The phrase employee ownership has a slightly revolutionary ring to it, conjuring images of insurrectionist workers shaking off the chains of wage slavery and taking a hammer and sickle to the throats of their bourgeois bosses.
Yet the idea of staff owning shares in their employer - receiving a cut of the profits and, in some cases, voting rights - has a long history in capitalism. Everyone knows that John Lewis is owned by its partners, but there are in fact 300 employee-owned businesses in the UK, with 200,000 people on the payroll.
In some cases staff own the business outright and directly, in others they hold it collectively in trust; in either case, the continued success of the model demonstrates that, if carefully structured and managed, everyone can keep their heads - and make money while doing it.
One place you might not expect it to find this utopian model is in the highly competitive environment of a City trading floor, where stock options are common but rarely scratch the shareholder roster.
Try telling that to Sam Smith, CEO of finnCap - the largest corporate stockbroker on LSE’s AIM market. She gave staff the opportunity to take a cut in the management buy-out of City asset manager JM Finn’s small-cap corporate advisory and broking divisions in 2008.
Smith wanted to grow the firm, but needed equity to do it and also hoped that giving staff the opportunity to take a stake in the business would help to cut through the aggressive and competitive culture of the City. The firm’s 75 staff now own 95 per cent of the business.
She says that while it’s been a challenge to execute, employee ownership has had a significant benefit on the culture of the firm.
"I thought it would be difficult integrating the two divisions. They’d previously had limited contact and the deal closing nature of the work across the firm meant that employees tended to see themselves as individuals in competition with each other.
"But the once staff had a direct stake in the activities and achievements of their peers, the difference was staggering. Instead of actively trying to undercut colleagues - as had been the case before - people were helping each other to secure deals and there was a much bigger sense of teamwork and collaboration.
"Staff are directly involved in decision making. For example the creation of our core values was based on their input, rather than a top-down process, which means they are widely embraced by the whole firm.
"Owning part of the business has now become a key part of our corporate culture and we actively encourage new employees to take a stake in the firm, rather than offer options as part of a benefits package. It’s not about the amount; it’s about simply having a stake. Once people have this, they become far more engaged.
"I’ve made it sound relatively easy, but it shouldn’t be seen as an instant solution. It took us a little while to negotiate the proportion of the company that the staff would own and it is just one facet of our wider values system.
"But, I believe this is better than any other form of incentive scheme when it comes to employee motivation."
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