MKB (HBS-Project)

Effects and Mechanisms of Employee Ownership (HBS Project)

Employee ownership (EO) connects key issues at the corporate level, such as employee compensation, pension schemes, and co-determination. It is also attributed with effects on motivation and employee retention. These aspects make EO a highly relevant research topic both in Germany and internationally. A look at the research literature, however, reveals surprising inconsistencies (e.g., Kaarsemaker 2006; Kruse et al. 2008, Steger et al. 2019): While numerous studies document positive effects of material employee participation – such as increased job satisfaction, stronger employee retention, greater identification, and motivation – clear causal relationships remain unproven. Additionally, the influence of various potential moderators on the relationship between EO and the studied variables has not been conclusively clarified.

This project relies on a case study approach with in-depth analyses of five German companies and combines qualitative and quantitative methods to investigate the effects of EO on various levels and stakeholders within the companies. These companies represent different types (large corporations, SMEs, startups), legal forms, and industries. The analysis includes a detailed examination of existing EO programs, interviews with key stakeholders, quantitative impact measurements using questionnaires, and the analysis of company data related to EO.

The central research questions are as follows:

• What are the effects (positive/negative) of EO (or specific aspects of it) on corporate outcomes, particularly in terms of financial status, productivity, corporate growth, and investment behavior?
• What are the effects (positive/negative) of EO (or specific aspects of it) on various workplace actors (both individual and group level), particularly in terms of job satisfaction, employee and skilled labor retention, absenteeism, employee motivation, and personal wealth accumulation?
• What are the effects (positive/negative) of EO (or specific aspects of it) on co-determination at both workplace and corporate levels, particularly in terms of employee participation in decision-making processes, the position of the works council, union density, and the power of trade unions?

The results of the project are expected to provide valuable insights for social partners, political actors at the regional and federal levels, and the academic community. The aim is to create a well-founded basis for the discussion on EO, support decision-making processes, and better leverage the potential of EO for companies, employees, and society.