I was reading an a opinion piece today about shares and the adventures of Facebook and other companies who have provided shares as part of theRe remuneration strategy. It got me thinking about my experience with issues shares with a company I was with, I forget the specifics however like most employee share schemes these shares where held on behalf of employees and were transferred to the employees after a specific time period had lapsed.
Each year I dreaded the share issue coming around, it was simply a waste of time for all involved. The shares didn’t motivate any positive behaviour such as increasing tenure (the organisation was a well respected employer, so didn’t have an issue with high turnover), it wasn’t performance based (shares allotment was determined by the individuals base remuneration the higher your salary the higher the number of shares issued), it didn’t promote any feelings of shared ownership. Simply put, whatever the shares where originally meant to reward had since become a non issue.
Share schemes certainly have a place in remuneration strategies, however I believe that there usage should be carefully considered before any such scheme becomes part of an organisations remuneration strategy. For start-up companies they certainly have the potential to assist in attracting high performing employees, who otherwise may be beyond the capital capability of a fledgling company. In the early stages of a start-up they may provide a shared sense of ownership which is useful to leverage addition hours from employees.
However outside of very specific instances, for very specific employee behavioural outcomes, I fail to see a place for share offerings in the majority of remuneration strategies within the Australasian context. For the most part employees can be rewarded through short term incentive which are closely matched to performance outcomes (weighted across individual performance, team or division performance, and organisational performance for example).
As with all aspects of the reward focus within remuneration strategies, we must always question exactly what are we rewarding and is this the best way to promote or encourage that behaviour?
Remuneration practices in review 