In current scenario, business may face high employee turnover due to many reasons like offering lower salary to an employee, lack of motivation at the workplace, lower employee morale, lack of progression opportunity, poor wellness offerings to the employees etc.
In this situation the business should think about their most valuable asset i.e. their employees and the ways to offer them the best to retain them in the Company so that they can add more value to the Company in the near future.
In a Company generally the employees who are working very hard to achieve the desired organizational goals also have their expectations from the Company in the form of getting recognition in their work with monetary benefits.
However, whenever there is a constraint on the profits of the Company, it becomes difficult for the companies to award their employees.
Thus, in order to retain the employees, keeping into consideration the profit constraint thereby reducing the employee turnover ratio, a company can plan for issuing ESOPs i.e. “Employee Stock Option Plans” which could serve as a potential source of employee retention for any company.
Though ESOPs gained popularity as a widely used retention strategy only in the 1990s, old-economy companies such as Walt Disney, Pepsi and Warner Bros had been using them since the 1980s. Pepsi was one of the first companies to offer options to its employees.
The experiences of these companies showed that ESOPs could prove to be very beneficial. It was also supported by various researchers as it provides employees with certain ownership in the company which could motivate them to stay with the company longer so as to obtain maximum profits in the future.
Thus, in order to succeed in removing the hindrances on the profit margins caused by the employee turnover ratios with the help of issuing ESOPs in the organization, please contact the undersigned:
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