“Appraisal Process Viz-a Viz ESOP- A Webinar on optimizing employee engagement.”

February 28, 2024by Ms. Mohini Varshenya0

Annual appraisal serves the dual purpose of motivating employees through recognition of their performance and communicating the associated reward for the upcoming financial year. This process also involved establishing parameters to guide performance expectation for the year. The Purpose of this webinar was to highlight the alignment of ESOP Grants with the Appraisal Process and bring to the attention of companies who are planning for the Appraisal cycle for the next financial year.

With the beginning of the new Financial year, it is the right time for the Companies to synchronize its appraisal cycle and ESOP.

Industry practitioner from listed company were invited for a round table discussion to talk from about the HR point of view on various challenges faced by them at the time of implementation of ESOP, including right time of considering the ESOP Grant, which provided very helpful insights on different industry practices adopted by these companies, their objective to implement ESOP, coverage of employees, and how successful is ESOP today in organizations.

 Analysis on Appraisal viz-a-viz ESOP Grant:

By analyzing how ESOP can be aligned with the appraisal process of the Company, the following were the key takeaways of the discussions held in the webinar:

  • Aligning with Company Objectives: Understanding the long-term goals of the company is important for effective ESOP implementation.
  • Creating Shareholders’ Value: By aligning company objectives with employee goals, ESOPs create an opportunity for mutual growth, building the company’s business while rewarding long-term employee association.
  • Inclusion of Entry-Level Employees: Companies now extend ESOP participation to entry-level employees, fostering a culture of growth where rewards are tied to performance criteria.
  • Integration in Campus Placements: ESOPs are increasingly becoming part of the Cost to Company (CTC) for new hires, reflecting a strategic approach in achieving multiple organizational objectives.
  • Financial Awareness: Employees are more financially literate, emphasizing the importance of transparent communication about allocation, vesting, and exercise processes.
  • Equity Ownership for Alignment: Management encourages broader equity ownership to align more employees with company objectives, influencing both recruitment and retention strategies.
  • Narrative Shift: ESOPs transform how organizations are presented to candidates and contribute significantly to employee retention efforts.
  • Effective Communication: Providing clarity and ease of understanding in communication about ESOPs is crucial to ensuring that the rewards are well-received and appreciated by employees.

Thus, successful implementation requires a proper structuring of targets, goals, type of compensation which are aligned with the objectives of each organisation respectively. This approach motivates employees, enhances engagement, and fosters a culture of ownership among employees. Companies adopting this integrated strategy can drive growth and success while nurturing a highly engaged and motivated workforce.

 

For more detail please view our webinar- https://www.youtube.com/watch?v=4ybWQh9g1Ik

 

Ms. Mohini Varshenya

Ms. Mohini Varshenya

Partner & Head-ESOP Services

FCS

mohini@indiacp.com

+91 9971673332

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