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4 Min Read

What Is Employee Ownership?


If you’ve ever shopped at Publix, you know what it’s like to get the royal treatment while getting groceries. Employees insist on escorting customers to their cars to unload purchases, walking them through the store when they’re having trouble finding a product, and will even offer umbrellas when it’s raining. You might say it’s a testament to the motivational power of employee empowerment: The company has long been on Fortune’s 100 Best Companies to Work For and is famous for climbing revenues in the midst of considerable competition from Walmart.

It’s also the largest employee-owned company in the country.

Employee ownership, it seems, goes hand-in-hand with high performance.

What Is Employee Ownership?

According to the National Center for Employee Ownership (NCEO), “employee ownership” refers to the ownership of a company, either in part or in whole, by some or all of its employees—generally through a formal employee stock ownership plan (ESOP) offered by the employer.

A growing body of research suggests that “employee ownership” has also become synonymous with another phrase of increasing importance to U.S. businesses:

Employee engagement.

In fact, several studies have found that employee-owned companies perform better and grow faster than their non-employee-owned counterparts. For example: In one 10-year study, ESOP companies experienced sales growth at a rate that was 5.4% faster compared with non-ESOP counterparts. Overall, 73% of the companies evaluated significantly improved performance after setting up their employee stock ownership plans.

“ESOP companies have grown much faster than they would have without their ownership plans,” the study’s authors wrote. “Ownership provides a strong incentive for employees to work productively, and opportunities for participation enhance productivity by providing channels for workers’ ideas and talents.”

In other words…

Because ESOP employees have a true stake in the success of the company, they’re more inclined to make day-to-day decisions that drive the business forward. They tend to embrace the very definition of employee engagement:

An employee’s intellectual and emotional connection with an employer, demonstrated by motivation and commitment to positively impacting the company vision and goals.


Can Employee Ownership Be Replicated?

You might not be offering employee stock ownership options, but that doesn’t mean you can’t benefit from the examples set by employee-owned companies and get your staff to care about the business as much as owners do.

It all starts with measuring your engagement to understand the unique needs of your workforce. When you build an engagement strategy around actual feedback, you’re much more likely to give employees a greater sense of ownership in the mission and vision of your business.

So…what does this look like in practice? Here are four concrete ways to apply lessons from employee-owned companies when building an engagement strategy:

1. Give ample opportunity for candid feedback

Employee-owned companies are so successful because those that make the decisions are also doing the work. They have a voice and stake in the company. You can do this too by gathering regular feedback—not just from one-off polls about how happy they are, but psychometrically valid engagement surveys that measure true engagement.

2. Make employees integral to your engagement strategy

If you want to get employees to care about your business as much as owners, you’ll need to provide a venue for ongoing participation in big decisions. Doing this not only requires gathering objective data to measure your current engagement levels, but taking action on your results to form a strategy for ongoing improvement.

3. Communicate changes as they’re made

Any time a company collects feedback, it’s imperative to inform employees of the changes you’ve made throughout the organization so they 1) know you care about improving their employee engagement and 2) are more likely to give feedback again. Check out this post-survey action plan to see what to do with your data once you have it.

4. Remain transparent at all times

An informed employee is much more likely to feel invested in important company goals, which is why successful employee engagement ideas always involve regular doses of corporate communication.