The retail company I work for is cutting its employee-share-ownership program.
No reason was given, but the store I work at is converting to a franchise. I know that the conventional thinking is that employees who are shareholders are more engaged and productive. Regrettably, I think it hasn't worked here. Many colleagues just sell their shares every year. They don't get the big picture.
My disappointment has more to do with the lack of interest and understanding by my colleagues. They have no idea what has been taken away from them, and their silence is deafening.
I think most of my colleagues have a good work ethic, but that's not enough to get you through a long career. Work ethic is not exciting; ownership is. How do you get employees engaged without an ESOP? I guess I'll find out.
THE FIRST ANSWER
Greg A. Chung-Yan
Associate professor, industrial/organizational psychology, University of Windsor
The idea of incentivizing employees' performance by giving them a personal stake in the company has merit. But it presupposes that employees can make a direct connection between their performance and the performance of the company. This is a flawed assumption for two reasons:
1) Employee performance – although essential to the organization's functioning – is only indirectly linked to the organization's market value. Market value is also dependent on how the company is managed, market forces, and other factors outside of the employee's control. Is it any wonder that employees don't necessarily link their efforts to the economic health of the company?
2) Such a plan relies on employees' understanding of finances and their willingness to oversee an investment portfolio. Canadians in general are not sufficiently educated in personal financial matters. It is why so many people are not set up well for retirement. Many likely see the whole thing as a hassle and the quick money they get by selling their stocks probably meets their short-term financial needs better. Long range financial planning, requiring the delay of gratification, is unfortunately not a strength of many people.
If companies want such ventures to succeed, they need to show employees how such a plan is best in the long run. Companies should also explicitly show how employee efforts lead a company to achieve its business goals. The fact is, employees want to be engaged at work, but often, due to the poor incentive and feedback structure, it's not always clear that their contributions are meaningful or valued.
THE SECOND ANSWER
Human resources executive, Atlanta
How do you engage employees without an employee-share-ownership program? There are a lot of things a company can do. The choices depend on the type of business, the culture and the people. However, following a few simple principles can help begin building engagement at a low cost.
Educate employees on the vision and goals of the company and help them understand their role and how they contribute. Who doesn't want to be a part of something bigger than themselves?
Provide flexible work programs and policies so people can live their lives fully and bring their "authentic selves" to work. Employees are looking for flexibility to enjoy work and play and to find their own balance. Have conversations with employees so they know what they do well and how they can improve.
Encourage employees to provide ideas and solve problems. Then recognize them for their efforts.
Yes, at some point, you'll find out if employees get engaged without an ESOP. Why wait? Have you organized a social activity after work? Have you invited employees to join you and volunteer in the community? Have you offered to help a colleague? You can build engagement. You can make a difference.
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