Senator Pushes ESOPs to Reward Employees and Boost Productivity

by: Nichole Gunn November 22, 2010

The Vermont Times-Argus newspaper highlighted Senator Bernard Sanders’ belief that ESOPs are a practical way to encourage growth and revive the economy. The premise is to integrate employees and offer them ‘a stake’ in their employment.

Senator Sanders advises that “employee stock ownership plans are a way to improve morale, productivity and innovation.” He is striving to obtain more business funds and government support for this strategy.

Companies that feature employee-ownership report enhanced overall employee participation. Employees provide much more participation in decision making, are more active and involved in the daily operations, and have increased productivity, note the CEOs of some of these companies.

When employees are vested in the company they work for, when they have a stake in its success, they are motivated and engaged to produce a higher level of work and a better quality of work.

The input from the employee-owned companies benefit the company in a number of ways, including better management of ever-rising healthcare costs, explained Jeff Clark, Chroma Technology’s operations manager.

Initiating a wellness program three years ago, Chroma “has since been able to prevent healthcare costs from rising,” Clark said. The program was implemented at the request of the employee-owners.

Gaining wisdom from the Enron bankruptcy, financial consultants advise that ESOP company employees “diversify their investments so that all of their savings is not tied up in only one company.”