The theoretical and empirical linkages between employee ownership and performance are reviewed. In response to the inconsistent and inconclusive findings of a simple ownership-performance relationship, the authors revisit the conceptualization of ownership and ask how does ownership produce its performance effects. The study offers a “psychology of ownership” perspective on employee ownership, suggesting that ownership be thought of as a dual creation—part an objective and part a psychological state. In response to the question “how” does ownership produce its performance effects, a detailed model is presented that depicts a within-individual, self-esteem-based motivational effect explanation for the ownership-performance relationship.
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