One of my clients was thinking of giving shares or part ownership to some of his employees to get them to be more engaged and keep them from leaving for more money.

I suggested against it as his employees did not seem ready for this and it seemed he would be throwing away his money and causing new problems,

To give ownership of a company to employees requires a good strategy on how to distribute shares, to who and when. There needs to be a strong core of employees who are already committed to the company, performing well and are mostly self-managed.

A good first approach is to create a greater sense of belonging to the company by having the employees participate in decision making. This can raise the level of responsibility of employees and have them become committed and take action to implement the decisions.

Get Employee Input

The easiest way to start is by asking for employee input on decisions you are contemplating. This will show them your value their opinion and want to include them in your planning strategy for the company. It will also give you a sense of who is excited about contributing and learn about their business acumen. Be sure to give them feedback as to how their input affected your decisions.

Problem Solving Meetings

Holding problem solving meetings with employees to work on continuous improvement projects is a great way to have employees feel like they are helping steer the ship. It shows you value their thinking and want their contribution.

When decisions are implemented as a result of the problem-solving activity, the employees involved will can be the ones to get all employees onboard as they will understand what went into the decision-making process.

Again, you will get to see the attitude of employees and how much they care about making a difference for the business.

Strategy for Share Distribution

Before jumping into giving shares or ownership of your company to employees you need to think this through well and consult with professionals such as financial, tax, legal and Human Resources.

Here is a good article to check out for small businesses

There can be great reasons to give shares or ownership to employees, but I suggest taking the participative leadership approach first and get a sense of who is ready for taking on a more committed role in the company.