Employee participation in the wealth of mining companies : an employee share ownership participation scheme focus

M.B.A.The importance of a free market in a post apartheid South Africa has been acknowledged. The benefits should be spread so that all individuals may be able to share in the wealth generated by the people within the country. Privatization is one mechanism for redistributing the wealth of the State, and the use of an Employee Share Ownership Participation Scheme (E.S.O.P.S.) is away in which the wealth can be spread over a large proportion of the population. This was a basic policy of Thatcher's Government in the U.K. The same rationale is apt for the South African situation. An E.S.O.P.S. is similar to a profit sharing or a pension plan, and may be group with various holistic empowerment strategies. There are however two fundamental differences from these two traditional plans: • It invests only in the equity of the employer • The E.S.O.P.S. provides the organization with an increased finance tool, through an increased ability to borrow. One of the business trends, in the U.S.A. and the U.K. and more recently in South Africa has been to extend the ownership of shares to employees. This secures a stake in the company, an avenue for retiring owners, and as protection against hostile takeover bids. Other motives that have been used are, as an educational experience and also as a part of participative management philosophy. The author heads the Department of Mining Engineering in the new University of Johannesburg, Faculty of Engineering and the Built..