Why many companies are doing equity incentives, but the results are not satisfactory

Because many companies are in a hurry to achieve success, against the law of the market in doing equity incentives, thus ignoring the key points of equity incentives, therefore, resulting in poor results. Enterprises that choose equity incentives to improve efficiency need to focus on and choose the key points of equity incentives. The key points are as follows:

1, the choice of incentive model:

The incentive model is the core of the equity incentives, which directly determines the effectiveness of the incentives.

2, the determination of incentive targets:

Equity incentives are designed to motivate employees, balancing the long-term goals of the enterprise and the short-term goals, especially focusing on the long-term development of the enterprise and the realization of the strategic objectives, therefore, the determination of the incentive target must be oriented to the strategic objectives of the enterprise, that is, the selection of personnel who are of the most value to the enterprise strategy.

3, the source of funds for the purchase of shares:

Since the object of the incentive is a natural person, the source of funds has thus become a key point in the whole process of the plan.

4, assessment index design:

Equity incentives must be linked to the exercise of performance, one of which is the overall performance conditions of the enterprise, the other is the individual performance assessment indicators.

Equity incentive considerations:

1, long-term incentives:

From the perspective of the employee compensation structure, equity incentives is a long-term incentives, the higher the position of the employee, the greater its impact on the company's performance. Shareholders in order to make the company can be sustained development, generally use the form of long-term incentives, the interests of these employees and the interests of the company closely linked together, construct the interests of the **** the same body, reduce the agency cost, fully and effectively play the enthusiasm and creativity of these employees, so as to achieve the company's goals.

2, the return mechanism of the value of talent:

The return of the value of the talent is not salary, bonuses can be satisfied, the effective way is to directly implement the equity incentives for these talents, their return on the value of the value of the company and the company's sustained value-added closely linked to the company value-added return through the value of the company's contribution to the development of these talents.

3, the company control incentives:

Through the equity incentives, so that employees involved in the development of the relationship between business management decisions, so that part of the company control, not only focus on the company's short-term performance, more concerned about the long-term development of the company, and really responsible for this.