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Index of articles on employee participation

Ownership Culture Report: Participation

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ESOP Committee Development:
Executive Summary

This is executive summary of a seven-part article.

Published in the ESOP Committee Guide, Oakland: The National Center for Employee Ownership, 2000
by Stephen Clifford, Loren Rodgers and Christopher Mackin,
Ownership Associates, Inc., Cambridge, MA.
ISBN 0-926902-64-4
The full text is available in PDF format and as a multipart webpage.

Contents of this article:


Group Dynamics

Stage 1: "Infancy"

Stage 2: "Adolescence"

Stage 3: "Adult"

Stage 4: "Older Adult"



An ESOP Committee can add tremendous value to communication efforts and the successful growth of an effective culture of ownership. In turn, an effective culture of ownership can have a dramatic effect on company performance in ESOP companies in a variety of ways:

  • encourage employee involvement,
  • increase understanding of employees’ attitudes toward ownership,
  • contribute to a healthy ownership culture, and
  • contribute to the creation of a high performance work organization.

This article helps leaders, managers and ESOP Committee members to understand the stages of growth and difficulties many committees face. Further, it supplies guidance and direction that will help a troubled ESOP Committee back on track.


Each committee will develop in its own way according to the interests of the members and the formal responsibility and authority delegated to it. Different types of ESOP Committees will behave differently and progress in different ways:

  • ESOP Trustee Committees share a legal, fiduciary responsibility for the ESOP trust.
  • ESOP Communication Committees are often responsible for encouraging and fostering a sense of "ownership" among employees.

See the introduction for more information about these two basic types of committees and about common early issues in the development of ESOP committees. For example, one crucial decision in the early life of a committee is whether the committee is to be "advisory" or "activist."

Development Process

B.W. Tuckman gave us the four classic stages of group development: "Forming, Storming, Norming, and Performing." For the purpose of this article, we use a similar model based on human development: "Infant, Adolescent, Adult, and Older Adult." The basic characteristics of the development process, including the relationship between our model and Tuckman's, are discussed, in addition to some general tips to keep in mind for managing the process as a whole.

NOTE: It should be noted that these terms do not, in any way refer to the maturity of individual members of the group, only to the group as a whole, as a separate identity from its individual members. The four stages, described briefly below, are covered in greater depth in the full article.

  • Stage 1 is the infancy stage, or "forming" stage in Tuckman's model. Primary influence over the committee's behavior ("locus of control") is external and the "focus of concern" is internal. (See the full article for "Pitfalls and Suggestions".)
  • Stage 2 is the adolescent stage. It includes the "storming" and early "norming" stages in Tuckman's model. As individuals settle into their committee identities, they begin to struggle with each other for power and influence. (See the full article for "Pitfalls and Suggestions".)
  • Stage 3 is the adult stage. It includes most of Tuckman's "norming" stage and all of the "performing" stage. As the group settles its internal difficulties, members focus on group challenges and begin to exercise its authority. The "focus of concern" will be on external issues, and the "locus of control" will turn internal as it begins to exercise its own authority. This is when the group becomes most productive. (See the full article for "Pitfalls and Suggestions".)
  • Stage 4 is the older adult stage. It is not included in Tuckman's model. At this stage, members often become disheartened and disappointed at their perceived failures. Further, new ideas and changes may meet hostility as the group shies away from possible failure. (See the full article for "Pitfalls and Suggestions".)

Progress Through StagesEvery group will progress through these stages at its own pace. Few will follow a straight, "linear" progression. This forward and back progress may be frustrating, but it must be endured and accepted. It is the natural process the group must go through.

The group's productivity will vary throughout the process. Stage 1 may be somewhat productive; Stage 2 will not be, but will lead to a highly productive Stage 3. (In fact, the more difficult Stage 2 is, the more trust develops, and the more productive Stage 3 is likely to be!) Productivity declines in Stage 4 as the group loses focus and energy.


ESOP Committees can contribute to company success in a range of ways. They can help foster a high level of "ownership identity" among employees which is strongly correlated with high performance organizations. But ESOP Committees will not always be highly productive. However, the difficulties are worth working though as a productive ESOP Committee can help employees embrace a positive "culture of ownership." In nearly every major study, companies with a "positive culture of ownership" have been shown to out-perform their competitors.

For more information about the ESOP Committee Guide contact the National Center for Employee Ownership.

ESOP Committees: Introduction

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