CIPD issues new guide to employee share ownership

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CIPD issues new guide to employee share ownership

An estimated one in five UK workplaces operates an employee share ownership plan. The Chartered Institute of Personnel and Development has recently updated one of its factsheets examining employee share schemes, providing a useful insight into this complex subject.

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This factsheet gives introductory guidance. It:

• gives details of currently available employee share schemes approved by HM Revenue & Customs: Share Incentive Plan (SIP); Savings-related schemes - also known as Save-as-you-earn (SAYE) schemes or ShareSave; Enterprise Management Incentives (EMI); Company share option plans (CSOPs)
• outlines details of the many unapproved schemes that currently exist: unapproved options; restricted or performance share plans; co-investment/deferred bonus plan; share appreciation rights (SAR) plan; phantom share plans
• considers reasons for introducing an employee share scheme and examines the steps organisation must take before introducing a scheme
• assesses the pros and cons of employee share schemes – from the perspectives of both employers and employees
• gives details of organisations and publications providing further information
• includes the CIPD viewpoint.

A final word

The CIPD concludes with its own viewpoint on the subject stating that:

“Although employee share schemes have become an increasingly common and prominent part of the reward package, opinion is divided on how valuable they are in assisting organisations to reach their objectives, particularly in driving up performance. It is clear that employee share schemes, like any reward practice, need careful implementation and must be aligned with broader business objectives and with the organisation’s culture if they are to succeed.”

Want to know more?

Title: Employee share ownership: Factsheet, Chartered Institute of Personnel and Development, (revised) August 2008.

Availability: To download the factsheet, go to www.cipd.co.uk/onlineinfodocuments/factsheets.htm.

The Chartered Institute of Personnel and Development (CIPD) has more than 130,000 members and is the leading professional institute for those involved in the management and development of people. To find out more visit www.cipd.co.uk.