The process yielded 343 ESOP companies and 343 pairs for the overall sample. The relative growth numbers might seem small at first glance, but projected out over 10 years, an ESOP company with these differentials would be a third larger than its paired non-ESOP match. When the companies were divided into three groups based on how participatively managed they were, however, only the most participative companies showed a gain. Participation alone, however, is not enough to improve performance. A large number of studies show that the impact of participation absent ownership is short-lived or ambiguous.
Ownership seems to provide the cultural glue to keep participation going.
The New York and Washington Studies Economist Gorm Winther and colleagues in New York and Washington State followed up the NCEO study, using the same research design but different samples, one of 25 employee ownership firms in New York State and one of 28 employee ownership companies in Washington State. In both studies, employee ownership per se had little or no impact on corporate performance, but a substantial impact when combined with participative management. The New York results used correlations and cannot be compared directly, but the results were in the same direction. In Washington, majority employee-owned firms that were participatively managed did even better. The Washington study also found that the synergistic effect of ownership and participation was not diminished even when the control group companies had no employee ownership, but had profit sharing and participation programs.