In order to provide insight into employees’ understanding of and participation in share plans, the London School of Economics (LSE) conducted a survey of Computershare employees in nine countries where it operates an employee share ownership plan – known in the US as an employee stock purchase plan (ESPP). The breadth of Computershare’s employee base and the large number of respondents make the results of this survey of interest to any company offering (or considering offering) a share plan.
The purpose of the survey was to investigate:
- employees’ understanding of the share plan
- levels of participation and the depth of employees’ investments in the plan
- the impact of the share plan on employees’ motivation and commitment.
The survey took place from March 28 through April 18, 2014, and included employees in Australia, Canada, Hong Kong, Germany, Ireland, New Zealand, South Africa, the United Kingdom, and the United States. Overall, there were 3,819 responses to the survey, for a 39 per cent response rate. In the US, the response rate was 42 per cent.
Across all survey participants, results showed that employees who are members of a share ownership plan work longer hours, take less absence, have increased motivation to work, are less likely to leave the firm, and are more likely to recommend the company to others as a place to work.
“The research results show that companies can achieve measurable benefits through employee reward and engagement”, stated Kevin Brennan, president, US Plan Managers. “For firms looking to attract or incentivize talented people, this research proves that an effective employee stock purchase plan is an important part of the overall benefit package.”
The LSE Study in Context
Computershare also commissioned Fidan Ana Kurtulus, Associate Professor of Economics, University of Massachusetts Amherst and Wertheim Fellow, Harvard Law School, to provide a comparative analysis of the US results with results from other research in the field.
According to Professor Kurtulus, previous research has shown broad-based (i.e., all levels of the workplace, including both lower level entry positions and upper level management positions) employee ownership programs to have beneficial effects on firm and employee performance outcomes, as well as on increasing workplace cooperation and cohesion, a result that corresponds with the findings from the LSE survey.
Results from the NBER Shared Capitalism Project and the General Social Survey reveal that employee ownership is positively linked to job satisfaction, particularly when implemented alongside democratic workplace practices such as greater employee decision making. The NBER Shared Capitalism Study also found that workers at firms with employee stock ownership programs were more likely to remain at the company, have greater loyalty and pride working for the company, make more suggestions to improve business, and were less likely to shirk on the job. A discussion of these findings is provided in the 2010 book Shared Capitalism at work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options, edited by Douglas Kruse, Richard Freeman and Joseph Blasi.
These results, coupled with those from the LSE survey, make it clear that share plans offer a significant benefit to both the participating members as well as to employers. When developing a benefits package, an employee share plan like an ESPP is an important component to include.