POUTSMA AND OTHERS: 13 FEATURES OF BEST PRACTICES
The most complete summary of European features of best practices
was presented by Erik Poutsma and others in
a Draft Report on "Practices of financial
participation in Europe - Features of best practices"
in September 2001. Other contributors were:
Eckhard Voss, Peter Wilke, Robert Tchobanian,
Hiro Nohara, Olivier Blacas, Karsten Kruger,
Panu Kalmi, Erna Bruin, Fred Huijgen, Andrew
Pendleton. The Final Report will be published
soon. The following presentation is made by
EFES on basis of the draft report:
WHAT ARE FEATURES OF EFFECTIVE SCHEMES? (based on pages
25 to 29 of the Draft Report)
are the features of effective schemes? What
follows is a draft outline of possible dimensions
that influences the effectiveness of schemes.
We do this by highlighting the following:
objectives that are set including the alignment
main actors and their participation in plan
development and organization and monitoring
relationship with participation in decision
to proceed with the features of best practices
we must state that effective schemes are conditional
and that there is no universal best scheme.
Apart from differences due to country specific
factors there are also company specific factors
that influence the type of scheme. Most schemes
can be tailored to the needs in a specific situation.
This means also that there is a dynamic in schemes
and that it should be allowed to change schemes
in time. The next features of effective schemes
should be treated as domains for discussion.
We defined effective as follows: Effective
schemes are those schemes that meets the objectives
of identification and alignment of interests,
add on employee saving, influence of employees
as a stakeholder.
1. Principles of Alignment of interest
Financial participation is an incentive
and an acknowledgment of the value of employees
for the company. It increases identification
and commitment. Our study made clear that hard
economic performance indictors are not the main
objectives of financial participation. It is
about a sense of belonging and ownership and
not a guaranteed future reward.
For effective schemes we may conclude
that the promotion of these schemes should not
be done by pressing hard economic performance
and hard economic returns but by stressing identification
2. Primary objectives are identification and add on saving
The objectives of economic performance
and economic returns are enhanced through other
practices that is more or less related to performance
related appraisal and pay. In most cases there
is some other measures taken to cover this objective.
In a number of cases stock options are used
in this sense. Actually this can also be used
to develop clear reward in a shorter term. Also
there are companies that reward economic performance
with becoming shareholder or giving shares.
The problem with the use of financial participation
schemes for enhancing economic performance is
that the relationship between individual performance
and the performance of the unit or organization
may not be that tied.
We may state that functional equivalent
practices to enhance economic performance and
economic returns can be developed within the
domain of financial participation. However,
the rewards that accrue from these bare the
risks that they become zero or negative due
to factors not influenced by the performance
of the person.
3. Plan development with employee representatives
In most cases the management or owner
takes the initiative to develop a plan. Of course
this is important to have the thing going anyway.
Effective schemes appear to start develop the
plan in co-operation with employee representatives
and allow also to have a position in the trustee,
fund or board or whatever legal body that administer
Effective schemes are schemes that
is developed together with employee representatives
and allow representatives to have a position
in the board or other legal body that administer
4. Collective schemes with voting rights
In some cases schemes are individual
schemes, that is, they are treated in an individual
relationship between employee and company. Most
cases develop a kind of collective plan in which
there is a collective body that represent the
employees that take part in the scheme. These
collective schemes have a larger commitment
effect due to a sense of solidarity than individual
types of plan.
Effective schemes are voluntary schemes
with a collective body that represents the employee
5. Schemes are co-managed by employee shareholder representatives and other
Another main objective that companies
have is to offer an additional saving to employees,
but at the same time part of flexible remuneration.
Also employees view financial participation
as long term additional savings that may become
a benefit in the end. Certainly by employees
it is not considered as part of wages. Therefore
this raises the possibilities of conflict between
employer and employee. Companies tend to avoid
this potential conflict by carefully treating
the schemes as typical additional and by developing
extensive consultation and co-management of
Effective schemes are schemes that
treat the reward from the schemes as additional,
but risk baring, saving. In order to treat it
that way companies may develop co-management
structures for the organization and monitoring
of the scheme.
6. Schemes allow for a fair distribution and allocation of shares
In most cases there is skew ness in
distribution. In most cases this is related
to income and tenure. However, to a certain
extent this skew ness can be considered is unfair.
Apart from that there are also risks involved
when an individual puts much into one basket.
Effective schemes allow for a fair
skew ness in distribution and set maximum levels
7. Participation in schemes is voluntary
In some cases there is an obligation
to take part in a collective scheme. This is
viewed as not very effective. Participation
in schemes should be voluntary especially when
contributions are asked. Also, when shares are
given for free in an obligatory manner the identification
by employees are effective only in specific
situations where there is clear relationship
between individual and collective performance.
Effective schemes are voluntary schemes
with some matching contribution by employees.
8. ESO is embedded in functional equivalent HR practices
The stated objectives of identification
and commitment are not solely coming from employee
ownership. Also this research showed that to
be effective financial participation, i.e. employee
ownership, is part of a bundle of other practices
that intends to produce the same or related
effects. There are functional equivalent practices.
During the nineties, the focus of research
broadened to highlight the interrelationship
of this typical human resource-instrument to
other bundles of HR-practices, like the relation
with human capital strategies, like corporate
culture, training- and development-plans, and
ownership and control rights. There are also
interrelations with participative arrangements
in workplaces. It is said that this interrelationship
produces- combined with employee ownership-
the best effect.
We may conclude that to raise the effectiveness
of schemes companies should develop functional
equivalent human resource practices.
9. ESO supported by broad communication and consultation practices on business
Aligning interests is another result
that is achieved with the financial participation
scheme. To reach this companies develop, sometimes
extensive, communication and consultation concerning
the annual budget and evaluation of performance.
These are valued as very necessary this goal.
Effective schemes are supported with
broad communication and consultation on business
matters, more specific, annual budgets and evaluation
of past performance.
10. Parallel participative structures; layers of participation
The relationship with indirect participation
is important since share ownership suggest a
role in the ownership channel. In most cases
it appears that employees has limited or indirect
voting rights. Only in smaller companies there
may exist a joint stock approach with one stock,
one vote principle. As mentioned earlier companies
develop collective schemes with a trustee or
legal body that represents the employees in
the meeting of shareholders. In addition they
develop parallel structures for communication
and consultation on evaluation of past performance
and annual budgets. This guarantees commitment
in the decision process and avoids any problems
in the shareholders meeting. Also, companies
tend to have parallel structures for participation
and negotiations on labour terms and working
conditions. These are not directly related to
employee share holding and subsequent voting
rights. Companies develop a division of issues
to be handled by the employee share holders
representatives in the share holders meeting
and those issue to be handled by works councils
or other representatives.
Next, it appears that the line of command for
operations does not change or is hindered by
the existence of the scheme.
In addition to that the relationship with daily
operation is not apparent other than there that
should develop a higher commitment to the work
and organization. On the other hand the companies
develop structures for direct participation
and consultation apparently as a spin off of
the more open communication and consultation
on business matters. These become part of functional
equivalent participation practices.
We may conclude that for an effective
scheme parallel structures can be developed
that deals with participation in decision making.
We may conclude that the following structures
may be applied for the different functions they
stand for (see next scheme).
11. Well established internal market
In some cases problems arose with the
treatment of newcomers and the effect of employees
leaving the company. Plans that have solved
this problem have well established internal
market and the administering body has a stock
of shares or other bonds or ways of financing
to be able to be flexible and to handle the
Effective schemes have well established
internal market and have a body that is able
to handle the dynamics caused by newcomers and
those leaving the company.
12. Schemes are evaluated and changed regularly
Our study showed that schemes go through
stages and life-cycles in which the objectives
sometimes are met and sometimes not. In general,
there appears to be enthusiasm in the first
stages and gradually there come stages where
the scheme is a fact of life but does not influence
identification, commitment and alignment of
interest anymore. Companies try to avoid this
through more communications and through changes
in the plan and try to sophisticate it. However,
we may face the possibility of closing down
the plan when it is not effective anymore. It
appears that companies not always evaluate the
effectiveness of the plan. Share schemes are
not a medicine for all evil. Employees may become
resistant to it.
Effective schemes are those schemes
that evaluate its working regularly and is able
to change accordingly.
13. Training for financial participation
One of the main conditions for an effective
scheme is that employees know what it is and
what the consequences are to an employee owner.
Given other functional equivalent measures to
promote commitment and identification and alignment
of interest with the ultimate aim of improvement
of performance and entrepreneurship, training
of employees for participation is essential.
This is probably the main missing link in all
less effective schemes.
The scheme and functional equivalent HR
measures can only be effective when employee
owners are trained for participation.
FOR A LEGISLATION ON EMPLOYEE PARTICIPATION
IN CAPITAL AND IN ENTERPRISES PROFITS
(as presented in the Report of the Belgian Group
the initiative of the European Commission, some
general principles have been formulated with
which worker participation schemes must comply.
These principles originate in the two reports
entitled Pepper. They must thus form the basis
for the Belgian legislation in this connection,
and may be summed up as follows:
The participation mechanism must be installed
at the level of the company. It must
rest upon the voluntary participation
of the company (voluntary basis).
The participation mechanism must be the result
of collective consultation between the
employer and the workers.
The mechanism is of a collective nature,
in other words it is accessible to all the workers
in a company.
The participation mechanism must be based on
a pre-established formula where the link
with the company’s results appears clearly.
The participation does not replace the salary,
it is an additional income.
principles insist primarily on the fact that
the setting up of a worker participation mechanism
must be done on a voluntary basis. Companies
are not obliged to set in place a financial
it is important to stress the collective aspect
of the participation. This participation must
not be just the result of collective consultation;
it must, in addition, be open to all workers.
The workers’ participation must have a mobilising
effect. It encompasses all workers because the
commitment of every individual is important.
The participation of the workers is thus not
an instrument of individual motivation. On this
subject, there are other techniques, for example
stock options. The objective of worker participation
is to stimulate all workers so that they make
a commitment to the company.
worker participation calls for wide transparency
in the management of the company in such a way
as to clearly reveal the link with the company’s
results. This principle immediately makes the
link with corporate governance. Companies which
are well managed create the confidence necessary
for the smooth running, as should be the case,
of worker participation mechanisms.
these principles insist on the fact that worker
participation can under no circumstances be
a substitute for remuneration. Workers are not
company executives who have to carry the risks
of this. Workers must be able to benefit from
their normal income when the company’s results
are less satisfactory.
Belgian group of experts group added two further
principles to those contained in the Pepper
• The advantages granted in the framework
of participation mechanisms which meet the conditions
formulated by the working group do not fall
under the normal fiscal and quasi-fiscal scheme
applicable to remuneration. The working group
has mapped out the specific fiscal and quasi-fiscal
scheme to which these advantages will be subject.
Companies will be able to avail themselves of
two participation formulas: participation in
capital and participation in profits.
the Belgian group of experts defined a set of
conditions requiring to be met by the participation
mechanisms in order to be able to benefit from
a specific fiscal and quasi-fiscal scheme:
Conditions requiring to be met by the participation
mechanisms in order to be able to benefit from
a specific fiscal and quasi-fiscal scheme
participation mechanisms offer a fiscal and
quasi-fiscal advantage which the authority is
minded to grant. Accordingly, some essential
conditions have to be set so that these mechanisms
can come into consideration for the granting
of these specific advantages. The conditions
set out below must be considered as the standards
to be complied with in order to obtain a ‘quality
label’ giving entitlement to the fiscal and
these conditions were drafted, the working group
also took as a guide the idea that the formal
prescriptions applicable to the participation
mechanisms should be as flexible as possible.
Otherwise, the point is that the participation
ceases to be attractive. The method proposed
to guarantee this flexibility consists of giving
companies sufficient freedom in the choice of
a suitable participation mechanism. The working
group thus recognises that various models of
participation may be envisaged. The result must
be that it can satisfy small and medium-sized
enterprises, expanding companies and companies
in recession equally. This is the only way to
make participation attractive for all companies.
The working group
has framed a series of conditions. Some of these
conditions are obvious and do not call for any
long commentaries. This is not the case with
other conditions, which do need a commentary.
1. The initiative
to set up a participation mechanism lies with
the management of the company. This initiative
is the subject of consultation in the framework
of the legal consultation bodies within the
company. In companies where such consultation
bodies have not been set up, although they should
have been in accordance with the law, it will
first be necessary to set up these bodies before
a participation mechanism can be started up.
In the absence of the consultation bodies provided
by the law, a consultation procedure will have
to be followed in line with the provisions laid
down in the employment regulations.
This collective consultation must lead to the
conclusion of a specific company Collective
Labour Agreement which gives concrete shape
to the formal conditions in the participation
plan. In companies traditionally outside the
mechanism of company collective labour agreements
(companies with fewer than 50 workers and no
union delegation), workers will have to sign
an act of accession which will be submitted
for the minister’s approval.
The wage standard must be respected. This means
that the financial participation can be set
in place only where the wage standard has been
exhausted. This condition gives concrete shape
to the principle that the participation cannot
be a substitute for remuneration.
The participation mechanism may be set up at
the level of the company or the group of which
the company is part. If the participation is
set up at the level of the company, the profit
statement must be made under Belgian legislation
on company accounting. If it is at the group
level, the ad hoc accounting standard on the
consolidation will be applied. In this case,
only one collective labour agreement will be
concluded for all the Belgian subsidiaries of
the group. Certain companies are subsidiaries
of a parent company. These companies have to
be able to opt for a participation plan of their
own, or for a plan applicable to all the Belgian
subsidiaries of the same group. This option
makes it possible to promote staff mobility
between the subsidiaries of one group.
A dual ceiling is provided:
The total advantages granted in the framework
of the participation mechanism may not exceed
10% of the total wage bill (gross remuneration)
of the company.
The total advantages granted in the framework
of the participation mechanism may not exceed
20% of the profits. ‘Profit’ here means the
profit in the accounting year to be allocated.
(In the case of a group, the figure to be used
is the net result of the accounting year).
advantages deriving from the participation mechanism
are uncertain and create risks for the workers.
That is why it is necessary to establish a ceiling
to cap the extent of the participative advantages
with regard to remuneration.
Every participation mechanism must be open to
all the workers in a company. The specific company
collective labour agreement will determine whether
or not workers are compulsorily required to
be part of the participation mechanism. This
condition is a compromise between two ideas.
The first idea is that the individual workers
must be free to decide whether or not to join
the participation mechanism set up by the company.
The second school of thought focuses on the
collective aspect of the participation and lays
down the principle that all workers should participate
when the company decides to set up a participation
mechanism. The compromise lies in the idea that
the employers and the workers decide in the
framework of their collective consultation whether
membership of the participation mechanism should
be on a voluntary individual basis or not.
By a worker, we mean a salaried worker. No distinction
is drawn between limited-term contracts and
unlimited-term contracts. The company collective
labour agreement may lay down a seniority condition.
The advantages deriving from the participation
mechanism are in principle the same for all
workers. The specific company collective labour
agreement may, however, make departures from
this rule. In such cases, only the remuneration
may be taken as an objective criterion for the
distribution of the benefit, it being understood
that the maximum advantage may not be more than
twice as high as the lowest advantage. This
condition is great influenced by the idea that
the participation is a collective affair. it
constitutes an instrument likely to mobilise
all the members of the staff. This may be best
achieved by guaranteeing an egalitarian principle.
Larger and smaller players will all receive
the same thing. This sort of choice also maximises
the likelihood that the participation will be
accepted both within and outside the company.
This egalitarian principle also allows the same
contribution to be made by the authority for
every worker in the participation mechanism,
in the form of the fiscal and quasi-fiscal advantages
granted. However, the working group was of the
opinion that a certain flexibility in the application
of this egalitarian principle was desirable.
The advantages granted in the framework of the
participation mechanism can be in cash or in
shares. The shares awarded must give their holders
the normal voting rights. The fiscal and quasi-fiscal
processing of the participation in the capital
will be more attractive than that which is applicable
to advantages awarded in cash. The working group
proposes the following fiscal and quasi-fiscal
The participative advantage constitutes part
of the company’s after-tax profit. Half of the
corporation tax which is paid on the share of
the profit assigned to the participation mechanism
is allocated to social security.
If the participative advantage is allocated
in cash to the worker, the worker’s personal
share to social security is payable. The balance
is subject to a levy of 25%.
If the participative advantage is allocated
in shares, it is subject to a levy of 15%.
needs in terms of participation mechanisms may
vary radically. That is why there is a need
to offer the greatest possible freedom in the
choice of the participation formula. In some
companies, there may be a preference for forms
of direct cash allocation, while in others,
the preference will be for the allocation of
shares (participation in capital). Companies
may also wish to apply both forms of participation.
The working group is of the opinion that the
specific fiscal and quasi-fiscal scheme must
be more advantageous vis-à-vis a participative
advantage in shares rather than in cash. The
reason is that in the framework of a participation
in capital, workers are more closely involved
in the company and run more risks. In addition,
the shares are blocked for a set period (see
condition 10 below).
Where the participative advantage is allocated
in the form of shares, the specific company
collective labour agreement sets the period
for which the shares are blocked. The law will
determine a minimum period. The point is that
it is necessary, in the case of an allocation
in the form of shares, to avoid the latter being
immediately resold by the worker. In fact, in
such a case, there would no longer be any difference
between this scheme and an allocation in cash.
That is why a period of blockage is indispensable.
This period must, however, not be too long,
at the risk of making the link between the results
of the company and the advantage deriving from
them for the wage-earner too fleeting. The minimum
duration of blockage proposed is 2 years. Nevertheless,
the company collective labour agreement may
provide for a longer period of blockage.
The specific company collective labour agreement
likewise lays down whether the allocation of
the participative advantage is to be made via
an intermediary structure (for example: participation
fund, co-operative society) or not. If an intermediary
structure is set up, the specific company collective
labour agreement may also stipulate that the
workers may opt for the allocation of the participative
advantage via the intermediary structure or
for direct allocation. The right to vote within
this intermediary structure will follow the
principle of 1 person/1 vote. The idea underpinning
this condition is that for certain companies
(for example SMEs, but not necessarily all SMEs),
an intermediary structure is indicated for the
management of the workers’ participative advantages
in capital. For other companies, this is not
necessarily the case. The company needs to be
able to position itself freely depending on
its own needs. The fiscal and quasi-fiscal processing
of these two forms of participation in capital
must be neutral, in other words it must not
favour one form over the other.
12. The participation mechanisms may not
be set up to the detriment of employment. Neither
must they have the effect of modifying the company’s
employment policy. That is why the consultation
which must take place within the company ahead
of the setting up of a participation mechanism
must likewise include a discussion on the employment
policy. The conclusions of that discussion must
appear in the specific company collective labour
agreement. At the macro-economic level, the
social partners will regularly evaluate the
impact of the participation mechanisms on employment.
There is a legitimate fear in some quarters
that participation may be used to force the
readier acceptance by workers of employment
and restructuring measures. The company’s profits
after restructuring may in fact increase and
therefore serve to the benefit of those who
remain. That is why it is necessary to establish
clearly, within the framework of the collective
consultation procedure, the extent to which
the participation mechanisms will have an influence
on employment within the company.
The complete Report of the Belgian group of
experts is available on http://home.pi.be/~pin13904/DEGRAUWEEN.pdf
(English version) and on http://home.pi.be/~pin13904/DEGRAUWEFR.pdf
EIGHT GENERAL PRINCIPLES WITHIN THE COMMUNICATION
OF THE EUROPEAN COMMISSION (details)
overview of different forms of financial participation
has shown the great variety of financial participation
schemes. At the same time, there also exist
a number of core elements and principles which
characterise most financial participation schemes
and Member States policies. The general principles
identified here reflect this basic consensus
and can act as a reference point for the identification
of good practice. They should thus inspire the
promotion of financial participation schemes
across Europe and serve as a guideline for Member
States, social partners and enterprises.
participation schemes should be voluntary for
both enterprises and employees. The introduction
of financial participation schemes should meet
the actual needs and interests of all parties
involved, and should therefore not be imposed.
Obviously, this does not preclude that some
elements of financial participation are made
mandatory, or that financial participation is
introduced on the basis of legislation or collective
agreements. Government support programmes and
the provision of a clear legal framework are
important elements in promoting the use of financial
participation schemes. The involvement of the
social partners can also be a major factor in
making sure the success of financial participation.
the benefits of financial participation to all
to financial participation schemes should in
principle be open to all employees. While a
certain differentiation may be justified in
order to meet the different needs and interests
of employees, financial participation schemes
should aim at being as comprehensive as possible
and treating employees on similar terms.
the main benefits of employee financial participation
are the increased identification of employees,
creating a feeling of belonging and improving
the motivation of staff. Any discrimination
between employees would run completely counter
to these objectives and should therefore be
Financial participation schemes
should be set up and managed in a clear and
transparent way. This is important for the acceptance of such schemes
and allows employees to assess fully the possible
risks and benefits involved. Priority should
be given to clear, comprehensible plans, with
an emphasis on the transparency for employees.
In this relation it is particularly important
that employees or their representatives are
informed and consulted about the details of
financial participation schemes which are to
Especially share-ownership schemes
will almost inevitably involve a certain complexity.
In this case, it is important to allow for adequate
training for employees to enable them to assess
the nature and details of the scheme in question.
should also be managed in a transparent way.
Enterprises should strictly adhere to existing
accounting standards and disclosure rules. In
addition employees should receive regular information
and should be informed about any developments
which may have a major impact on their investment.
on financial participation in companies should
be based on a predefined formula clearly linked
to enterprise results. This is a major element
in ensuring the transparency of such schemes.
Also with view to the motivation, commitment
and identification of staff it will obviously
be preferable to adopt a clear and predefined
formula rather than decide on any profit-sharing
scheme only ex-post.
schemes should be applied on a regular basis
and should not be a one-off exercise. This is
particularly important if such schemes are aimed
at enhancing and rewarding the long-term commitment
and loyalty of staff. It is obvious that this
regularity in the application of schemes does
not imply that the benefits derived from them
remain stable over time. It lies in the nature
of financial participation schemes that the
bonuses received will vary depending on enterprise
results and profits and that in some years no
bonuses will be paid at all or that there may
be a fall in the value of employees’ investments.
unreasonable risk for employees
to other ‘investors’ employees tend to be more
exposed to adverse economic developments affecting
their enterprise. For them, it is not only their
investment that is at stake, but potentially
also their income and their job itself.
The extent to which financial participation
schemes involve risks for employees depends,
however, on the details of each scheme. In general,
cash- or fund-based schemes are likely to involve
only limited risks. Also in relation to share-ownership
plans possible risks for employees depend to
a large extent on the details of each plan,
including for example the length of any retention
period, provisions concerning an earlier sale
of shares, or ceilings on the amounts that can
the potential risks for employees involved,
due consideration should in any case be given
in the introduction and running of financial
participation schemes to the avoidance of any
unreasonable risks. At the very least, employees
have to be warned of the risks of financial
participation resulting from fluctuations in
income or from limited diversification of investments.
As set out above, financial participation schemes
should also be introduced and managed in a clear
and transparent way. When designing financial
participation schemes, consideration should
be given to develop mechanisms or to give priority
to such schemes, which avoid excessive risks
for employees taking into account the objectives
pursued with the respective scheme.
between wages and salaries and income from financial
clear distinction has to be made between income
from financial participation on the one hand
and wages and salaries on the other. In some
specific cases (for example for top executives
or in the case of start-up firms) income from
financial participation, and in particular stock
options, may constitute an important part of
the overall remuneration. In general, however,
financial participation cannot be a substitute
for pay and fulfils different, complementary
roles. Any income from financial participation
should therefore be paid in addition and above
a fixed wage, which is determined according
to national rules and practices. In this respect,
social partners can of course bargain over pay
and terms of financial participation as they
8. Compatibility with worker mobility
participation schemes should be developed in
a way that is compatible with worker mobility
both internationally and between enterprises.
Policies towards financial participation in
particular should avoid creating barriers to
the international mobility of workers.
of the main objectives of financial participation
obviously is to enhance the long-term commitment
and loyalty of employees to their enterprise.
However, at the same time more and more employees
are faced with increased demands for mobility
and flexibility in working life. Adequate provisions
that take into account both the company’s interest
in a long-term commitment of their employees
and the employees’ right to mobility should
therefore be made in the design of financial
participation schemes for dealing with any problems
resulting from a termination of contracts.
of employee share ownership and participation
are developing in Europe and we can now go
to the definition of a set of common rules
It was a main point of the Fourth
European Meeting - Bilbao Mondragon 2002.
This could help for the definition of harmonized
Three main sets of principles are presented
1. The most complete set of European features of best practices
was presented by Erik Poutsma and others (in a Draft Report on "Practices of financial participation
in Europe - Features of best practices"
- see below for details).
2. Another interesting work was done by Belgian
experts representing social partners and all
main political parties, defining common principles
and allowing Belgium to define its new legislation
on employee financial participation.
3. Finally, the European Commission proposed
a set of 8 general principles in its Communication
on a framework for the promotion of employee
You find a comparative table clicking here on: Table
of European principles on employee share ownership.
4. On the other hand,
Federation suggests a rating for companies
about their employee shareownership (in French,
for Effective Employee Ownership - Practical
guidelines for employee ownership in USA -
In 2004, the National Center for Employee
Ownership (NCEO); the Beyster Institute at
the Rady School, UC San Diego; and the Global
Equity Organization (GEO) created the Committee
for Effective Employee Ownership (CEEO). The
CEEO's primary goal is to devise principles
intended to help companies and investors make
appropriate, economically sound choices about
the distribution of equity among employees.
In addition, the CEEO seeks to provide general
guidelines on how companies can best use broad
employee equity ownership plans to create
more productive and rewarding workplaces.
The CEEO bases each of the principles in this
document on objective research by scholars,
advisors, and the National Center for Employee
Ownership; the principles are not simply our
opinion or philosophy. The CEEO does not propose
these principles as the basis for laws or
regulations. Instead, it believes that market-proven
benefits of responsible employee ownership
can prove themselves without rhetoric. In
order to make this happen, business and investment
leaders need a deeper understanding of how
these various approaches to employee ownership
operate. The findings of the CEEO are available
also available: Committee
for Effective Employee Ownership, the full
document (49 pages, pdf)