Trends in Organizational Behavior Vol 8: Employee versus Owner Issues in Organizations

Citation

Morrell, K.M. (2003), "Trends in Organizational Behavior Vol 8: Employee versus Owner Issues in Organizations", Personnel Review, Vol. 32 No. 4, pp. 526-530. https://doi.org/10.1108/00483480310477579

This title is somewhat misleading, because this volume in the series on trends in organisational behaviour does not really look at “employee versus owner issues”. Instead it addresses a somewhat narrower question – something like, “What are the organisational consequences of employee involvement?” Indeed the seven chapters here are even more focused, since they only consider financial involvement and ownership. As the back cover suggests, this volume does explore, “whether employees should be stakeholders in their businesses”. However, it does not quite get as far as, “the relationship between employees and owners in general” (also on the back cover). Nonetheless, as one would expect from such an illustrious editorial pairing as Cooper and Rousseau, each chapter would repay careful reading and certainly be useful for students, academics and practitioners with an interest in reward systems and financial ownership. I shall sketch each chapter in turn, before trying to say what I think this book's good points are, and what it is lacking.

“Employee equity: employee versus owner issues in organizational behavior”, Joseph R. Blasi and Douglas L. Kruse

This introductory chapter offers an overview of various forms of stock and share plans, together with a discussion of empirical evidence largely drawn from studies in the USA. The highlight of this chapter was its concluding research agenda, which threw up some interesting questions in this field (p. 13): for example, “To what extent does the success of employee equity programs depend on the role that they play in a comprehensive programme of strategic human resource management” and “are economic [or corporate culture] considerations mainly driving the employee Equity phenomenon”. An undeveloped, but nicely phrased point was the need for “econometric shenanigans” to enable meta‐analytic studies of employee ownership (p. 8). It would have been interesting to have had more detail on how meta‐analysis might be carried out in studying the link between ownership and firm performance since this issue involves studying conflicting empirical data, and is causally complex.

“When employers share ownership with workers”, Zipi Shperling and Denise M. Rousseau

This chapter followed nicely on from Blasi and Kruse. It offered a well‐framed discussion of various forms of capital, as well as a useful analysis of different motivations with organisations to share ownership (to recruit valued workers, to retain them, to motivate them to contribute both individually and collectively, to build community and enhance identification with the firm, to respond to radical change in the economic context). This chapter also had some interesting cases, which could spice up a lecture on this topic. One thing I found problematic was the presentation of participative approaches to management (such as codetermination in Germany) as barriers to worker‐ownership arrangements. These are portrayed, as having, “reified the roles of owner and worker, making it culturally difficult for workers to think of themselves as owners” (p. 37). What this overlooks is that such arrangements may protect peripheral workers, whom organisations may not be as desperate to recruit and retain. This criticism could be levelled at other chapters which occasionally seem to focus exclusively on high‐fliers.

“The psychological consequences of employee ownership: on the role of risk, reward, identity and personality”, Paul R. Sparrow

This chapter does not really talk at length about the psychological consequences of employee ownership, although there is an interesting discussion of Cappelli's (1999) imaging inertia theory as an alternative to a rational cost benefit model for understanding decisions about ownership. In the space of just ten pages, Sparrow raises a quite astonishing number of questions which could prompt further investigation. The main contribution of this chapter is in raising two principles which should influence analysis of wider employee ownership. First, it is necessary to consider that ownership comes in many different forms and in different degrees, and it is likely that some forms of ownership will not influence behaviour. Second, it is important to recognise that employee ownership is not always beneficial, given that it involves risk.

“When employees become owners: can employee loyalty be bought?”, Marc Orlitzky and Sara L. Rynes

This title perhaps begs one or two ethical questions, and has a definite managerialist ring to it that is in keeping with much of the book. Even so, Orlitzky and Rynes do provide a good summary of the literature on risk and agency theory as it relates to the potential disadvantages (for employees) of stock ownership (pp. 61‐2). The remainder of their chapter considers three models relating to: the psychological dimensions of employment ownership (Pierce et al., 1991); contextual factors influencing the link between ownership and employee loyalty (new to this chapter, summarising the literature and empirical evidence); the effects of employee ownership on performance (also new to this chapter, a decision tree/path model relating cognitions to motivation and performance). These models are likely to provide an excellent basis for theorising, or developing empirical studies. They may also be useful in thinking about implementing ownership initiatives.

“Achieving a sense of ownership among employees: a critical look at the role of reward systems”, Annette Cox

This title again begs ethical questions, since creating a sense of something is potentially independent of any substantive quality. The gap between sense and substance is intentionally created and exploited by many. Setting aside the ethical and power considerations that a focus on “sense” throws up, there are some methodological issues that would perhaps have been worth exploring to supplement Cox's useful guidance for future research. Since perceived ownership is a recurrent theme in this literature, it would have been helpful to have heard the case for more direct measures. Having started with the goal of achieving a sense of ownership, Cox's heartening (for the democratically minded) conclusions almost read like an apology, “… it is increasingly commonly accepted that in order to persuade employees to behave like owners, financial participation schemes alone are insufficient, but must be accompanied by mechanisms through which to influence decision‐making power” (p. 90). Cox offers some useful advice for organisations trying to foster “feelings of employee ownership” (pp. 90‐2) and this chapter, in keeping with the rest of the book offers a helpful overview of the literature, which will be of particular use to those operating in a UK context.

“Bringing open‐book management into the academic line of sight: sharing the firm's financial information with workers”, Claudia J. Ferante and Denise M. Rousseau

This chapter was the most interesting one for me, and also came closest to discussing the “relationship between employees and owners in general”. It continued the debate on perceived ownership, but incorporated discussion of appraisal, high involvement, change, employee development and empowerment. This range of themes would have been bewildering, or incoherent were it not for the organised focus on open book management. Ferante and Rousseau offer a well‐rounded analysis of a potentially exciting field for future research. The chapter is well structured, and their model on the dissemination of financial information usefully summarises concepts from organisational behaviour (power, influence, performance, motivation), themes on distribution of information (understandable, timely etc) tips for implementation and key performance metrics. I would say this is essential reading for those interested in disseminating financial information within organisations, or researching financial involvement, or empowerment.

“Employee stock transfers in SMEs: understanding an infrequent event”, Jerome A. Katz and Pamela M. Williams

This is a lively chapter with which to finish the book. It is also the first paper I ha;ve read whose list of references begins with a Web link to Christina Aguilera's song lyrics. (Just for the reader, it is reproduced at the top of my brief list of references, see Aguilera, 1999.) Following this link offers her take on transferring ownership, “‘ [I]f you love something, let it go; if it comes back its yours; that's how you know. It's for keeps, oh yeah, it is for sure and you're ready and willing to give me more.” (p. 119 [from What A Girl Wants (Aguilera, 1999)]). Katz and Williams have a bold, engaging style of writing in part evinced by their courageous referencing. In addition to other lively snippets they offer a comprehensive, scholarly review of the empirical evidence on stock transfer within the USA, concluding with a thought‐provoking model of the relationship between wealth and independence orientations in small business owners. They portray these rival orientations as “gravitational partners”. This model is put to good use to illustrate the relationship between individual motivations for stock transfer and structural constraints or incentives.

Overview

This is a really useful book, and it does offer “A quick, insightful and authoritative window on the latest in OB” (back cover). Each chapter offers a well crafted analysis, covering the relevant literature, and outlines and skilfully synthesises relevant empirical research, then proposing a well formulated list of research questions. My personal preference would be to see volumes such as these: that address one topic in‐depth, and are intended to help students, academics and practitioners; include one or two chapters that do not fit this format. These could report on or discuss the potential use of different modes of inquiry (case study, discursive analysis, multi‐method), or present different and overtly political stances (critical theorist, Marxist, free marketeer). This would potentially require a lot of work from an editorial team, in encouraging a diverse range of authors, then introducing and selecting such a mix, but to rub up against and engage opposing viewpoints is essential in developing one's own ideas. Presenting a united front for the study of financial ownership (large‐scale surveys, economic data), implies one way of carrying out such research. This has its advantages in terms of growing a field of inquiry (Pfeffer, 1993). I am not confident that this uniform style encourages sufficiently rounded, complex or in‐depth understanding of this, or any organisational phenomenon (Van Maanen, 1995). Relying on any one way of understanding limits our capability to make sense of these issues in day‐to‐day organisational life, which is beset with contradiction, contest and rhetoric.