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10 ways to make your employee share plan work harder

Remuneration executives have long appreciated the value of employee share plans in driving improved business performance by creating a direct link between employee and company performance. That’s because when employees own shares, they think and act like owners.

As Andrew Porter, President of Group of 100, explains, “when an employee can directly see how improvements in the bottom line of a business can benefit them, they become more motivated – generally speaking – and the business improves.”

Research has shown employee share ownership can increase productivity by up to 5% when combined with employee engagement and involvement. But to drive engagement you need to build awareness, understanding and commitment – and that’s where employee communications come in.

Here are 10 ways to improve the effectiveness of your share plan communications:

1. Explain where your share plan fits into your company’s vision and strategy.
2. Reduce the complexity of your plan design, especially if your company is global.
3. Remove as much tax, legal and compliance jargon from your communications as you can.
4. Support employees with investor education – don’t assume they understand how shares work.
5. Update employees regularly on the plan, using a mix of tools and channels, from face to face to digital.
6. When the share price falls and rises, use it as a chance to talk with your employees.
7. Make your plan part of your value proposition to attract potential employees.
8. Ask executives to endorse the plan and equip managers with consistent messages about your plan.
9. Establish feedback loops to understand employee perceptions, misconceptions and information needs.
10. Create a culture where employees are advocates of the plan.

There are several advantages to giving your employee share plan a bigger role in your performance and rewards framework. For example, employee owners are more likely to:

• be an advocate for your organisation
• be loyal to its products and services
• participate in company decision making
• pay closer attention to financial targets, ongoing results and waste
• seek out issues and problems to improve and fix
• continue to reinvest in your company through the share plan over time.

Lifting engagement isn’t as easy as changing a logo and adding a tagline to your plan. If the plan is poorly designed in the first place, no amount of lipstick will make it more attractive.

Optimum results need effective plan design and effective employee communication to drive awareness, understanding – and ultimately – behaviour change.

So why not take a look at refreshing your share plan communication and engagement strategy – you might just be surprised by the number of lights it turns on right across your organisation.

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