The cover story of this issue concentrates on the attempt to increase employees’ sense of involvement – and therefore their productivity – by making arrangements through Esops or other mechanisms to provide them with a stake in the companies for which they work.
The stake is real enough, since it generally takes the form of a shareholding. But it’s not normally something employees are given on a plate. Rather they acquire it, sometimes in exchange for reduced numbers, income or benefits, as in the case of United Airlines; sometimes for cash, albeit at a reduced stock price following the issue of options to buy shares at a discount or as part of a flotation or privatisation exercise with special arrangments to encourage take-up by employees.
In such cases, companies generally further facilitate staff share buying by making it possible for them to put aside small weekly or monthly instalments and to purchase their stock without the bother of having to instruct – or pay – stockbrokers.
Because of these advantageous buying terms, and because of a traditional hostility on the part of much of the investment community to anything that smacks of ‘giving into labour’, institutions often cry foul when companies introduce special schemes to encourage employee share ownership. They seem to regard them as unfair, or likely to result in the company being run in the interests of the staff, which they feel must – almost by definition – run counter to their own interests.
But the evidence seems to suggest the opposite. To be sure, United Airlines was on its knees before the employees agreed to swap benefits for shares. And since then, far from expecting outside investors to support an employee-indulgent management, the worker-shareholders have been at pains to ensure that no move is made which might compromise their investment. That’s just one reason why the United stock has more than doubled in the last year and a half since the Esop was put in place.
Perhaps if the bearers of capital could only give up their prejudices, they would find those offering up their labour to be more willing than they realise to fight on the same side. And that the cake would be bigger, more tastily iced, and likely to offer up additional crumbs for all involved.
