Can Employee Ownership Strengthen Business Performance?

Studies that look at ownership structure—without considering workplace practices—generally find that employee ownership alone has a modest effect, or an unclear effect, on performance outcomes.

A consistent finding over several decades is that employee ownership is most strongly associated with positive outcomes when it is combined with high-participation or high-trust work environments. When employees have meaningful voice, participate in teams, and have access to information and supportive management, employee ownership is more likely to translate into greater effort, innovation, and collaboration.

Recent analysis using high-quality data finds that in the manufacturing sector, ESOPs are linked to a meaningful increase in productivity.  Moreover, how much ownership workers have matters: a $100,000 increase in ESOP assets per employee is associated with more than a 25% productivity gain. Overall, the findings suggest that broad-based employee ownership—particularly when ownership stakes are substantial—has a robust and meaningful positive impact on productivity. Find the new analysis here.