Can employee share‐ownership improve employee attitudes and behaviour?

Purpose – The purpose of this article is to examine the outcomes of a substantial broad‐based employee share‐ownership scheme for employee attitudes and behaviour in a privatised firm. Design/methodology/approach – Results are based on a survey of 711 employees in Eircom, an Irish telecommunications firm, which is 35 percent employee‐owned. Findings – The ESOP has created sizable financial returns and has had extensive influence in firm governance at the strategic level. However, findings show only a limited impact on employee attitudes and behaviour. This is attributed to a failure in creating a sense of employee participation and line of sight between employee performance and reward. Practical implications – The aim of employee share‐ownership often includes aligning employee objectives with those of other shareholders, and thus improving labour performance. The findings in this study highlight a need to provide employees with a sense of ownership and control. Findings also question the assumption that where employees have a substantial shareholding, they will focus on securing the long‐term prospects of the firm. Originality/value – Little research has examined the impact of a large employee shareholding on attitudes and behaviour within a public‐quoted firm. The substantial and unparalleled size of the Eircom ESOP presented a unique opportunity to conduct such a study.