A Piece Of The Pie
What do you think employees at a business expect in terms of compensation? What do you expect? If you were suddenly granted a 25% raise would your level of motivation increase? Probably for a while. But then I bet that you would settle back into your old dissatisfaction if you were in fact dissatisfied prior to your pay raise.
How would you feel if you were suddenly granted a percentage of ownership in the business in lieu of a raise? If you liked the business in general I bet that you would feel a whole lot better in the long run. People long to be entrepreneurs partly because they want to own what they are sweating for day in and day out. They want the greater financial benefits that come from having a stake. Why can’t you be an entrepreneur and employee at the same time?
Stock option plans were the rage in the late nineties but they were used in the wrong way. People’s short sighted mindset drove them to think that stock options equaled instant riches. And while stock options did mean that for some people, many more spent money they never had.
A piece of a company should be looked at as a long term investment. If presented properly that piece can help motivate employees in the long run. Don’t just take my advice. Listen to James Hong, founder of the hugely successful HotOrNot.com.
HotOrNot hit some bumps in the road after they became a huge online destination. The founders of the company went into maintenance mode and started to see their market share slipping. They realized that changes needed to be made. Remember that Lesson Nine of Welcome To The Beehive teaches us that change is the only constant in business.
One of the major changes HotOrNot made was to start up an employee stock option plan. InJames’ own words, “Giving the team a large cut of equity has aligned their interests with ours and we’ve seen it breathe an incredible amount of new energy into them… as it should.”
Right on. Your best employees deserve a piece of the pie. If you’re an employee but are losing motivation because you don’t have a stake in the company then you should ask how you can get a stake. You just might save your company from having to replace your knowledge when you decide to jump ship for a company that will grant you a stake.
Lots more good knowledge in James’ post. Go here to check it out.
