Chobani CEO Hamdi Ulukaya made a big splash last year by giving 10 percent of his company to employees — to the tune of roughly $150,000 per staffer. “I’ve built something I never thought would be such a success, but I cannot think of Chobani being built without all these people,” he reportedly said at the time.
This year, the private equity firm KKR did something similar with three of the industrial companies it bought, one of which, Gardner Denver, just went public. Employees got $100 million worth of stock. Pete Stavros, the KKR partner who made this happen, told the Milwaukee Journal Sentinel that to improve operations, “you need the engagement of frontline employees … by making them owners.”
Uber, are you listening? You could drive your business to the next level and set aside negative publicity in one fell swoop: by making your drivers owners.
Ulukaya and Stavros are just two of the thousands of business leaders in the U.S. who have come to the conclusion that sharing ownership with employees is good for business. Research by scholars at the National Bureau for Economic Research, Rutgers University, the University of North Carolina and other institutions has found that companies that share ownership with employees significantly outperform their rivals in terms of growth, productivity, return on investment, turnover and layoffs. And it’s especially true for companies that also set up systems to get employees more involved in making decisions about how their jobs are performed. In short, these firms have found that treating employees as valuable partners is good for staffers and investors.
For employees participating in these plans, data for the National Center for Employee Ownership shows that not only do they accumulate more assets, but they also have higher incomes and access to other benefits, both because companies that believe in this concept believe in treating people well but also because the companies make more money and can afford it. But even if all Uber drivers get is a stake in the action, that can be a meaningful addition to the normal compensation system.