Abstract
Financial participation is a key human resource management practice, extending democracy at the workplace and, as the success of the organization becomes directly linked to employee rewards, altering the relationship between employees and the organization. In this chapter we discuss the incidence and characteristics of financial participation in eight European Union countries. We address the following questions in the chapter. One, what is the incidence of financial participation schemes in these eight Member States? Two, to what extent are financial participation schemes selective for specific employee groups, such as managers? Three, what was the extent of development of these schemes in the decade 1995–2005? Four, what are the determinants of the use of these schemes? In the chapter we focus on narrow-based schemes targeted at management and broad-based schemes where all employees are eligible to participate. We focus on two types of schemes through which employees and managers participate financially in the performance of their companies: profit sharing and share ownership.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Baisier, L. & Albertijn, M. 1992. Werken in Kringen, Kwaliteit in Overleg. Brussels: Stichting Technologie Vlaanderen.
Blasi, J, 1988. Employee Ownership: Revolution or Ripoff? New York: Harper Collins-Ballinger.
Blasi, J.R., Conte, M. & Kruse, D. 1996. ‘Employee ownership and corporate performance among public corporations’. Industrial and Labor Relations Review, 50(1): 60–79.
Blinder, A. (ed.). 1990. Paying for Productivity—A Look at the Evidence. Washington DC: The Brookings Institute.
Bryson, A. & Freeman, R.B. 2010. ‘How does shared capitalism affect economic performance in the United Kingdom?’ In D.L. Kruse, R.B. Freeman & J.R. Blasi (eds), Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options. Chicago: University of Chicago Press, 201–24.
Cheadle, A. 1989. ‘Explaining patterns of profit sharing activity’. Industrial Relations, 28(3): 398–400.
Conyon, M.J. & Leech, D. 1994. ‘Top pay, company performance and corporate governance’. Oxford Bulletin of Economics and Statistics, 56(3): 229–47.
Eisenhardt, K.M., 1989. ‘Agency theory: An assessment and review’. Academy of Management Review, 14(1): 57–74.
Fakhfakh, F. & Pérotin, V. 2000. ‘The effects of profit-sharing schemes on enterprise performance in France’. Economic Analysis, 3(2): 93–111.
Festing, M., Groening, Y. Kabst, R. & Weber, W. 1999. ‘Financial participation in Europe–determinants and outcomes’. Economic and Industrial Democracy, 20(2): 295–329.
FitzRoy, F.R. & Kraft, K. 1987. ‘Cooperation, productivity and profit sharing’. The Quarterly Journal of Economics, 102: 23–35.
Gospel, H. & Pendleton, A. 2004. Corporate Governance and Labour Management. Oxford: Oxford University Press.
Gregg, P. & Machin, S. 1988. ‘Unions and the incidence of performance linked pay schemes in Britain’. International Journal of Industrial Organisation, 6(1): 91–109.
Hall, B.J. 1998. The Pay to Performance Incentives of Executive Stock Options. NBER Working Paper Series, 6674.
Heywood, J., Hubler, O. & Jirjahn, U. 1997. ‘Use of variable payment schemes: Evidence from Germany’. Kyklos, 51(2): 237–58.
Incomes Data Services. 2001. Pay and Conditions in France 2001. London: IDS.
IPSE. 1997. Le partage de profit en Europe: Institutions et effets comparés. Paris: Cahier Travail et Emploi.
Jensen, M. & Meckling, W. 1976. ‘Theory of the firm: Managerial behavior, agency costs and ownership structure’. Journal of Financial Economics, 3: 305–60.
Jones, D.C. Kalmi, P. & Mäkinen, M. 2006. ‘The determinants of stock options: Evidence from Finland’. Industrial Relations: A Journal of Economy and Society, 45(3): 437–68.
Kaarsemaker, E. & Poutsma, E. 2006. ‘The fit of employee ownership with other human resource management practices: Theoretical and empirical suggestions regarding the existence of an ownership high-performance work system, or Theory O’. Economic and Industrial Democracy, 27(2): 669–85.
Kato, T. & Morishima, M. 2002. ‘The productivity effects of participatory employment practices: Evidence from new Japanese panel data’. Industrial Relations, 41: 487–520.
Kraft, K. & Ugarkovic´, M. 2006. ‘Profit sharing and the financial performance of firms: Evidence from Germany’. Economic Letters, 92: 333–8.
Kruse, D. 1993. Profit Sharing: Does it Make a Difference? Kalamazoo. MI: Upjohn Institute.
Kruse, D. 1996. ‘Why do firms adopt profit sharing and employee ownership plans?’ British Journal of Industrial Relations, 34: 515–38.
Kruse, D.L., Freeman, R.B. & Blasi, J.R. (eds), 2010. Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-Based Stock Options. Chicago: University of Chicago Press.
Lowitsch, J., Hashi, I. & Woodward, 2009. The PEPPER IV Report: Benchmarking of Employee Participation in Profits and Enterprise Results in the Member and Candidate Countries of the European Union. Institute for Eastern European Studies, Free University of Berlin, Berlin.
Mabile, S. 1998. ‘Intéressement et salaries: Complementarite or substitution?’ Economie et statistique, 67 (316–17): 45–61.
Murphy, K.J. 1999. ‘Executive compensation’. In O. Ashenfelter & D. Card (eds), Handbook of Labor Economics. Amsterdam: North-Holland, Vol. 3, 2485–563.
Pendleton, A. 1997. ‘Characteristics of workplaces with financial participation: Evidence from the WIRS’. Industrial Relations Journal, 28: 103–19.
Pendleton, A. & Perotin, V. 2001. Profit Sharing in Europe: The Characteristics and Impact of Profit Sharing in France, Germany, Italy and the United Kingdom. Cheltenham: Edward Elgar.
Pendleton, A. & Poutsma, E. 2004. Financial Participation: The Role of Governments and Social Partners. Luxembourg: Office for the Official Publications of the European Communities.
Pendleton, A. & Poutsma, E. 2012. ‘Financial participation’. In C. Brewster & W. Mayrhofer (eds), Handbook of Research in Comparative Human Resource Management. Cheltenham: Edward Elgar.
Pendleton, A. & Robinson, A. 2010. ‘Employee stock ownership, involvement, and productivity: An interaction-based approach’. Industrial Labor Relations Review, 64(1): article 1.
Pendleton, A. & Robinson, A. 2011. ‘Employee share ownership and human capital development: Complementarity in theory and practice’. Economic and Industrial Democracy, 32(3): 439–57.
Pendleton, A.D., Poutsma, E. & Brewster, C. 2003. ‘The incidence and determinants of employee share ownership and profit sharing in Europe’. In T. Kato & J. Pliskin (eds), The Determinants of the Incidence and Effects of Participatory Organisations. Advances of the Economic Analysis of Participatory and Labor-Managed Firms, Vol. 7. Oxford: Elsevier Science.
Pérotin, V. & Robinson, A. 2003. Employee Participation in Profit and Ownership: A Review of the Issues and Evidence. Luxembourg: European Parliament.
Poole, M. 1989. The Origins of Economic Democracy. London: Routledge.
Poole, M. & Whitfield, K. 1994. ‘Theories and evidence on the growth and distribution of profit sharing and employee shareholding schemes’. Human Systems Management, 13(3): 209–20.
Poutsma, E. 2001. Recent Trends in Employee Financial Participation in the European Union. Luxembourg: Office for the Official Publications of the European Communities.
Poutsma, E. & Huijgen, F. 1999. ‘European diversity in the use of participation schemes’. Economic and Industrial Democracy, 20(2): 197–224.
Poutsma, F., Hendrickx, J.A.M. & Huijgen, F. 2003. ‘Employee participation in Europe: In search of the participative workplace’. Economic and Industrial Democracy, 24(1): 45–76.
Poutsma, E, Ligthart, P.E.M. & Schoutete, R. 2005. ‘Employee share schemes in Europe: A case of Anglo-Saxonisation’. Management Revue, 16,(1): 99–122.
Robinson, A. & Wilson, N. 2006. ‘Employee financial participation and productivity: An empirical reappraisal’. British Journal of Industrial Relations, 44(1): 31–50.
Sweins, C. & Jussila, I. 2010. ‘Employee knowledge and the effects of a deferred profit-sharing system: A longitudinal case study of personnel funds in Finland’. Thunderbird International Business Review, 52(3): 232–47.
Tihanyi, L., Hoskisson, R.E., Johnson, R.A. & Wan, W. 2009. ‘Technological competence and international diversification: The role of managerial incentives’. Management International Review, 49: 409–31.
Uvalic, M. 1991. ‘Pepper Report: Promotion of employee participation in profits and enterprise results’. In Social Europe, Supplement 3/91, Commission of the European Communities.
Vaughan-Whitehead, D. 1995. Workers’ Financial Participation: East–West Experiences. ILO Labour Management Series No. 80. Geneva: ILO.
Wilson, N. & Peel, M.J. 1991. ‘The impact on absenteeism and quits of profit-sharing and other forms of employee participation’. Industrial and Labor Relations Review, 44(3): 454–68.
Editor information
Editors and Affiliations
Copyright information
© 2013 Erik Poutsma, Paul Ligthart, Andrew Pendleton and Chris Brewster
About this chapter
Cite this chapter
Poutsma, E., Ligthart, P., Pendleton, A., Brewster, C. (2013). The Development of Employee Financial Participation in Europe. In: Parry, E., Stavrou, E., Lazarova, M. (eds) Global Trends in Human Resource Management. Palgrave Macmillan, London. https://doi.org/10.1057/9781137304438_10
Download citation
DOI: https://doi.org/10.1057/9781137304438_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-34661-5
Online ISBN: 978-1-137-30443-8
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)