In this Issue:

• In the News

• Upcoming Events

• How Pizzagalli became 100% Owned

• What Employees Really Think of their Employers

Vermont Employee 
Ownership Center
P.O. Box 546
Burlington, VT 05402
Phone: 802-861-6611
Email: info@veoc.org
Website: www.veoc.org

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How Pizzagalli Construction Became 100% Employee-Owned

by Jennifer Higgs



With a culture of employee ownership already embedded in the organization, Pizzagalli Construction Company recently became 100% employee owned. The transition to a 100% employee stock ownership plan (ESOP) began in 2002, when the founding Pizzagalli brothers decided to transition ownership to the people who participated in the growth and success of the company.

Mike Sessions, senior vice-president, says the founders wanted to see the culture of the company remain and those who helped build it thrive. “A lot of the employee ownership culture was already in the company,” he says, noting ideas such as everyone is a leader and makes a difference previously existed in the organization.

“The ESOP just seemed to make sense as a way to transition ownership from the founders to the employees as a way to maintain the culture of the company,” he says.

The South Burlington, Vermont-based company had already established a 30% ESOP. Through a leveraged buyout, the ESOP purchased 50% from the two brothers in 2007. The remaining 20% of shares held by executives was also purchased, making the company 100% employee owned in April 2009.

A portion of the ESOP is distributed to employees annually based on salary. Every quarter employees receive a statement showing how much is in their ESOP account and how much it has appreciated. Sessions notes many people are looking at their accounts and their ESOP is surpassing what is in their 401(k) plan, and they want to ensure it keeps increasing.

Because an ESOP gives employees an equity position in the company, the value of the stock is a direct result of the employee’s contributions and efforts, says Sessions, adding distributed leadership and decision-making has been in the company for a long time.

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By Martin Staubus

“Dear John, I know you want me – I know you need me, but sorry, but the chemistry just isn’t there.”

According to a recent survey conducted by Aon Consulting, that’s the message most employees have for their employers. They’re just not that into you. Less than one-third of employees are “engaged” in their work, and two in five would not recommend their company to a friend as a place to work.

The term “employee engagement” has been a leading buzz phrase in human resource circles for several years now.  Its meaning is a bit fuzzy, but the commentary certainly suggests that, whatever it is, it’s a very good thing and employers should aspire to it. To get some clarity, The Conference Board took on the subject, leading to a formal report published in 2006 entitled “Employee Engagement, A Review of Current Research and Its Implications.”  It turns out that each preceding employee engagement research study had defined the term differently and, as a result, had identified different drivers and different implications.  Having digested and synthesized the results of 12 major studies on the subject, The Conference Board settled on its own definition of employee engagement: “a heightened emotional connection that an employee feels for his or her organization that influences him or her to exert greater discretionary effort to his or her work.”

What they are talking about is attitude – emotional orientation.  Engaged employees are those who display the right kind of attitude in the workplace.  But what sort of attitude – and about what, exactly?  Some seem to focus on the employee’s attitude towards the company; others seem to focus on the employee’s attitude about his work. Is an employee engaged if he thinks the company is a wonderful organization, run by benevolent managers who pay him extremely well, but that the work he has been assigned is trivial and boring? How about the inverse: an employee who is doing important work that inspires him, but he pursues that work for an organization that he holds in contempt, run by venal managers? 

Not surprisingly, the various studies that The Conference Board reviewed collectively came up with no fewer than 26 “key drivers” of employee engagement.  This has left employers implementing random tricks and tactics in an effort to boost engagement.  How about a game room so employees will enjoy being at work?  A recent edition of Workspan magazine touted charitable giving by the company as a way to get employees to feel positively about their employer and thus engaged.  Employee of the month awards?   Sensitivity training for supervisors?  No wonder the Aon survey found that less than a third of employees are engaged – whatever that is.

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