The purpose of this paper is to examine the relationship between employee share ownership (ESO) and employer-provided training. To be more specific, as both ESO and involvement…
Abstract
Purpose
The purpose of this paper is to examine the relationship between employee share ownership (ESO) and employer-provided training. To be more specific, as both ESO and involvement practices can contribute to developing human capital, the paper addresses the question of whether they are substitutes or complements in the relationship with training.
Design/methodology/approach
The theoretical hypotheses are tested using the French nationally representative establishment-level survey, REPONSE, which is similar to the British WERS. The sample consists of 1,523 establishments.
Findings
The results are consistent with studies conducted elsewhere (e.g. in the UK) and provide novel findings, thereby suggesting a complementarity between ESO and involvement practices with bundles of practices becoming increasingly more complex as training expenditures increase.
Research limitations/implications
To provide further insights, future research that uses more precise information regarding ESO plans is needed.
Practical implications
Results can provide HR managers with valuable information regarding the organisational characteristics necessary to ensure a fertile ground for their training expenses.
Originality/value
The paper reflects a growing awareness that human capital development and share ownership plans may be related and that this relationship might be a more compelling explanation for share ownership plans than the standard agency theory. The contribution of ESO plans to the development of employee competencies may be at least as important as their possible effects on employee motivation and effort.
Details
Keywords
With specific big-data mining worked on 61,522 firm announcements, we discovered a diverse Employee Share Ownership Plan (ESOP) model in China, called “Core-Staff-Based ESOPs.”…
Abstract
Purpose
With specific big-data mining worked on 61,522 firm announcements, we discovered a diverse Employee Share Ownership Plan (ESOP) model in China, called “Core-Staff-Based ESOPs.” Distinct from standard broad-based or executive-based ESOPs, these specific targeted-broad-based ESOPs require the qualification for participants, involving the participation of senior executives, directors at the middle level and any other employees that make particular contributions to firms. We take on the challenge to analyze ESOP mechanism, firm characteristics and performance in the view of organizational ecology and resource-based choice-making, and explore which factors have influenced the ESOP development in China.
Design/methodology/approach
We utilize a combination of approaches including qualitative and quantitative methods, and construct the main database of 117,767 firm-quarter data.
Findings
Firstly, based upon our institutional research, we find no coercive mechanisms that force all the Chinese listed firms to implement ESOPs since 2005. Secondly, our binary logistic regressions identify ESOP firms’ specific properties significantly distinct from non-ESOP firms, and draw profiles for these ESOP firms. Thirdly, our panel regression test results sustain the rational of ESOP mechanism, demonstrating that ESOPs enable Chinese firms to improve performance both in profits and their industry positions. Finally, with further quantitative tests, we find out this ESOP design’s limitations and the heterogenous effects due to China’s environments.
Originality/value
The discovery of Core-staff-based ESOPs contributes a diversity to the standard framework of ESOPs, enhances our understanding of China’s ESOP development, and provides new evidence for ESOP performance.