Contribution Factor Theory

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posted on Oct, 9 2011 @ 10:25 PM
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Originally posted by beezzer
What if, as a corporation, I provided enough shares to encourage productivity in all my employess?

So you're asking what if employees were given a reasonable share of the business? Well I think that's basically what xeunchen was talking about.



An employee share ownership plan (or "stock ownership", abbreviated to "ESOP") is the practice of companies giving staff members shares in their company as part of their salary.

An Employee Share Option Plan (ESOP)[1] is a defined contribution employee benefit plan that allows employees to become owners of stock in the company they work for. It is an equity based deferred compensation plan. Under the ESOP plan, companies provide their employees the opportunity to acquire the company's shares at a reduced price over a period of time.


From what I can see, the ESOP isn't really very effective. I know one business where a large number of employees have shares in the business but their pay is comparable to most other people working in the same field. In order to make it work properly all the shares would need to be distributed among employees fairly. It would mean adjustments every time an employee was lost or hired, and it would be very difficult to manage.

edit: that's why it would be much more simple to essentially use the shares to represent ownership and nothing else, and instead re-craft the way profits are handled so that employees are payed more fairly and shareholders don't soak up all the profit.
edit on 9-10-2011 by ChaoticOrder because: (no reason given)




posted on Oct, 9 2011 @ 11:06 PM
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Originally posted by xuenchen

Originally posted by beezzer

reply to post by beezzer
 


What if, as a corporation, I provided enough shares to encourage productivity in all my employess?


That would be a good example of an employee owned company.

And that can work.

And actually some big corporations are doing just this.

But it's always reserved for the high up executives.

edit on Oct-09-2011 by xuenchen because: (no reason given)

I'd have to disagree. It isn't in a corporations best interest to deny a finance stream generated by ALL levels of employees. Keeping it exclusve to just high up executives only limits the amount of capital that could be generated.



posted on Oct, 9 2011 @ 11:21 PM
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reply to post by beezzer
 



I'd have to disagree. It isn't in a corporations best interest to deny a finance stream generated by ALL levels of employees. Keeping it exclusve to just high up executives only limits the amount of capital that could be generated.


Of course that is true,

but many big companies either don't understand or simply don't care.
or have a different agenda however complicated it may be.

The ESOP plans include everybody, but are fixed from the start and don't allow adjustments for things that CO points out.

3 or 5 years down the road can change the outcome.

If an employee quits prior to the vesting, their awarded shares disappear and are never exercised.

And of course if the share price is lower at time of vesting (and up to expiration), nobody gets a dime (no liability either).

A true working system goes back to CO's original plan.

The flow of compensation needs to be steady and timely to be truely effective.

edit on Oct-10-2011 by xuenchen because:

edit on Oct-10-2011 by xuenchen because: re




posted on Dec, 6 2013 @ 10:44 AM
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ChaoticOrder
No interest from anyone? Well I'm off to sleep then.


I'll check back later folks.


Yes I like your idea but there is a simpler way, just add a line to the global corporate by laws that states all corporations must make a positive impact on humans in the company and the community, and the CEO is directly responsible for any wrong doing of the corporate entity.





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