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Employee Ownership and Employee Participation, Involvement and Engagement
The Australian Employee Ownership Association (AEOA) has been established to bring about growth and acceptance of the concepts of employee ownership and employee participation in the Australian workplace.
The AEOA believes that:
1. A performance oriented workplace culture is the key to business success and this requires the following elements:
(i) Formal staff skills training and education
(ii) Information sharing and employee involvement and participation
(iii) Decentralised decision-making, teamwork and collaboration
(iv) Performance-based rewards based on working smarter
(v) Long-term employment security
2. Employee involvement and participation should be supported where it can be combined with the development of employee ownership plans. This is because research has indicated that broad-based employee share ownership combined with employee participation and involvement in the workplace is conducive to increased productivity, loyalty and employee satisfaction.
3. Employee ownership and participation should be voluntary in nature, discrimination free, accessible to all employees and be limited in risk to employees.
4. Employee ownership and participation is not a “one off exercise” - it should become a permanent feature of company relations, with governance and procedural practices being formally established and clearly communicated, in combination with formal reward and recognition systems and the sharing of gains made through employee involvement efforts.
5. Intrinsic to most employee involvement processes is training in team effectiveness, communication, and problem solving.
In line with our objectives, the AEOA seeks to work actively with others to expand employee ownership and employee participation in enterprises and workplaces. The following is our statement on this matter:
Employee Ownership + Voice = Business Success
1. Research shows that where company leadership is committed to creating a workplace environment where people share more equitably in rewards, have a meaningful say in their work, are provided with detailed information on the company and are treated with dignity and respect, this generates superior performance for that company.
2. All the research evidence available shows that employee participation - especially when combined with employee ownership - contributes to increasing prosperity, productivity and employee satisfaction in those enterprises willing to take this step.
3. As well, companies with strong ownership and participation cultures have an enhanced sense of community which produces lower turnover rates and stronger feelings of engagement and purpose amongst employees, whilst also supporting better work/life balances.
4. It is clear that creating and maintaining an "ownership and participation" culture requires formal employee involvement in work-level issues. It is known that employees will relate to corporate purpose better if they have a role in creating it and recreating it.
5. It is also clear that effective employee involvement and participation strategies need to be driven as much as possible by empirical data on what works in your organisation, rather than on theory, assumptions, and doing what others do. Communication and education are essential elements of an effective participation plan.
6. In practical terms, the research indicates that an applied approach to employee ownership and employee participation requires a number of key activities:
• Education on employee ownership and participation basics
Companies need to provide adequate opportunities for employees to understand how they will benefit through employee ownership and participation.
• Advanced Communications Systems
Companies need to establish strong and predictable systems for information sharing, as well as training and education to support all employees in their ability to use that information.
• Employee Voice
Companies with strong ownership and participation cultures generally have extensive structures to involve a substantial number of employees in decision making, and they extend a substantial degree of employee voice to both workplace issues and strategic, company-wide issues.
• Linkage between Rights and Responsibilities
Most people would agree that employee-owners have a significant number of organizational “rights” relative to traditional employees. A mature understanding of employee ownership insists however that for each of these new rights, employee owners accept a linked and often greater responsibility as well.
7. To achieve genuine employee participation and involvement therefore, it needs to be structured, not simply allowed. To make participation effective, employee involvement guidelines should:
a) Ensure all actions and decisions are consistent with corporate mission and values.
b) Measure decisions against critical numbers to indicate what needs to done in future to contribute to company performance.
c) Highlight core values such as working cooperatively with colleagues, sharing ideas and information whenever relevant and being persuaded by others when they have better ideas.
8. Employee ownership and participation should be provided with company support and resources as a "21st century" business model to facilitate workplace harmony and employee satisfaction.
The AEOA supports diversity in opinion and encourages the development of any workplace participation, industrial democracy or continuous improvement structures and processes that serve the purpose of increasing employee ownership and involvement.
Employee participation is a means to an end, not an end in itself. There are many paths that employee participation can take. For an excellent report studying the practices of 25 employee ownership companies in the areas of employee engagement, governance and voice, rewards and ethics and corporate social responsibility, see "Making Employee Ownership Work: A Benchmark Guide" (Employee Ownership Association, UK, February, 2009). For investigating the barriers to employee participation, see the NCEO article "Why Don't People Participate More".
For further detailed information on making employee participation work - including checklists and what benefits, advantages and disadvantages there are in implementing various participation processes - see the following pages at:
For examples of ESOP companies with extensive employee involvement programs, see our "Private Company ESOPs” page. For the benefits of ESOP programs and policies, see our “AEOA Policy” page. The “ESOP Guidelines” page provides information on what shareholders in public companies might be looking for in terms of governance and disclosure. For advice on implementing employee share plans, see our "ESOP Consultants" page. For what the AEOA has in train for extending employee ownership and participation in future, see our "Future Directions" page.
The AEOA would like to hear more from companies where active employee involvement and participation has contributed to the economic and social success of the company.
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