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Impact of Employee Ownership on Organizational Performance: A Mediating Role of Employee Satisfaction

The onus of employee ownership towards organizational performance is growing among researchers and practitioners. This study examines the relationship between employee ownership and organizational performance, which is categorized in two segments; financial performance and productivity. Where, employee satisfaction has been identified as mediator of the relationship. Financial performance is measured through profitability ratios, and productivity is measured through average nominal productivity per person. The positive impact of employee ownership is reward for employees in financial terms, and right to participate in the decision making. Employees appraise, and feel contempt with the objects which belong to them. As most of the existing studies are based on developed countries, so this study is organized distinctively about the contribution of employee ownership in the developing countries like Pakistan, because this area has never been explored, therefore, this study is unique and one of its kind. The study proposes that employee ownership positively impacts organizational performance, and work satisfaction mediates the relationship. Therefore, it can be argued confidently that insertion of employee ownership scheme in macroeconomic policies will also help to reduce the free rider problem and eventually will add to national productivity.