Why do Employees Participate in Employee Share Plans? A Conceptual Framework

26 Pages Posted: 14 Apr 2008

See all articles by Michelle Brown

Michelle Brown

University of Melbourne - Department of Management

Ingrid Landau

Monash University; Monash University

Richard Mitchell

Monash University - Department of Business Law & Taxation

Ann O'Connell

University of Melbourne - Law School

Ian Ramsay

Melbourne Law School - University of Melbourne

Abstract

Non-executive employees are increasingly being offered the opportunity to participate in employee share ownership plans. In many cases, companies provide their employees with shares or options as a 'gift', either on a one-off or regular basis. Many plans, however, are structured so as to require employees to contribute to the value of the securities. In the cases of contributory plans, the reasons why employees choose to participate are not always clear. This paper reviews existing studies and presents a conceptual framework to explain why employees participate in employee share plans. It examines the relationship between the decision to participate in a plan and a number of demographic and workplace-specific variables. It also identifies key factors that may moderate this relationship, such as the extent of company communication on the plan and company performance. This conceptual framework has been developed on the basis of a synthesis of previous studies and twelve semi-structured interviews conducted with human resource managers and trade union representatives within publicly listed companies.

Suggested Citation

Brown, Michelle and Landau, Ingrid and Mitchell, Richard James and O'Connell, Ann and Ramsay, Ian, Why do Employees Participate in Employee Share Plans? A Conceptual Framework. U of Melbourne Legal Studies Research Paper No. 336. Available at SSRN: https://ssrn.com/abstract=1119123 or http://dx.doi.org/10.2139/ssrn.1119123

Michelle Brown

University of Melbourne - Department of Management ( email )

200 Leicester Street
Melbourne, Victoria 3053
Australia
+61 3 9344 7872 (Phone)
+61 3 9349 4293 (Fax)

Ingrid Landau

Monash University

Wellington Road
Victoria, Roodepoort 3145
Australia

Monash University ( email )

Caulfield Campus
900 Dandenong Road Caulfield East
Melbourne, Australia, Victoria 3145
Australia

Richard James Mitchell

Monash University - Department of Business Law & Taxation ( email )

Caulfield Campus
Sir John Monash Drive
Caulfield East, Victoria 3084
Australia

Ann O'Connell

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

Ian Ramsay (Contact Author)

Melbourne Law School - University of Melbourne ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia
+61 3 8344 5332 (Phone)

HOME PAGE: http://law.unimelb.edu.au/about/staff/ian-ramsay

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