What is Employee Stock Ownership Plan (ESOP) in HRM?

Learn Employee Stock Ownership Plan (ESOP) definition in hrm with explanation to study “What is Employee Stock Ownership Plan (ESOP)”. Study employee stock ownership plan (esop) explanation with HRM terms to review HRM course for online MBA programs.

Employee Stock Ownership Plan (ESOP) Definition

  • Plan whereby employees have significant stock ownership in their employers.

    Human Resource Management by Robert L. Mathis, John H. Jackson



Employee Stock Ownership Plan (ESOP) Explanation

Employee stock ownership plan (ESOP) is a representative advantage plan that furnishes an organization's laborers with a proprietorship enthusiasm for the organization. It is likewise now and then alluded to as a Stock Purchase Plan. ESOPs can be gainful to workers and the organization, yet there are a few disadvantages related with them too. (The greatest one: a potential over-interest in the organization to the detriment of a various retirement portfolio.) Employee stock proprietorship plans are intended to expand worker interest in positive results for the association. All things considered, on the off chance that a worker claims stock in the organization, at that point they will probably feel inspired for the organization to succeed and for the company's stock an incentive to increment. Too, workers who possess stock in the organization have a motivating force to stay at the organization, which could diminish representative turnover.

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