Home Business & Management Hiring and rewarding of employees – 5 ways to hire employe

Hiring and rewarding of employees – 5 ways to hire employe


Hiring means giving employment to a person.

rewards are the benefit which a employees get reward can be in form of bonus .

Whats in it for me-

  1. Hiring
  2. Grant
  3. Option
  4. Vesting
  5. Value
  6. Reward vs Recognition
  7. Bonuses
  8. Conclusion
  9. FAQs


Start-ups need to lay special emphasis on hiring and rewarding of employees

Of course, employees come from more established companies need to be incentivized enough to leave their relatively secure jobs to take up the risky proposition of working in a start-up.

The incentives Wally in the form of share-based payments to employees.


Employee share-based payments (ESPP) are incentive payments to employees in form of shares.

Employee share-based payments give employees the right to acquire shares of the company

As employers, in the future can sell at a good price, even if there is an increase in the fair market value of the stock from the option grant price.

Before elaborating on the accounting aspects of Employee Share-Based Payments (ESBP) it is important to know the meaning of the following terms.

1. Grant

Grant of the option means giving an option to the employees to subscribe to the shares of the company.

The day a share-based payment plan is announced and accepted by employees is called the grant date.

2. Option

The option is given to an employee which gives him a right to purchase or subscribe at a future date,

The shares offered by the company directly or indirectly, at a pre-determined price.

Options are a right but not a responsibility granted to an employee in pursuance of the employee stock option scheme.

3. Vesting

Vesting is the process by which the employee becomes entitled to receive the benefit of a grant made to him under any of the employee benefit schemes.

The date, when the employees become entitled to receive

Types of Employee Share-Based Payment Plans Employee share-based payment plans (ESBPP) generally take the form

Employee Stock Option Plans (ESOP)

ESOP is a contract that gives employees of an enterprise the right to respond, for a specified period, to purchase or subscribe to shares of the enterprise at a fixed price.

Exercise price remains fixed even if the market price goes up in future

Employee Stock Purchase Plans (ESPP)

ESOP is a plan under which the enterprise offers shares to its employees a discounted price as part of public issue or otherwise, Stock Appreciation Rights (SARS)

SARS ,are rights that entitle the employees to receive cash or share Hiring and rewarding of employees Called the vesting period early period

– The exercise period means the time period after vesting which an employee should exercise a high right to apply for shares st the vested option in pursuance of the scheme.

– Exercise price means the price payable by the employee exercising the options granted to him in pursuance of the scheme classic value

– It is the excess of the market price of the share under sorer the exercise price of the options (including up-front payment, Therefore, intrinsic value market price – exercise price.


– It is the amount for which stock option granted or a shared for purchase could be exchanged between knowledgeable, willing parties in an arm’s length transaction.

Share-based payment arrangement

– An agreement between an entity or another group entity or a shareholder of a group entity) and another party (including an employee) which entitles the other party to receive

Equity instruments (including shares or share options) of the entity (or another group entity or Cush (or other assets)

Share-based payment transaction-

Transaction in share-based payment arrangement in which the entity:

Received goods or services from a supplier (including an employee


Incurs an obligation (to the supplier) when another group entity receives the goods or services.

  • Equity Instrument

– A contract that gives a residual interest in the assets of an entity after deducting all its liabilities.

  • Share option – A contract that gives the holder the right, but not the obligation, to subscribe to the entity’s shares at a fixed (or determinable) price for a specified period of time.
  • Vesting conditions.

Examples of vesting conditions

Include completion of a specified service period and meeting performance targets (e.g. a specified increase in revenue over a period of time).

Reward vs Recognition

Although these terms are often used interchangeably, reward and recognition systems should be considered separately.

Meanwhile, employee reward systems refer to programs set up by a company to reward performance and motivate employees on individual and/or group levels.

While previously considered the domain of large companies, small businesses have also begun employing them as a tool to lure top employees in a competitive job market as well as to increase employee performance.

As noted, although employee recognition programs are often combined with reward programs they retain a different purpose altogether.

They are intended to provide a psychological—rewards a financial—benefit.

Although many elements of designing and maintaining reward and recognition systems are the same, it is useful to keep this difference in mind

Especially for small business owners interested in motivating staff while keeping costs low.


In designing a reward program, a small business owner needs to separate the salary or merit pay system from the reward system.

Financial rewards

Especially those given on a regular basis such as bonuses, profit sharing, etc.

However by doing so, a manager can avoid a sense of entitlement on the part of the employee

And ensure that the reward emphasizes excellence or achievement rather than basic competency.

Merit pay increases, then, are not part of an employee reward system.

Normally, they are an increase in inflation with additional percentages separating employees by competency.

In addition, they increase the fixed costs of a company as opposed to variable pay increases, such as bonuses, which have to be “re-earned” each year.

Finally, in many small businesses teamwork is a crucial element of a successful employee’s job.

Merit increases generally review an individual’s job performance, without adequately taking into account the performance within the context of the group or business.


To encourage salespersons to generate additional business or higher profits.

Indeed, increasing numbers of businesses have switched from individual bonus

Programs to one which reward contributions to corporate performance at group, departmental, or company-wide levels.

According to some experts, small businesses interested in long-term benefits should probably consider another type of reward.

Bonuses are generally short-term motivators

By rewarding an employee’s performance for the previous year, they encourage a short-term perspective rather than future-oriented accomplishments.

Meanwhile they are rewarding accomplishments above and beyond an individual or group’s basic functions.

rather than a reward for outstanding work.

However, contending that bonuses are a perfectly legitimate means of rewarding outstanding performance,

And they argue that such compensation can actually be a powerful tool to encourage future top-level efforts.


Basically, hiring process is the process of reviewing applications, selecting the right candidates to interview, testing candidates, choosing between candidates to make the hiring decision and performing various pre-employment tests and checks.


1. What is hiring?

hiring means giving employment to a person

2. What is a employee ?

Employee is a person who work in a company to get there salary and other benefit

3. What is rewarding?

rewards are the benefit which a employees get reward can be in form of bonus

4. What is bonus?

A bonus is a financial compensation that is above and beyond the normal payment expectations of its recipient.

Bonuses may be awarded by a company as an incentive or to reward good performance.

Bonuses may be paid in cash, but also stock or stock options for employees.



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