The reason for this is because by owning part of the company, every move they now take has a direct impact on their shares in the company. This will force them to be more careful and will increase overall productivity and quality. Employee shareholding is a form of financial involvement by employees in the companies which employ them. The way by which these programs work is that an employee of a company can buy stocks of the company that they are working for at a reduced price and without having to pay a brokerage fee. There is usually a time period associated with buying stock options.
Employees generally don t have stock options as soon as they are hired.
They can exercise their right after a certain time period. Larger companies rely on their compensation committees and senior executives to make management option grants while managers more often make decisions for non-management grants. Smaller companies appear to rely less on their managers to determine who will get options. One possible reason for this is that smaller companies that grant stock options make provisions in their plan documents that state who will get options or they simply grant them to all eligible employees, making management decision unnecessary. According to the Concept relationship diagram, the antecedents for benefits are, ways in which employees perceive benefits.