Newcourt Credit Group: A case study of employee owndership

TitleNewcourt Credit Group: A case study of employee owndership
Publication TypeThesis
Year of Publication2003
AuthorsRankin WD
AdvisorSchugurensky D
Academic DepartmentEducation
DegreeDoctor of Education Ed. D.
Number of Pages181
UniversityUniversity of Toronto (Canada)
CityToronto, ON
Accession NumberAAT NQ78284
Abstract

This study examines the history of Newcourt Credit Group, particularly its employee share ownership programs. Newcourt was a significant Canadian leasing corporation, particularly during the years from 1994 to 1999, when it grew from 143 employees to over 6,000 dispersed in more than 25 countries. The heart of the firms human resources and compensation program was founder and Chief Executive Officer Steven Hudsons wealth creation programs, wherein all staff might share in the financial successes of the firm, and to some degree be exposed to the vagaries of the stock market. Hudson wanted to accomplish this goal through a number of employee share ownership programs aimed at four different levels in the organization: the three founders, the executive group, the managers and the remainder of the employee population.The overall goal of this research was to understand how different levels of the organization relate to the ownership plans introduced by the firm. Specifically, it explored how different perceptions are coloured by their stake in the company, the performance of that stake, and their degree of participation in management. In addition, it examined the role of communications as related to the employee share ownership programs.The research was conducted through a series of focus groups and individual interviews with the four different population groups.The study reveals the value of these programs to some publicly owned corporations. It shows the necessity of explaining to all employees how the various share ownership programs work, and in particular, the risks associated with these financial instruments. The dissertation illustrates that different programs appeal to unique segments of the employee population, and that some groups are more risk averse than others either through choice or necessity. The work also concludes that the share ownership plans must be amended from time to time to meet the changes in the organization as it grows and matures. It confirms the necessity of having all levels share in decisions that may impact them, by providing input and/or their reactions. Finally, the work shows the importance of continuous communications relative to the plans themselves, the health of the corporation and its mission, vision and values. Key to this success is the chief executive officer and the executive team who lead by example.

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