This study reviews the evidence of whether employee financial participation can lead to greater employee commitment to the purposes of the organization, or whether it is simply a means of giving or receiving tax-efficient remuneration. The report does this by looking at the different forms of employee financial participation - how they have developed and why they have been introduced. It also looks at survey evidence on the impact of financial participation on employee attitudes and behaviour. Is it merely another form of pay, generating little involvement by employees, or does it help attract, retain and motivate staff? Employee financial participation can be associated with improved productivity and more positive employee attitudes, but it cannot be proved that there is a causal relationship between the employee financial participation and these benefits.
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About the Author
John Cummings is a Research Officer, Stephen Bevan an Associate Director and Peter Reilly a Principal Research Fellow at the Institute for Employment Studies. They have considerable experience consulting, researching and writing on reward issues.
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