In response, employers have adopted many creative incentive programs, such as casual Fridays, flextime, and telecommuting. But among recruiting incentives, stock options are considered by many to be the jewel in the crown. Although stock options were once traditionally reserved for executives, more and more companies are implementing broad-based programs that offer options to professional and administrative employees alike. Companies offer options for a variety of reasons. For startups, stock options represent a way to attract key talent without draining venture capital.
Larger companies use options as a competitive edge in recruiting and retaining employees.
Creating an Ownership Culture One motivation for offering employee stock options is to foster an ownership culture within a company. NCEO Director Corey Rosen believes stock options help employees see how their companies' success has a direct impact on their personal prosperity, resulting in greater productivity. Rosen also says that as companies combine employee ownership programs with increased employee participation in management issues, workers are increasingly likely to invest more time and energy in their companies' success. While stock options can be a valuable component of a competitive compensation package, they aren't necessarily the most important factor in attracting and retaining quality employees. The truth is, compensation gets your foot in the door as an employer.