When Employees Have Equity Attitude- Return on Human Capital Surges

by Corey Rosen, John Case, and Martin Staubus

Editor's note: The attitude of companies with programs for employee equity runs something like this: This is our company, and we will do whatever is necessary to help it succeed. It's that can-do attitude that makes equity stakes not only good for morale, but good for business, says the authors of Equity. In this excerpt, the three necessary elements to a successful equity model are explored.

The three elements of equity
So how does a company reach the point where most employees share this attitude? That's where the specifics of ownership and management come in—how the business is structured and how it is run. None of the companies we studied followed exactly the same path. But the research and interviewing suggest that there are three key elements and that without all of them, it won't work. One element is equity itself—stock ownership significant enough that it matters to employees' financial future. The second is a culture that helps people think and feel like the owners they are. The third, and often overlooked, element is a shared understanding of key business disciplines, and a common commitment to pursuing them.

Complete article at HBR

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