Employee Incentive Plans
We all know that every successful business has to have good, or even great, employees. There’s no question about that.
The employer needs talent. He needs a person who can do the job. More importantly, he needs someone who he can rely on to help grow the company, take it to the next level, create new products, create new markets.
The employee needs to know that he is getting on with his own business, that his future is secure and that his talent is being rewarded. He needs to feel pride in his company and his contributions to its growth.
How to Incentivize and Retain Employees
So, how does the employer incentivize the employee? How does he create an environment that makes the employee feel like he is part of the company, willing to work hard to make the company the best it can be?
The obvious answer is that the employer pays the employee a lot of money. The problem is, that doesn’t always work. High level, skilled people know they are valuable. They often want an ownership interest in the company. The business owner, on the other hand, wants to maintain complete ownership and control of the company.
One way to meet with needs of both the small business owner and the employee is to adopt a Phantom Stock Plan. That’s an odd name, but really, it’s just a simple contract between the owner and the employee whereby the employee gets all the benefit of ownership without actually owning a part of the company.