Prevention- and Promotion-Focused Psychological Ownership in Small Employee-Owned Firms

Psychological ownership (PO) involves believing that something belongs to oneself and acting to enhance or protect that object of ownership. The problem is that although employee-owners have the legal right of ownership, they may not exhibit PO that can enhance positive organizational behaviors and promote superior organizational results. The purpose of this quantitative study was to determine whether PO is related to employee stock ownership plans (ESOPs) and whether employment tenure is related to either promotion- or prevention-focused PO. The study was based on the theories of psychological ownership and regulatory focus. ESOPs may benefit from increased productivity and organizational progress through the development of promotion-focused PO in employees. Whether legal ownership is related to PO or employment tenure is related to either prevention- or promotion-focused PO had not been studied. Data collection involved administering the Psychological Ownership Questionnaire to a sample of small ESOP and non-ESOP companies. Data analysis involved t tests and Pearson r correlations to address the relationship between psychological and legal ownership in ESOP and non-ESOP firms, and whether promotion-focused and prevention-focused PO are related to employment tenure. Results indicated no significant difference in PO between ESOP and non-ESOP employees, but did demonstrate a significant positive correlation between employment tenure and both self-identity and overall promotion-focused PO in ESOP employees. This study has implications for positive social change by identifying factors that promote greater economic democracy for employee-owners of companies.