Inequities in employee benefits

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Equity Based Recognition Programs: Ethical and Legal Implications

Equity based recognition programs are designed to reward employees for achievement. However, they come with many considerations, including the legal implications and ethical considerations of owning and maintaining stock shares. At one time, this type of offer as a reward or benefit was considered highly valuable. Today, the markets are volatile and such systems for offering rewards and benefits are not nearly as desirable. In addition, maintaining financial viability of stock options requires education and monitoring on the employee's part. Otherwise, the employee may not be able to maximize the benefit and may even experience financial loss. In positions where employees work in positions that do not require education beyond high school, there may be little understanding of how the stock market works and how to monitor stocks. Companies that offer such options need to ensure that employees understand the potential risks and benefits.

In the past, companies would often offer corporate stock options for employees. This may have been considered a reward for employees, when the company was profitable. However, companies might offer stocks as a means of increasing their value. For an organization that is only marginally profitable or that may face financial difficulties in the future, such an action can be viewed as a means of benefitting the organization, without benefit to the employee (World at Work, 2010). Such an action does little to motivate employees to do a good job. Some companies may inflate their value, to make stock options appear more lucrative. This is not a good way to encourage mutual trust between the organization and the employee.

Today's share plans may be difficult to sell to employees. The more global approach to hiring and to stock share plans comes with many challenges. Exchange rates may make such plans less profitable. At the same time, offering such ...