Question

Understand different compensation plans for to attract, motivate and retain different levels of employees to convey equity

Answer 1

Different level of compensation plans:

1. Lower level employees

a. They can be provided with incentives for overachieving their targets.

b. They can be provided with allowances such as cab allowance etc

c. They can even be motivated by having a transparent performance appraisal.

2. Middle management

a. They can be provided with ESOPs. However, such ESOPs should be a reward for their continuous services or exceptional service.

b. They could be provided with incentives such as paid vacations, perks such a car facility etc.

c. They should even be incentivized on the performance of the team so that they are motivated to manage their team better.

3. High-level management

a. They can be provided ESOPs so that they feel more connected to the company since their own money is involved in the stock of the company.

b. Providing the senior level employee a new location to manage from the starting and making him the chief in charge of the same.

c. Providing him with a partnership in the business if the company does not want to part with his competency and the existing of such a person enhances the valuation of the company.