The development of financial participation in Europe

In this paper, we assess the development of financial participation schemes, employee share ownership and profit-sharing in selected European countries and the degree to which they are correlated with strategic human resource management, and industrial relations, that is collective bargaining, unionization and works councils, and national context. This study adds a more dynamic perspective to the literature on the incidence of financial participation by using a longitudinal approach rarely found before. Our hypotheses are based on the theoretical frameworks of strategic human resource management (HRM), industrial relations and institutional approach. We use data drawn from the waves of the Cranet surveys on Human Resource Management: 1999/2000, 2005/06, 2010/11 and 2015/16. We find that both time and national location are important. The national context matters in particularly for profit-sharing and less for employee share ownership. For both forms of financial participation, the country regulative context is also more important than industrial relations factors and HRM strategies. In general, industrial relation factors gain importance over time and become more important than the HRM strategy for employee share ownership (ESO) but not for profit-sharing (PS). In general, over the whole period, commitment HRM is more important for the incidence of ESO and PS than control HRM, but the relative importance of these strategies varies per year.