How Employee Ownership helps any company excel.
Employee Ownership is one strategy used by many of the companies on the 2020 Fortune 100 Best Companies to Work For list. I’ve picked out two companies from the Fortune 100 list that are 100% employee-owned to discuss.
39th on the list, Publix Super Markets boasts a high ranking in the already exclusive selection of companies. The information we can gather from the list informs us that 84% of people say it’s a great place to work. We also find out what people love about working for Publix, the top three motivators were coworkers, benefits, and stock. I believe that all three of these motivators can be attributed to the company’s employee ownership. Digging for a bit more information we discover through an article that Publix is actually the largest employee-owned company in America. We also learn a bit more about the stock ownership program.
“Once people have worked at Publix for at least a year, they are given company stock equivalent to 8 to 12 percent of their annual salary-“
– Jen McCaffery, Reader’s Digest
On top of an already good compensation package, every employee can expect stock growth throughout their career, as long the business continues to see success. However, that shouldn’t be a concern as this strategy instills a sense of pride and teamwork unrivaled by traditional business structures.
Continuing on to our next company we find Burns & McDonnell, a global construction, engineering, and architecture firm. The Fortune 100 list tells us that a massive 91% of people say Burns & McDonnell is a great place to work. The top three motivators also mirror those of Publix, benefits, stock, and coworkers.
It’s evident that people working for the firm love the aspect of being an employee-owner. The firm further expands on how every client works with the owner, or at least one of the many owners. I was unable to find the requirements to become an owner, however I did find this quote from the firm’s website.
“Whether you’ve been here one year or 10, you benefit from an ESOP.
Enrollment in our ESOP is automatic and costs nothing. At year-end, our company makes a cash contribution to the ESOP, which is allocated to eligible employee-owners. The cash in your account purchases shares at the current fair market value, assessed annually. Throughout your career with Burns & McDonnell, your account can grow with annual contributions, stock appreciation and dividend payments at no personal cost. It’s a high impact benefit that rewards loyalty and achievement. And the retirement rewards can be substantial. “
How Does This Strategy Affect Management?
Looking at the content in Oregon State Universty courses such as BA 351 ‘Managing Organizations’ or MGMT 453 ‘Human Resources Management’, we learn that managers who give their employees more freedom and intrinsic motivators create a much more productive work environment.
Employee ownership provides a unique intrinsic motivator for all owners. As one person excels, everyone else does too through programs such as stock ownership. However, this motivator then also becomes extrinsic since stock growth can provide quite high financial benefits. It can also level the playing field somewhat between manager and subordinate, as each party wants the other to succeed and will be more likely to provide the tools and skills to help the other.
Overall, it seems whenever someone discovers an employee-owned company they immediately fall in love with the idea. I will be starting my job with an employee-owned construction company this summer and I am ecstatic about the financial freedoms and sense of ownership among all coworkers. To leave off, I’d like to leave this list of employee-owned companies, maybe one of them is a part of your industry!