Management is a Journey®

Helping You With the People Side of the Business™

Employees Need To Be Owners!

In This Article

(Click the links below to move easily to sections of this article)
What is Employee Ownership?
The Hertz Rental Car Repair Paradox
Why Employee Ownership Works

People tend to resist that which is forced upon them. People tend to support that which they help to create. (Vince Pffaf)


Back to Top

What is Employee Ownership?

You might think this article is about an employee stock option program (ESOP). It’s not!

Rather this article is about another form of employee ownership that you can offer to your employees at any time.

This type of employee ownership is not about finance. Rather, it’s about leadership.

The employee ownership I’m writing about requires you to share another organizational asset that comes with your managerial position.

Specifically, this type of employee ownership requires you to shares some of your power and decision making authority with your employees who have shown that they are able to handle it.

It’s not about employee-stock ownership; it’s about employee-involvement + employee-empowerment ownership.

So, given everything that you have to do in your organization, why should you care about employee ownership in the workplace?

That’s a valid question! I’ll answer it with a real world example that I use in my leadership development work. It’s a short story.

Employee ownership begins with involving employees in workplace operations, making them accountable, and then trusting them to do their work. It's shared leadership. Click To Tweet
Back to Top

The Hertz Rental Car Repair Paradox

(Why No One Takes Their Hertz Rental Car For a Tune Up)

You’ve worked hard all year and you decide to take a short road-trip vacation with your family (humor me and pretend you’re a parent if you aren’t one). Being a responsible parent, you make sure, with your significant other, that all of the important arrangements are handled. As this is a road trip, you save the reservation of your rental car that you will need for all of this driving as your last action. As you make your reservation with Hertz car rental for the vehicle that you will use, you and your significant other can now rest easy.

But have the two of you really taken care of everything? Specifically, did you include an extra day in your travel plans to take your Hertz rental car for a tune up before you start your road trip?

Right now, you may be thinking: That’s a dumb question! Who takes their Hertz rental car for a tune up?

The truth is that you’re right: even a responsible parent like you is not going to take the Hertz rental car in for a tune up.

In fact, when have you ever took any rental car (Hertz or otherwise) in for a tune up? The answer is probably never and if it ever happened it was because of extreme circumstances with your rental.

So, what’s the point of this story?

Here’s what’s important to you as a manager from this story:

  1. Paying for maintenance on a car that you are renting for your vacation makes little sense. You don’t own the car — the rental company owns it! The rental car company is responsible for making sure that their rental car has the necessary tune up before you ever rent it.
  2. Your own car? Now that is a different story! You pay for the maintenance because it’s yours — you own it. You know that if you want it to continue to work for you, you’ll have to take care of it yourself.
  3. The same is true in the workplace. If you own everything in the workplace, you’re responsible for fixing everything yourself. Your employees will do what you say, but they likely won’t do much more than that because again the workplace is your car. Instead when things don’t work out, they’ll probably just look to you to fix everything.
People are more concerned about what they own themselves. Want committed employees? Give them ownership with you in making things work! Click To Tweet
Back to Top

Why Employee Ownership Works

Here’s two real-world facts that explain the importance to you of employee ownership in the workplace:

  • First, people tend to take better care of what they own themselves as they have more personal investment in the outcome (employee involvement).
  • Second, people are more proactive about doing something well when they have (1) the tools that they need, (2) clear standards of acceptable performance, and (3) the autonomy to produce the desired outcome (employee empowerment).

Think about it this way: As a manager, if you choose to own everything yourself your employees will feel less responsibility to help you when things don’t work out. Requiring your employees to “help own the solution” both for their own performance and for business operations in general has a positive impact on employee motivation and on organizational productivity.

When you involve your employees in workplace operations, you make them co-owners with you of the eventual outcomes. This insight is a powerful tool for you to understand and leverage.

So, how can you get started immediately in making your employees co-owners with you in the workplace?

You can start this process by doing less telling in your communication with your employees. Instead of telling, do more asking.

The next time your employees come to you about a problem resist that strong urge that you have to tell them what to do. Instead, turn the tables on them and surprise them with this simple question: What do you think? Do this enough with your knowledgeable and responsible employees and you’ll be surprised at what they can tell you.

This concept is known as employee involvement and when you combine it with employee empowering (trust and accountability) you create employee ownership.

Employee Ownership = Employee Involvement + Employee Empowerment (accountability & trust) Click To Tweet
Written by Robert Tanner | Copyrighted Material | All Rights Reserved Worldwide

Robert Tanner, MBA

Welcome to my leadership blog. I'm the Founder & Principal Consultant of Business Consulting Solutions LLC, a certified practitioner of psychometric assessments, and a former Adjunct Professor of Management. As a leadership professional, I bring 20+ years of real world experience at all levels of management.

Expert Presenter

Association of Talent Development

Expert Interview

Society for Human Resource Management

How to Stop Employee Resistance to Change

Ready for others to think of you as an effective leader who knows how to get a team to implement change? Learn practical strategies to move your employees from resisting you to working with you.