4 Things That Will Give Employees a Sense of Ownership
You’ve seen the headlines — employee engagement is frighteningly low. In fact, research from Gallup indicates that only 15 percent of employees globally are engaged in their work. There are numerous strategies intended to combat this apathy and engage employees, but one of the most important involves cultivating a culture of ownership.
When employees feel a sense of ownership over their company and their work, they’re more likely to do their best. After all, they have “skin in the game.” In an ownership culture, employees are guided less by rules and more by their own personal values, and they are more likely to make the right decisions even when no one is around to catch them if they take the easy way out.
Ownership is also important because it gives employees a sense of autonomy. Instead of requiring constant hand-holding, employees will focus on what the company needs overall rather than just what’s required of them. That’s because they feel invested in the team’s success. Contrast that with employees who do what they’re told and nothing more, and you begin to grasp the true importance of an ownership culture.
Your employees are the living testament to your company culture, and it’s important to start with a strong foundation. Once you feel like you can trust your employees to work hard for the right incentives, you can begin to explore the following options to establish a culture of ownership.
4 Things That Will Give Employees a Sense of Ownership
Including everyone in the creation of your company’s visions and goals
Traditionally, executives at the top steer the company vision and then dictate it to employees further down the ladder. It rarely occurs to most business leaders in the trenches for years that there is another way. But there is. When employees at all levels contribute to a company’s vision, a much greater sense of ownership develops. Engage as many employees as possible in brainstorming sessions. Give everyone the chance to identify the vision and values that they think should drive the company forward.
Say a financial institution is developing a new vision and prioritizing a set of values. To engage a wide range of employees in the visioning process, the company could reach out to all employees via a survey and then recruit individuals from different departments to lead visioning sessions that examine the company’s strengths, goals, and what’s been working well. The vision statement that results from the work of this interdepartmental team will have greater buy-in because employees were a vital part in shaping it. While employees might voice new and exciting ideas, perhaps the most important product of these efforts will be a strengthened sense of ownership.
Giving employees autonomy in their roles
If employees are going to feel a sense of ownership, it’s vital that they have control. This includes control on how their roles are performed. According to a study from the University of Birmingham Business School that drew on data from 20,000 employees, increased autonomy leads to increased levels of job satisfaction. When possible, give employees some control over where and how they do their work. You might allow them to work remotely one day a week. You should definitely give them the authority to do what’s best for the company. All this without needing to consult a manager for every single decision.
Of course, there are some decisions that should be left to the C-suite, but there are many others better handled by the employees who are closest to the situation. Give your team members the training they need to make informed decisions. That means providing any industry context necessary for their role and coaching them on decisions that they feel unsure about. Over time, they’ll gain more confidence after hearing your feedback on situations where they were unclear on the best route. Your employees won’t always make the decision that you would have made, but you need to be comfortable with that. After all, developing autonomy requires the parties involved to trust one another.
Sharing the profits
For companies that are already profitable, profit-sharing plans can help give employees a vested interest in the work they do. In fact, companies have seen profit-sharing plans improve employee loyalty and engagement, boosting productivity. While implementing a deferred profit-sharing plan can be complex and subject to IRS regulations. There are easier ways to give your employees the motivation they need.
Use a cash profit-sharing plan to give employees a predetermined share of profits via cash, a check, or stock options. These earnings are taxed as part of normal employee compensation. This approach gives you lots of freedom to determine the rules and eligibility. For example, you could stipulate that employees who have been around the longest will earn a greater share of the profits.
Literally passing on the ownership
When the co-founders of King Arthur Flour were contemplating the best strategy for their long-anticipated exit, they wanted to ensure that their company stayed true to its small-town Vermont roots. Instead of selling to a major investor or handing over the reins to a family member, they transferred their shares in the company to an employee stock ownership program (ESOP) over the course of eight years.
Even if you didn’t launch your company with an ESOP in mind, you can always phase one in. Consulting firm Pariveda didn’t have an ESOP until 2007, but now the company is 34 percent employee-owned. Eventually, that will become 100 percent. For Pariveda’s founders, the ESOP is not about having an exit strategy, but instead about propelling people forward. This view is supported by studies showing that an ESOP can result in more engaged workers and higher profits. For instance, a team of researchers from the University of Iowa, Villanova University, and Indiana University found that if a company has significant employee ownership, it could expect to be 4 percent more profitable than other companies without such a program.
An ownership culture isn’t cultivated overnight. It’s the product of months and years of striving. Consider the steps above and decide which ones are right for your company. When your employees have a stake in your company, you may be surprised at the improvements in performance.