The practice of encouraging employees to become stockholders of their employing company has become more and more popular in the Globally.
Governments and companies can encourage the development of employee stock ownership, respectively, through tax incentives and by setting up schemes allowing employees to purchase stock at a discounted price. These favorable conditions are costly for governments and companies, and the main reason for their adoption is the widespread belief that linking employee compensation to company performance gives employees an incentive to work better and harder, thereby enhancing their productivity and ultimately improving corporate performance .In fact, argues that employee ownership (EO) leads to free-rider problems, reduces management power, and is costly in terms of implementation.