Abstract: Equity-based employee rewards are rare in small andmedium-sized enterprises (SMEs) in the United Kingdom.The most popularforms of employee share ownership (ESO) schemes are outlined, and the dearth ofsuch share schemes in small businesses is attributed to twofactors.First, share ownership incentives are less relevant in smallfirms than in larger firms, and the direct, personal control of tasks thatcharacterizes many small businesses diminishes the need for ESOschemes.Second, the nature of the small business presents obstacles toshare ownership.These obstacles arise from the finance and ownershipstructures of SMEs, the people management approaches taken by most SMEs, andthe implications of share ownership for management and control. While ESO schemes are certainly rare in SMEs, four situations lendthemselves to the use of share schemes.These situations includemanagement buy-outs, dot-coms and other new economy firms, exits(such as retirements), and firms experiencing difficulty in recruiting andretaining personnel.Although the government has introduced measuresencouraging SMEs to participate in ESO schemes, share ownership will likelyremain uncommon among SMEs. (SAA)
Publication Year: 2003
Publication Date: 2003-01-01
Language: en
Type: article
Access and Citation
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot