Forming a Fair Share

In our previous post, we looked at Pearson Innovation – a technology company that implemented an Enterprise Management Incentive. According to the company’s CEO, Matthew Pearson, the results were extremely positive; increased staff engagement, motivation and retention? In today’s post we aim to give some practical advice on how to implement such a scheme in your company.
How to deal with Formation

The process of implementing a share ownership scheme has been perceived as notoriously complex and time consuming. However, it is merely another sort of company formation. Martin Wallwork, founding partner of the international law firm Wallwork & Mason , explains how implementing a share scheme can be seen as complex, due the number of formations available. However, he states “All these different formations fall into two main divisions: Initiatives that are HM revenue and Customs approved and initiatives that are not.”

Like all issues to do with business administration, there is a substantial amount of bureaucracy to get through. As Pearson confirms “As you would expect with any sort of company formation, it needs to be executed correctly.” Therefore I would suggest you need to consult professional advice to ensure there are not complications down the line, which could undermine the purpose of undermining the scheme in the first place.”

Loyalty and Retention

For Pearson, implementing a share ownership scheme has resulted in a motivated and committed workforce. “Staff retention, productivity and motivation are all up. The future looks bright.” However, it would be naïve of us to suggest that there isn’t a potential downside, a reality that even Pearson freely admits.

“My main objective was to find the most productive motivational strategy to reward my team. In my company, it has worked to ensure key members of staff are retained and, for the moment, it looks as if they wish to remain here for the foreseeable future. While this is a positive outcome, it was not my primary objective.”

Ultimately, if a member of your team is unhappy in their role, it is best that they leave the company, not remain due to the fact they have shares.

All in all, Pearson remains confident in the future success of the share scheme he implemented. “When you pass the coffee machine and you hear staff discussing share prices rather than complaining of stress or gossiping about other members of the team, you know you have done something right.”