Recent research published by the University of York in the United Kingdom has found that in comparison to several other employee engagement models, employee ownership was a KEY FACTOR in engagement due to the presence of psychological ownership.

In psychology, ownership is the feeling that something is yours.

Psychological ownership is distinct from legal ownership: one may feel that one’s cubicle at work is theirs and no one else’s (i.e. psychological ownership), but legal ownership of the cubicle is actually conferred to the organization.

A central belief of psychological ownership is that employees share the long-term interests of the business and its owners.

Psychological ownership refers to the experience of possessing and being psychologically tied to an entity. Such feelings of ownership are fundamental to human life. Every day, we interact with a variety of objects we own, both material and immaterial. The state of psychological ownership is not only cognitive but also affective: simply by calling an entity — whether an object, another person, or a job — “mine” suggests that we have an emotional connection to it.

Employees often express a desire for greater psychological ownership of their work, believing this will improve their job satisfaction and happiness.

This factor added an additional dynamic to engagement as the meaning of work was influenced by employee ownership. “Family culture” was present in the organisations which drove employee ownership values. Social, affective, and intellectual engagement and vigour, dedication and absorption were found to be influenced by the presence of employee ownership.

Employee Ownership

When employees are also owners, their relationship with the organisation is changed and this affects the way they think and behave. Theory and research on employee ownership suggests that employee-owners exhibit behaviours that are intended to enhance the financial status of the organisation. These include improving their job performance, finding ways to cut costs and suggesting innovative ways to increase revenues.

Employee Engagement

The study concludes with two key statements; that employee engagement “enhances the experience of employee ownership and employee ownership influences employee engagement.”  Finally, that “employee ownership plans encourage employees to think and act like owners, and this enhances organisational performance”.

How do you encourage psychological ownership and an ownership mindset in your organisation?

Craig West

Managing Director | Succession Plus

Craig West is a strategic accountant who has over 20 years’ experience advising business owners. His background as a CPA in public practice, provided invaluable experience in the key issues of concern to business owners. Following 6 years of study to gain two masters degrees, Craig focused on Capital Gains Tax (CGT) for business sales advising on strategic management of tax issues. This experience formed a very strong view that business owners (and often their advisers) were unprepared and unaware of the steps required to prepare a business for exit.

Craig now acts as a strategic mentor for mid-market business owners and has written four critically acclaimed books on employee incentives, succession planning, asset protection and exit strategies. Craig has conducted numerous seminars and keynote presentations throughout Australia & internationally, including adviser education programs for the Institute of Chartered Accountants and CPA Australia.