This year I have been honored to spend time with numerous ESOP companies and thousands of employee owners across the country. No matter where I go, I am always asked the following question: How can I and do I engage my employee owners to ensure they truly understand this benefit?
October is always an amazing time of the year as the weather changes from the warmth of Summer to the crispy cool temperatures of Fall. These seasonal changes remind me of the transitions we all face no matter the industry we work in. As things change, we can’t forget to look back and remember the past and where everything initially started.
Last week was the start of ESOP Employee Ownership Month (EOM) 2014. In my August 2013 ESOP Report article "It’s Not (Just) What You Say, It’s How Often You Say It," I discussed how EOM can also be used to promote your ESOP internally. Daily or weekly celebrations and events are commonplace, and provide multiple opportunities to keep the ESOP fresh in the minds of your employee owners.
Retaining a valuable employee is one of the bigger challenges a small business owner will have to find a solution to in order to achieve long-term success. Much is invested in both time and money to recruit and train good employees. So what exactly does it take to attract and retain a good employee today?
The IRS has announced the 2012 pension plan limits, including the following:
Here is the second question on the Employee Stock Ownership Plan Review Worksheet:
Spur U.S. retirement security, preserve and expand S-ESOPs discusses how S Corporation ESOPs are good for workers, business, and the economy:
- Ohio Reduces Funding for OEOC
- Time Remains to Take NCEO's Survey on Private Company Equity Compensation Practices
- Senators Introduce Bill That Increases Tax on Stock Options
- Twitter to Use Private Financing to Buy Employee Shares
- IRS Announces Adjustments to ESOP Review Process
- New NCEO Video
The State of Ohio has provided funding for the Ohio Employee Ownership Center (OEOC) at Kent State University since 1987. For the fiscal year starting July 1, 2011, however, due to the state's budget crisis, grant funding from the Ohio Department of Development will not be available, resulting in a substantial loss of funding for the OEOC. However, most of its funding comes from sources other than the state grant, and the OEOC says it wants to "assure the employee ownership world of our commitment and ability to maintain the Center's operations, in both the short and the long term." The OEOC will continue to operate and to encourage and facilitate the growth of employee ownership.It also discusses a proposal that would require companies to report stock option valuations using same methodology for book and tax purposes. Stock Option Accounting Is on the Line explores this issue further.
- Winning Workplaces: Employee Ownership Decreases Turnover
- Republic Airlines Flight Attendants to Receive Equity Stake
- Experimental Economics and Employee Ownership
- Polish Coal Company IPO with Employee Stake
- NCEO Sponsors Ownership Thinking Conference
Mark Harbeke's blog post Employee Skin in the Game Is Good for Business draws on data from the 342 organizations that applied for this year's Winning Workplaces award. His finding? The organizations without employee ownership had an average of 16% employee turnover in 2010, while organizations where 40% or more of employees own shares had turnover under 11%. Harbeke notes that voluntary turnover is actually at a three-year high, making retention especially important, and concludes that employee ownership is "a vehicle for both increased job satisfaction and commitment (helping to keep in check and even reduce voluntary turnover)."
It also discusses how Workplace Democracy in the Lab, a research experiment and discussion paper that explores how ownership incentives impact job performance. Do Workers With a Say on Pay Work More? reviews the experiment and findings in more detail:
"The authors contend that a vote on compensation structure acts like an incentive without altering the amount of compensation. For getting a choice between two earnings schemes with the same bottom line for the company, workers will express thanks by working harder How much harder? Having a say hiked output by 7% and, better yet, effective output - meaning improvement in quality, not just volume rose by 9%."