Compensation Management for Journal of Management -myassignmenthelp

Question: Discuss about theCompensation Management for Global Journal of Management. Answer: Introduction: Introduction to the paper: The current paper aims to discuss the stock plans and the types of stocks that an organization uses for its equity shareholders. In addition, it would highlight how the stock plans help the organizations to retain their key staffs. Finally, the pros and cons of the types of stocks of Starbucks are discussed briefly in this paper. Stock plans: Stock plans are the programs that an organization carries out where the participating staffs could buy its shares at a discounted price. The staffs contribute to these plans with the help of payroll deductions, which is developed between the date of purchase and the offering date (Ahmad, 2015). At the date of purchase, the organization utilizes the accumulated funds for buying shares in the organization on behalf of the staffs. The rate of discount on company shares relies on the particular plan; however, it could be a maximum of 15% lower in contrast to the market price. Retention: As stock plans are a type of deferred compensation strategy on the part of an organization, the benefits are passed over to the employees and thus, they increase their overall wealth creation. In case, the employees feel that they own a stake in the organization, they would make all the efforts for counting towards the same (Honack Waikar, 2017). Hence, stock plans serve as an effective tool of retention, since the employees could be linked directly with the growth or decline of the organizations. Conclusion: Types of stock plans: There are mainly three types of stock plans in an organization, which comprise of stock bonus plans, share purchase plans and stock option plans. Stock bonus plans are those shares that are provided to the employees at free of cost like in case of retirement plans and investment accounts. Share purchase plans are those at the time employees directly pay to the organizations in which they work for taking company shares (Jones, Forsythe Kemp, 2015). Stock option plans are those in which the employees are given with options to buy company shares at a future date at a certain price, which would be exercised with the rising market price. However, these plans are provided to some specific employees of the organizations. Pros and cons of stock plans: The pros of the above-stated stock plans are depicted briefly as follows: The employees have adequate knowledge of their organizations before making investment decisions Security is ensured in these types of stock plans, since the employees would retain them even after retirement or termination (White, 2016). With the help of these stock plans, both the organizational goals and employee goals could be lined up. However, there are certain cons related to these plans and they are enumerated as follows: As the employees are left with shares only, it could increase their overall risk on savings. The employees need to be aware about the professional fees related to tax and administration issues. Since the employees could not exercise any kind of effect on the stock option, it could result in poor performance and thus, they might lose interest in the plans. References: Ahmad, A. (2015). Executive Stock Option Contract Increases Firm Value and Performance: A Case Study on Starbucks Company.Global Journal of Management And Business Research. Honack, R., Waikar, S. (2017). Growing Big While Staying Small: Starbucks Harvests International Growth.Kellogg School of Management Cases, 1-22. Jones, I. M., Forsythe, L. M., Kemp, D. J. (2015). Dumb Starbucks: Parody or Clever Marketing Ploy? A Teaching Case.Journal of the International Academy for Case Studies,21(6), 337. White, S. (2016). Starbucks.Journal of Financial Education,42(3-4), 359-379.