Question

How can a compensation package, which includes stock options, serve as an incentive to employees?

Answer 1

Answer-

Compensation package refers to various compensations to employees for there good performance. It includes bonus, incentives and stock options also which motivates them to work more efficiently and effectively.

A Compensation package which includes stock options serves as an incentive to employees as stock option give employees a share in the company which motivates employees and gave them security, and add to their social status. Stock options gave employees a status of a main part of the company. Stock options give some shares to them on there good performance which motivates them internally as there internal wants satisfied which results in more efficient work of employees. Compensation package which includes stock options is really a great incentives for employees as it motivates them in many ways, it motivates them to work hard for the company, it gave them social status and it satisfy many of their wants. That's how compensation package which includes stock options serves as an incentive to employees.