chapter  25
10 Pages

Financial participation

WithAndrew Pendleton

The idea of rewarding labour in a manner usually associated with returns to capital is examined in its different variants, with employee financial participation being viewed as complementing employee involvement in corporate decision-making. Including international comparisons and discussion of the theoretical explanations for who does it, where and why, the analysis considers the relationships between financial participation and other forms of employee reward. While cautioning around the risk of reverse causality when examining links between financial participation and performance, it is shown that providing employees with a tangible stake in the business can be associated with enhanced employee attitudes and behaviour which, in turn, can have beneficial HR and organizational performance outcomes.