The Influence of Managerial Ownership on Bank Market Value,Performance, and Risk: Evidence from Banks Listed on the Stoxx Global Index

We follow agency theory to assess the influence of managerial ownership on the market value, performance, and risk of 123 listed banks in 23 countries included in the STOXX Global Index in 2007 and 2010. After controlling for bank characteristics, regulatory restrictions, and macroeconomic conditions, our findings show a positive relation between managerial ownership and both market value (Tobin's Q) and performance (ROA and ROE). Moreover, we find a negative relation between managerial ownership and risk (EDF, NPL/L, and Z‐SCORE). Bank market value and performance is a non‐linear, inverse U‐shaped function of managerial ownership. The negative relation between managerial ownership and bank risk is also non‐linear and U‐shaped. Our results remain robust to reverse causality. In their effort to immunize the global financial system from systemic risks, central banks and practitioners should find our results relevant for regulation purposes.     

Well‐being‐oriented human resource management practices and employee performance in the Chinese banking sector: The role of social climate and resilience

Drawing upon positive psychology and a social relational perspective, this article examines the relationship between well‐being‐oriented human resource management (HRM) practices and employee performance. Our multilevel model examines relationships among collectively experienced well‐being‐oriented HRM practices, social climate (characterized by trust, cooperation, and shared codes and language that exist among individuals within the organization), employee resilience, and employee (in‐role) performance. Based on the two‐wave data obtained from 561 employees and their managers within 62 bank branches in 16 Chinese banks, our multilevel analyses provide support for our four hypotheses. First, we found a positive relationship between well‐being‐oriented HRM practices and social climate. Second, social climate mediated the relationship between well‐being‐oriented HRM practices and employee resilience. Third, we found a positive relationship between resilience and employee performance. Finally, employee resilience mediated the relationship between social climate and employee performance. This study is one of the first to unpack the social mechanisms through which well‐being‐oriented HRM practices increase development of resilience and subsequent employee performance at the workplace, namely through influencing group feelings of social climate.     

Does the use of stock incentives influence the payout policy of financial institutions?

We investigate the link between payouts and stock incentives among financial institutions. We hypothesize that the varying degree of regulation across depositories, insurers, and securities firms is likely to influence the observed relation to the extent that regulation substitutes for other monitoring mechanisms. We find that managerial stock ownership is inversely related to dividend payouts across the institutions, consistent with the notion that managerial stock ownership is an effective method of reducing agency problems. We do not find evidence that the relationship occurs because of regulation since all institutions, regardless of the degree of regulation, exhibit the same inverse relationship between dividend payouts and management stock ownership. Our results suggest that, among financial institutions, regulation complements managerial stock ownership in minimizing agency problems.     

Employee ownership and firm performance: a meta‐analysis

Employee ownership has been an area of significant practitioner and academic interest for the past four decades. Yet, empirical results on the relationship between employee ownership and firm performance remain mixed. To aggregate findings and provide potential direction for future theoretical development, we conducted a meta‐analysis of 102 samples representing 56,984 firms. Employee ownership has a small, but positive and statistically significant relation to firm performance ( = 0.04). The effect is generally positive for studies with different sampling designs (samples assessing change in performance pre‐employee–post‐employee ownership adoption or samples on firms with employee ownership), different performance operationalisation (efficiency or growth) and firm type (publicly held or privately held). Suggesting benefits of employee ownership in a variety of contexts, we found no differences in effects on performance in publicly held versus privately held firms, stock or stock option‐based ownership plans or differences in effects across different firm sizes (i.e. number of employees). We do find that the effect of employee ownership on performance has increased in studies over time and that studies with samples from outside the USA report stronger effects than those within. We also find little to no evidence of publication bias.     

Does contingent pay encourage positive employee attitudes and intensify work?

This article explores the relationships between three dimensions of contingent pay – performance‐related pay, profit‐related pay and employee share‐ownership – and positive employee attitudes (job satisfaction, employee commitment and trust in management). The article also examines a conflicting argument that contingent pay may intensify work, and this can detract from its positive impact on employee attitudes. Of the three contingent pay dimensions, only performance‐related pay had direct positive relationships with all three employee attitudes. Profit‐related pay and employee share‐ownership had a mix of negative and no significant direct relationships with employee attitudes, but profit‐related pay showed U‐shaped curvilinear relationships with all three employee attitudes. The results also indicated that performance‐related pay is associated with work intensification, and this offsets some of its positive impact on employee attitudes.     

Friend or foe? Employee ownership and CEO dismissal

This paper examines 2 research questions. First, does the level of employee stock ownership impact the likelihood of dismissing poorly performing chief executive officers (CEOs)? Second, does the level of employee stock ownership affect the likelihood of appointing an outsider or an insider after the dismissal of an incumbent CEO? We suggest that employee stock ownership reinforces the firm performance—CEO dismissal link because employee shareholders' welfare consisting of fixed claims (wages, bonuses, etc.), residual claims (dividends, increase in stock value, etc.), and human capital (generic and idiosyncratic) are highly linked to their firm performance. Moreover, under conditions of poor performance, employee shareholders are likely to favor an outsider CEO because he or she is more likely to initiate and implement drastic changes to the strategy of the firm, and therefore, he or she is more likely to improve firm performance. Drawing on a longitudinal sample of French firms, we find that employee stock ownership strengthens the negative relationship between firm performance and CEO dismissal likelihood. We find also that the higher employee ownership, the more likely that the underperforming CEO is replaced by an outsider. In contrast, employee ownership has no moderating impact on the likelihood of insider CEO appointment.     

All for one and one for all: A mechanism through which broad‐based employee stock ownership and employee‐perceived involvement practice create a productive workforce

Drawing on social identity theory, this research frames a multimediational model that delineates how broad‐based employee stock ownership (BESO) and employee‐perceived involvement practice in tandem yield a productive workforce at the organization level. In our theoretical model, we propose that social cohesion and voluntary turnover are collective attitudinal and behavioral outcomes resulting from the shared perception of we‐ness that employees experience through both participatory practices. Our path analysis of a multisource, time‐lagged dataset from 176 large U.S. companies revealed the sequential mediating roles of social cohesion and voluntary turnover between these organizational practices and labor productivity. Our theoretical claims and empirical evidence will contribute to a systematic understanding of how and why BESO and employee involvement leverage greater organizational productivity from employees.     

Financial participation and performance in Europe

This article assesses whether financial participation (profit‐sharing and employee share ownership plans) is associated with positive performance outcomes, and whether direct and indirect employee participation complement financial participation in this respect. It also examines whether employee involvement in the design of financial participation afects performance outcomes. The article uses data from a survey of listed firms in Finland, Germany, the Netherlands and the UK. Several outcome measures are used, based on respondents' assessments of the effects of financial participation. Higher participation in equity‐based plans, but not in profit‐sharing, is found to be associated with more successfil outcomes. None of fhe other forms of employe? pnrticipafion uins found to contribute to the success of financial participation. The results therefore cast some doubt on complementarity between financial and other forms of participation.     

Environmental and Firm Level Influences on Inter‐Organizational Trust and SME Performance

We investigate the effects of focal firm knowledge intensity and uncertainty on inter‐organizational trust and subsequent performance of small and medium size enterprises (SMEs). We integrate the trust literature with transaction cost literature as both of these offer partial explanations of the dynamics of inter‐organizational trust in the context of an SME. We propose that knowledge intensity of the focal firm will have a positive relationship while uncertainty will have a negative relationship with inter‐organizational trust in an exchange relationship. Further, we propose a positive relationship between trust and SME performance, which will be contingent on the level of external and internal uncertainty faced by the focal firm. Empirical evidence, based on the survey data of 565 German SMEs, mostly supports our arguments.     

Social trust environment and firm tax avoidance: Evidence from China

We examine the impact of the social trust environment in which a firm is located on its tax avoidance in China and paying attention to the moderating effect of corporate governance and state-ownership. Drawing from theoretical and empirical work on firm tax avoidance and manager–shareholder agency conflict, we hypothesize that social trust can lower firm tax avoidance. It is because a high social trust environment can reduce agency conflict so that tax avoidance is less. Our findings are consistent with our hypothesis, and robust to a battery of robustness tests. Furthermore, we document that the association between social trust and firm tax avoidance is more pronounced for firms with weak corporate governance and state-owned. Moreover, we find that firms in more trustworthy provinces present less general and administrative expenses and higher asset turnover, corroborating our theoretical foundations with respect to agency cost in our hypothesis. Our findings suggest that social trust and its interactions with corporate governance and state ownership are important internal and external determinants on the variations in tax avoidance.     

Understanding Employees’ Perceptions of Human Resource Practices: Effects of Demographic Dissimilarity to Managers and Coworkers

Strategic HRM researchers have increasingly adopted an employee perspective to understand the influence of HR practices on employee outcomes and have called for studies to explain variability in employees’ perceptions of HR practices. To address this research need, we used the social information processing perspective to examine the contextual influence of managers and coworkers on employees’ perceptions of HR practices and explore demographic dissimilarities as boundary conditions of the contextual influence. Conducting research in two organizational settings, we found that both manager‐perceived and coworker‐perceived HR practices were positively related to employees’ perceptions of HR practices. The results also revealed that employee demographic dissimilarity to coworkers in terms of age and organizational tenure weakened the positive relationship between coworker‐perceived and employee‐perceived HR practices. However, the relationship between manager‐perceived and employee‐perceived HR practices was not influenced by demographic dissimilarities. © 2015 Wiley Periodicals, Inc.     

Trust in management: the role of employee voice arrangements and perceived managerial opposition to unions

This study examines the relationship between employee voice arrangements and employees' trust in management using data from the 2007 Australian Worker Representation and Participation Survey of 1,022 employees. Drawing on social exchange theory and employee relations literature, we test hypotheses concerning the relationships between direct and union voice arrangements, perceived managerial opposition to unions and employees' trust in management. Consistent with our predictions, after controlling for a range of personal, job and workplace characteristics, regression analyses indicated that direct voice arrangements were positively related to employees' trust in management. Union voice arrangements and perceived managerial opposition to unions were negatively related to trust in management. The article concludes by highlighting the study's implications for management practice and avenues for further research.     

Strategic human resource management,firm performance,and employee relations climate in China

We examined strategic human resource management (SHRM) and human resource practices in the People's Republic of China to assess the impact of these practices on firm performance and the employee relations climate. We also tested whether firm ownership moderates the above relationships. Empirical results from a sample of Chinese firms from various industries and regions showed that the levels of adoption of SHRM and HR practices were lower in state‐owned enterprises (SOEs) than in foreign‐invested enterprises (FIEs) and privately owned enterprises (POEs). Both SHRM and HR practices were found to have direct and positive effects on financial performance, operational performance, and the employee relations climate. However, the moderating effect of ownership type was significant for financial performance only. © 2008 Wiley Periodicals, Inc.     

Organizational flexibility in Korean companies: rules and procedures on managerial discretion and employee behaviour

This paper examines organizational flexibility in Korea by concentrating on the rules and procedures on managerial and employee behaviours (safeguard and control rules), and their association with size, ownership, strategy and performance. The data reported were collected from forty-five organizations in South Korea. The results showed that flexibility in terms of low control rules (rules on employees) relates to innovation strategies, and lack of flexibility (high control rules) relates to cost-reduction strategies. The results also show that in Korea, a 'fit' between this aspect of organizational flexibility and strategy had a positive impact on organizational performance. Rules on managerial behaviour (safeguard rules) were strongly related to family or individual ownership in the Korean context. The implications of 'congruence' between organizational strategy and presence/absence of flexibility for employee behaviour are discussed.     

The Effect of Family Ownership on Different Dimensions of Corporate Social Responsibility: Evidence from Large US Firms

Previous research has shown that family firms differ from non‐family firms with regard to aggregate measures of corporate social responsibility (CSR). We argue that CSR is a multidimensional concept that comprises several aspects, which range from employee relations to ecological concerns and product issues. Based on an organizational and family identity perspective, we argue that the effect of family ownership can differ across various CSR dimensions. Family firms can be responsible and irresponsible regarding CSR at the same time. We use a dataset of large US firms to test our hypotheses. Our Bayesian regressions show that family ownership is negatively associated with community‐related CSR performance and positively associated with diversity‐, employee‐, environment‐ and product‐related aspects of CSR. The largest positive effect of family ownership on CSR performance exists with regard to product‐related aspects of CSR. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment     

Understanding employee preferences for investing in employer stock: evidence from France

In this article, we broaden the focus of existing research on employee stock purchase plans by analysing employee preferences for investing in employer stock as a construct distinct from actual investment behaviour. In our analysis of original survey data in a sample of 900 employees in four French companies, we find that employee preferences are influenced by two common cognitive heuristics (representativeness and familiarity), organisational commitment, the perceived quality of corporate communications about these plans and perceived managerial commitment to employee ownership. We did not find, however, that risk aversion, turnover intentions or perceived employee involvement in decision making influenced preferences for investing in employer stock. Our findings have both theoretical and practical implications for understanding and operating these types of employee benefit plans, which are becoming more common across the globe.     

Worker voice,managerial response and labour productivity: an empirical investigation

This article investigates the relationship between worker voice practices, employee perceptions of managerial responsiveness and labour productivity. It argues that managerial responsiveness is a critical but under‐investigated variable in the study of the relationship between worker voice, human resource management and performance. Our results suggest that managerial responsiveness to worker voice does lead to superior labour productivity. However, this relationship is only found in non‐union workplaces and there is little relationship between formal voice regime and productivity. One important implication of this finding is that more responsive management will result in improved productivity, so policy interventions should focus on how to motivate managers to become more responsive to their employees.     

Psychological Ownership: How Having Control Matters

The study builds a cross‐level work process control‐based model of psychological ownership in a Chinese context. We operationalize individual‐level control as participative decision‐making and unit‐level control as the self‐managing team climate. We further theorize how the value orientation of employees to power differentials moderates the mediating effects of psychological ownership on the relationship between the two levels of control and employee outcomes. We found that the positive effects of control experiences on some outcomes are mediated by psychological ownership. Additionally, power distance moderates the mediating role of psychological ownership. Our results suggest that, in order to cultivate the positive effects of perceived control on employee contributions, managers should pay attention to employees high in power distance since these individuals are reluctant to exercise control. Training or encouraging these individuals to participate in decision making may help them cultivate the positive feelings of psychological ownership.     

The link between supply chain fit and financial performance of the firm

The bottom-line financial impact of supply chain management has been of continuing interest. Building on the operations strategy literature, Fisher's (1997) conceptual framework, a survey of 259 U.S. and European manufacturing firms, and secondary financial data, we investigate the relationship between supply chain fit (i.e., strategic consistencies between the products’ supply and demand uncertainty and the underlying supply chain design) and the financial performance of the firm. The findings indicate that the higher the supply chain fit, the higher the Return on Assets (ROA) of the firm, and that firms with a negative misfit show a lower performance than firms with a positive misfit.     

How reward satisfaction affects employees’ turnover intentions and performance: an individual differences approach

We challenge the assumption that satisfaction with rewards has the same effect on the behaviour and attitudes of every employee, and hypothesise that there are individual differences in the effects of (satisfaction with) financial, material and psychological rewards on turnover intentions and task performance. Survey data from 179 employees are combined with supervisor‐rated task performance data and analysed with cluster‐wise regression analysis. As for task performance, no employee types or individual differences were found. However, we identified three different employee types revealing a unique relationship pattern between satisfaction with financial, material and psychological rewards and turnover intentions. These employee types also differed in socio‐demographic characteristics and work values. Our findings illustrate that to be able to fully understand the underlying relationship between rewards and employee outcomes, scholars need to adopt an individual difference perspective and methodology. Implications for practice, limitations and opportunities for future studies are discussed.