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Creating a positive corporate culture with equity compensation

Content Team January 9, 2023 mins read

About the team

J.P. Morgan Workplace Solutions’ Content Team comprises a dynamic and talented team of writers and experienced professionals who strive to deliver useful equity insights and simplify complex equity information, all with the aim of helping you to better understand equity management.

Creating a positive corporate culture with equity compensation

How equity compensation could help improve corporate and employee culture

The culture in a company is one of those intangible things – it exits, but how it develops and what form it takes can vary widely. What might be considered important in one organization may not be suitable, desirable or even possible in another.

When we say corporate culture we mean the values, beliefs, ethics and attitudes that characterize an organization and how these guide it towards achieving its vision, mission, and goals. It’s widely acknowledged that companies which value and reward their employees tend to see benefits in the form of loyalty and dedication, with harder working, more driven staff. Where the culture in a company is poor then this can have a negative effect resulting in low morale, high turnover of staff and even difficulty attracting new employees.

It’s fair to say that the majority of employers do want their companies to be good places to work, with a happy workforce and while creating the ideal corporate culture from scratch might not be possible, it can certainly be influenced and cultivated. This is why equity compensation could be just the tool you need to help shape your corporate and employee culture.

Observing corporate culture on our screens

It’s arguable that with the rise of social media, and the associated ease of access to information, that corporate culture is under the spotlight now more than ever. People see posts online about which employers allow pets in the office, provide free food in the canteen or give staff the day off for their birthday, and then they compare these to their own places of employment.

Throughout the global pandemic we could watch how companies worldwide acted, treated their staff and, in turn, how those staff responded. The fallout that occurred in the aftermath of the Covid-19 crisis, in the form of the Great Resignation and Great Reshuffle where employees around the world began to re-evaluate what was important to them, was a reaction to this.

Of course not every employer will have the option of replacing all the office furniture with bean bags or allowing everyone to work remotely, and while the grass isn’t always greener, a dissatisfied workforce which feels undervalued and unappreciated isn’t what any employer wants.

Common goals – forming bonds

When employees work together for a common cause, be it achieving the month-end sales target or getting a certain project over the line ahead of deadline, there is a feeling of unity, joy and satisfaction that comes with having worked successfully as a team. People working together to realize a goal creates a bond. So aligning those goals with rewards through employee equity compensation might just be the corporate glue which you’re looking for.

The traditional workplace has evolved as a result of global events, meaning the opportunity for in-office interaction and natural team-building experiences has been reduced

Depending on the type of equity compensation plan you choose the exact details will vary, but the overall result remains the same. An employee equity compensation plan gives the participants the incentive to be more engaged by tying their rewards to the company’s performance. Where the company does well, they do well and historically, companies where the employees are more engaged, tend to have a better corporate culture.

Tone from the Top

While corporate and employee culture can be evolved, it does need to be led from the top down. This really is a matter of practicing what you preach since the culture you want isn’t going to just materialize and people will otherwise see through it as fake culture.

Employees want to be valued, respected and treated as professionals. As mentioned, with social media, being aware that there are alternative options means they’re no longer satisfied with work environments that cause stress, anxiety or burnout. The pandemic revealed many of the gaps and shortcomings in workplaces and the workforce reacted with its feet in response.

This is why a company’s culture should evolve in a way that is good for both the organization and the employees with the tone from the top being true to this. Providing access to an employee stock plan is one way to show this loyalty and commitment.

Eradicating negativity

Rewarding employees this way makes sense. It makes them even more a part of the company. When the company does well, they do well, and with that feeling of pride then comes financial gain. Happy employees are more engaged employees and it’s also commonly acknowledged that there’s a link between employee engagement and customer satisfaction.

People want meaningful work and employment. They want to feel like what they do is of benefit and is appreciated – by rewarding them for their role in achieving a positive company performance you are doing this.

What’s more as younger generations enter the workforce they have more information available with which to inform their career and employment decisions. They have learned from the lessons which were hard won by those who’ve gone before and as such will tend to seek out employers who will value them. Companies who understand this can therefore tap into a new employee demographic.

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While agreeing on what’s good corporate culture can vary from place to place, it’s safe to say that most people will be able to identify negative culture and what they don’t want in their company – the type of culture that you’ll want to eradicate. While the outcome may not be guaranteed you can definitely influence and encourage things, with desired characteristics retained, undeveloped positive ones enhanced and undesirable ones allowed to fade away. Implementing a solid employee compensation scheme can work to help you achieve this.

At Global Shares, we have over 15 years of experience working with companies across the globe each day to manage their stock plan requirements and employee equity solution needs. Speak to one of our team today to find out how we can help your company begin reaping these benefits too.

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Please Note: This publication contains general information only and Global Shares is not, through this article, issuing any advice, be it legal, financial, tax-related, business-related, professional or other. The Global Shares Academy is not a substitute for professional advice and should not be used as such. Global Shares does not assume any liability for reliance on the information provided herein.