Golden handcuffs

Best performers are the most valuable asset in any company. Customers, products, technology, inventory come and go. No doubt, the company pays the best employees well and has a great culture, mission, strategy and vision. Nowaday in the market competitors can  offer the same conditions.  The question is: how to keep the best people, consider tying them to company with handcuffs made of gold.

Best performers are the most valuable asset in any company. Customers, products, technology, inventory come and go.

No doubt, the company pays the best employees well and has a great culture, mission, strategy and vision. Nowaday in the market competitors can  offer the same conditions. 

So, the question is: how to keep the best people, consider tying them to company with handcuffs made of gold.

Encourage The Top Employees to Stay
Golden handcuffs are financial inducements and benefits (typically deferred) given to certain employees to encourage them to remain with the organization for a longer period of time.

Why Use Golden Handcuffs?
Golden handcuffs play a vital role in an organization’s success – especially for organizations based in highly competitive industries.

Top talent is oftentimes hard for an organization to find and acquire. When an organization finds “top talent,” it is in its best interest to stop them from leaving. It is because such individuals usually contribute significantly to the current and continued success of the organization.

The key reasons behind using golden handcuffs include:

  • To reduce the risk that top employees leave the organization prematurely, which would negatively impact business operations and profitability
  • To entice top employees to create long-term company growth
  • To keep top talent away from competitors
  • To align the interests of both employees and business owners
  • To thank top employees for their tenure with the organization

There are many types of golden handcuffs programs:

  • thank top employees after extended periods of high performance. Most business owners want to thank high-performing employees after they have given many years of service to the organization. Golden handcuffs plans commonly are designed to do just this
  • create an incentive for mid-tier employees (in terms of either role or performance) to advance in the company and become eligible for inclusion in the golden handcuffs plan that is in place for top-tier employees
  • incentive compensation plans
  • stock options
  • stock appreciation rights
  • synthetic equity programs
  • share bonus plans

Incent top employees to help create long-term, sustained company growth. The potential for a future compensation pay-out orients the employee towards achieving the company’s long-term business goals.

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