The Study About Huawei's ESOP's Influence On Its Employee's Behavior And Business Performance

Employee Stock Ownership Plans(ESOP)originally appeared to solve the problem of inheritance of a company,but now it has been mainly developed to solve the principal-agent problem caused by the separation of ownership and control rights in modern enterprises.Enterprises distribute part of their internal shares to employees,in order to combine the interests of employees with the interests of enterprises,and encourage managers to improve operational efficiency and corporate performance.The Employee Stock Ownership Plan(ESOP)appeared in the United States as early as the 1960 s.However,in China,ESOP has not only started late,but also been implemented mostly by listed companies due to the restrictions of laws and regulations and policy environment.According to statistics,as of December 31,2017,China has announced a total of 1154 A-share listed companies with equity incentives,excluding some financial enterprises and high-tech enterprises.Outside the technical enterprises,it is seldom involved.In this context,the paper chooses the impact of employee stock ownership on employee behavior and corporate performance as the research content.Based on the two-factor theory,human capital theory and other theories,this paper uses case studies,comparative analysis and other methods for analysis and research.Starting from the motivation of Huawei's employee stock ownership,this paper expounds the relevant background and specific process of Huawei's employee stock ownership plan.Then it evaluates the impact of employee stock ownership on employee behavior by the number of signing contracts between domestic university graduates and Huawei and the number of international patent applications of enterprises.Then it simply analyses the relationship between employee behavior and enterprise performance.Then it mainly selects the relevant data of Huawei from 2013 to 2017 to analyze enterprises vertically with financial indicators such as profitability,operating capacity,market development ability and EVA.The change of financial performance is measured by the change of market share and the number of patents,and compared with ZTE's shareholding plan and the change of corporate performance.Through the analysis,it is found that the proportion of high-level talents willing to join Huawei has increased significantly after the implementation of ESOP,the productivity of employees has increased significantly,and the performance of enterprises has increased significantly,which shows that the relevant impact of Huawei ESOP on enterprises is positive.After reviewing the literature at home and abroad,we find that although a lot of empirical studies have been done on the relationship between employee stock ownership and corporate performance at home and abroad,there is still no consistent conclusion.Taking Huawei as a successful case,this paper studies the implementation background,concrete process,scheme content and effect of employee stock ownership in Huawei,so as to draw inspiration and put forward relevant suggestions as follows:(1)pay attention to the value of human capital;(2)the design of employee stock ownership plan is reasonable,and its implementation should be strict;(3)the plan should be closely related to the change of environment.In view of the particularity of Huawei as a high-tech enterprise,we hope to provide reference for the implementation of employee stock ownership plan in high-tech enterprises.