Financial Participation


The data source for this project is a multi-country data set on human resources management practices, known as CRANET. Coordinated at Cranfield School of Management in the UK, these data have been collected by academic teams in each of the constituent countries. Although the Cranet data was not primarily designed to investigate the incidence and characteristics of financial participation, the presence of questions on this topic makes it an ideal source of information for this project.


In July 1992 the Council of Ministers adopted a Recommendation concerning the promotion of participation by employed persons in profits and enterprise results known as the PEPPER recommendation. In the process of preparing this Community instrument the Commission funded a research project with the specific aim of obtaining a good overview of 'the state of the art' concerning financial participation by employees in the EU. The results of this project were described in the so-called PEPPER I Report. The Recommendation of July 1992 was largely based on this report. The Recommendation invited the Member States to acknowledge the benefits of a wider use of schemes to increase the participation of employed persons in profits and enterprise results by means of profit-sharing, employee share-ownership or a combination of both, taking into account the responsibilities of the social partners. In the Council Recommendation, the Commission undertook to present a report to the European Parliament, the Council and the Economic and Social Committee on the application of the recommendation. On the basis of the information supplied to it by the Member States, the Commission adopted the so called PEPPER II report in January 1997.

One of the main conclusions of the PEPPER II report is that Member States have hardly, if at all, engaged in information exchanges regarding best practices, despite the potential positive effects of financial participation schemes on productivity, wage flexibility, employment and worker involvement.