ESOP: How to Foster a Sense of Ownership Among Employees

A common complaint from management is that employees in ESOP don't act like owners. They gripe and complain, they disown responsibility, they drag their heels and the like, much llike they acted in pre-ESOP days. Many solutions have been offered, usually aimed at specific programs, e.g., learning to understand financials, training employees to work together in teams, learning how to decide what is within one's area of decision making, aand the like. Each of these solutions are worthwhile endeavors, but they still appear to miss the mark.

What is missing amoung employees is a basic sense of identification with the firm, a primary sense of ownership, neither of which magically appears upon the establishment of an ESOP. This sense of ownership has to develop over time. And, one of the most significant and potent sources of identification and of ownership is participation in the strategic planning process , in contributing to deciding on the firm's direction. Short of this, employees remain "employees" and do not become "owners".

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