownership-HPWS’, in addition to employee ownership, are: participation in decision-making, profit sharing, information sharing, training for business literacy and mediation.

Trends in employee ownership in Eastern Europe

“…This may include participation in ownership in different forms as profit-sharing, minority employee shares or representation in different decision making bodies (Kaarsemaker and Poutsma, 2006). In this way some of the advantages with employee ownership is exploited without loss of the decisive control for the external investors.…”

Corporate governance and strategic human resource management: Four archetypes and proposals for a new approach to corporate sustainability

“…These include: social ownership, worker/producer co-operatives, direct ownership, and employee stock option plans, the last of which has been heavily promoted in the U.S. and U.K. (Pierce et al, 1991). A common theme is that a significant number of employees, usually more than fifty percent, are entitled to have a capital stake in the organization, and to have a heightened level of voice and participation (in some form) in the decision-making in the firm (Kaarsemaker and Poutsma, 2006). A corollary of this is that the governance structure is arranged so that employees receive enhanced communication and information and are seen as co-owners, thus embracing a democratic logic as dominant.…”

Employee Voice through Open-Book Accounting: The Benefits of Informational Transparency

“…According to Kaarsemaker and Poutsma (2006), there are five core practices within high performing employee-owned firms: participation in decision-making, profit-sharing, information sharing, training for business literacy and mediation. We argue that open-book accounting intersects closely with 'information sharing' and 'training for business literacy'.…”