If you're a decision maker in an employee ownership company, you've given a lot of thought to how well your company shares information, how well it involves people in decision making, and how much people feel like owners.
The way you feel about these issues has a significant effect on how you perceive employee ownership. Every employee in your company has opinions on all of these issues--those opinions affect how employees think, how they act, and, ultimately, how effectively your company operates. These opinions are the building blocks of an ownership culture, and a convincing body of research supports the idea that an ownership culture is the key to the competitive advantage of employee ownership.
Measuring Ownership Culture
If your company is making a systematic effort to promote an ownership culture, then you are wrestling with people's perceptions of ownership and of the company. Some companies do this "subconsciously," unaware that they are making assumptions about what people think. More often companies make their choices consciously but with poor data. They develop training programs or communications systems based on what managers think employees think. Many companies, in other words, are investing time and resources based on managers' opinions about employees' opinions--sometimes it works, but it's shaky ground.
Faced with a lack of reliable information about their cultures, several clients of my firm, Ownership Associates, Inc., asked us to develop a tool they could use to track their progress. Based on our experience and their input, we began work on the Ownership Culture SurveyTM (the "OCS") in 1991, and have been actively using it with clients since 1994. This column is based on the data collected from companies presently using the OCS.
Managers and Non-managers
Managers in employee-ownership companies tend to feel more like owners than non-managers do, and the difference is substantial. On our 1-to-10 scale, with 10 being the maximum ownership identification, managers score a 6.5 on average; non-managers score 4.3. (This difference is statistically significant at p = 0.001.) This result is not surprising--managers do exercise more of the rights of ownership, and they often own a larger portion of the company stock.
It is also important, however, to measure how much managers think employees feel like owners--this perception will affect how managers feel about employee-ownership, and what they think the company should do to promote it. When we ask managers to guess how much members of the work force feel, on average, like owners, they typically overestimate employees' ownership-identity scores by about 20%.
We have found that these "gaps" between managers' perceptions and employee perceptions can be the source of distrust and tension. The lack of alignment represented by these gaps tends to recur in specific parts of an ownership culture and to have some predictable effects.
The Meaning of Ownership
One part of the OCS asks people what ownership means to them in the abstract. In the case of company ownership, we ask them to rate the importance of five possible meanings of ownership: financial return, participation in local/operational decisions, influence in global/strategic decisions, a sense of community, and fairness. Take a minute to decide which of these five you think is most important.
Chances are you picked fairness. That's the most popular answer, with the number-one rating in 80% of responding companies for both managers and non-managers. The least popular answer, by the way, is influence in global/strategic decisions. The differences among the other three aspects are not generally significant.
From the perspective of perception gaps, the low discrepancy between managers and non-managers about the importance of these items is a positive sign. Managers and non-managers choose roughly the same importance rating for each item, and they tend to rank order the five aspects in almost the same way.
Within some companies, however, there are sharp differences. At one client, managers said that financial return was the least important aspect of ownership; non-managers said it was the most important. But on the whole, managers and non-managers seem to be starting from roughly the same place when they think about ownership in the abstract.
Participative Decision Making
We have consistently found that employee-owners who believe they have the opportunity to contribute to decision-making at their company feel more like owners and accept more of the responsibilities of good "organizational citizenship." (See Ownership Culture Report, Fall 1998.) Much of the potential power of employee ownership comes when a work force has the tools and motivation to make the best possible choices in how they perform their day-to-day work and when they can contribute their ideas to company-wide decisions--managing participation wisely is a key to achieving maximum results from employee ownership.
Managers generally have more positive perceptions than employees do about how well the company encourages broad input. The average gap between management scores and employee scores is about 0.4 on a seven-point scale. That includes some companies with no gap at all and a couple with a gap larger than a full point.
The next part of the story is that the disconnect between managers and employees affects some very important parts of your organizational culture. For example, in the companies we have worked with, a gap between manager and employee perceptions about participative decision making is statistically related to:
- How much non-managers feel like owners;
- How much non-managers trust managers; and
- How much non-managers trust the employee ownership plan.
(The correlation coefficients are -0.8, -0.6, and -0.7, respectively.) The bigger the perception gap, the worse companies score on these measures: the chart below shows ownership identity scores (how much people feel like owners) for companies with small, medium, and large perception gaps about participative management. [The blue line shows the average ownership identity score for each category of gap.]
More Than Gaps
While gaps in manager and non-manager perceptions of participative decision making are important, gaps are not the whole story. Perception gaps cause dissonance and reduce the gut-level faith that people have in large, abstract ideas like ownership and trust. But on other, more concrete issues, managers' and employees' raw scores, not the gap between them, tend to determine how healthy a company's culture is.
When we look at the link between participative decision making and customer orientation, for example, perception gaps are less important. The absolute level of perceived participation in decision making has a substantial relationship with how customer-oriented the work force is--but the gap between manager and employee perceptions does not matter so much. The same is true for the relationship between participative decision making and organizational commitment.
So how do you go about reducing a perception gap? There's no simple or easy way to get people to re-evaluate how they feel about each other. Organizational psychology literature suggests that the best way to achieve such a change is to have people engage in structured discussions with their peers in a psychologically safe environment. While this may sound like an impractical task, our clients have found such discussions to be effective at making managers and employees more comfortable with each other's perspectives.
Gathering data is a crucial part of this process. You cannot see where gaps exist in your company, because your own perceptions may be part of the "disconnect" between you and the work force. Quantitative input can help you determine where perception gaps exist and how severe they are. You need to prioritize: only some gaps are a hindrance at a given stage of culture development, and sometimes gaps are not the most important thing keeping your company from taking the next step to a stronger ownership culture.
If perception gaps are an issue at your company, our experience suggests two basic principles on which your management team should increase its focus:
- Consistency: each time a manager acts in contradiction with the stated goals and vision of the company, or with previously made promises, the work force revises its opinion of management's sincerity downwards, resulting in a widened gulf between the two groups.
- Listening: by actively gathering input and listening to the opinions of the work force, managers gain a more realistic opinion of what their orientation is, and a better idea about what programs are appropriate for the company. If a survey is well designed and its follow-up carefully planned, it can serve as an ideal "listening tool."
To get the maximum return on your investment in ownership, you need to manage your ownership culture. Reliable information helps you understand how your culture is developing and what steps will best promote its health--a systematic survey is one tool that several of our clients have found valuable. The next time you find yourself allocating resources based on your evaluation of the state of your ownership culture, ask yourself if you know what the work force thinks, or if you just think you know what they think.