Zhengfei Ren, as the founder and president of HUAWEI Technologies Co, Ltd, was thought to be the owner and largest shareholder of the company by many people includes me, however, the truth is he only takes 1.4% shares of company’s total, with the rests shared by his 82,471 employees. World’s third smart phone manufacturer is indeed not a public company!

In chapter 5 Motivation in Action, we’ve learned this type of payment method, it’s called Employee stock ownership plans and this focus on emphasizing attention to organizational goals. Not many companies adopt such a way to motivate their employees though, usually there is only a few people in an organization getting really rich with rest of people undertake most of work. However, the example of HUAWEI does prove that this is a very effective way to encourage and motivate its labor.

HUAWEI is famous for its Hard-charging workplace charging culture, for every new employee, they are given a blanket and a mattress because they would work late into night and sleep in the office, I have a sister works there and she proved that. For a doubled workload and high-pressured job, one of the reason why employees still want to keep their jobs is related to this ESOP payment system. As we known, HUAWEI is a very profitable and successful company, the dividend each year would be considerable not to mention their salary. Income is especially important for people who live in SHENGZHEN, city where HUAWEI locates since the price level and housing price are top in CHINA. In addition, the ownership of certain amount of shares make each employee feel more responsible and motivated for company, thus, they tend to become more committed and dedicated. Therefore, although we may think those highly educated people would care a lot about the intrinsic motivator or higher level of needs, we need to analyze the specific condition. Here in HUAWEI, the good publicity and good income makes a very decent job.

Nevertheless, whether HUAWEI actually belongs to those employees who own shares are still worth discussing. The share owner staff is hard to take part in the major decision making since so many shares are issued and they are only a small percentage of company. This will result in the reduction in employee’s motivaion. Also, many people hold the view that HUAWEI has a government background, therefore, most of decision making rights are still in management people’s hand, ang HUAWEI doesn’t necesserily need to concern much about the financial problem as the support of government, so making themself a public company to raise capital is not required.

To conclude, ESOP can be just suitable for HUAWEI while for other companies it can be inappropriate.

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References:

https://hbr.org/2015/06/huaweis-culture-is-the-key-to-its-success

http://www.employeeownership.com.au/employee-ownership/the-advantages-and-disadvantage/