Abstract:

This research is an exploratory experimental study conducted among the library faculty and staff at the Medgar Evers College of the City University of New York (CUNY). This research shows perceptions of the Employer’s stock options (ESOs) by the library faculty and staff. CUNY is a public institution, that would be unlikely issuing the ESOs, but many of the CUNY library faculty and staff are aware of the instrument and were quite enthusiastic about describing their perceptions related to the applications of such an instrument in an organization. Additionally, ESOs are often a part of the reference interview content in the academic library environment. Employer’s stock options are a financial incentive that significantly influences organizational behavior (Macsai, 2007). This financial instrument remains a powerful tool for building employee loyalty despite Enron disaster and the significant policy changes by the Financial Accounting Standards Board (FASB), requiring tougher control on the organization’s financial reports (Cortese-Danile, 2013; Spalt, 2013; Dunford, et al., 2008; Marlor, 2007; 401(k) Advisor, 2006). Initially, stock options were used to motivate upper management and key experts, resulting in high-variance bets that brought more losses rather than gains (Sanders & Hambrick, 2007). Albeit, we must admit that managerial opportunism (Isagawa, 2007) might sometimes be beneficial for the organization. Subsequently, this financial derivative emanated into the masses and because of that move became very prevalent (Udell, 2008), and possibly more efficient. The power of the affect that options have on the employees was also noted abroad, and as a result this powerful tool was adopted in some foreign economies, including Germany and India (Sanders & Tuschke, 2007; Carberry, 2007). According to the survey conducted amongst the MEC/CUNY Library faculty and staff, 53.9% of the respondents think that it is a good idea to give options of the employer to the employees. A qualitative comment indicated that it “motivates the employees to work hard”. (This survey was offered online to the faculty and staff of an academic library by means of SurveyMonkey.com and included 13 respondents. SurveyMonkey served as a kind of randomizing instrument. The survey was absolutely anonymous, and the respondents were the people who volunteered to respond. This survey was piloted with one of the library faculty. The survey can be accessed at http://www.surveymonkey.com/s.aspx?sm=M8icM_2b8ritfSkItk8TirNw_3d_3d. An opposing comment suggested that employer’s options might induce unnecessary pressure. Only 30.8% agreed (and another 30.8% were undecided) that ESOs motivate people to work better. One of the respondents noted that “employee motivation can be a mystery”. Some 53.8% strongly disagreed, 23.1% disagreed, and 15.4% were undecided that the ESOs should be given to upper management and key experts only. “They should not get special perks” commented one of the respondents. Here we see that despite the doubts on the effectiveness of the ESOs respondents think that the distribution should still be done in egalitarian style. The findings of this research might indicate that ESOs might be a powerful tool to influence the organizational behavior, possibly including some academic and library environments.

Keywords:

Academic librarians, ESO, employee stock options, organizational behaviour, financial incentive.