While offering a profit-sharing program can motivate employees to boost company earnings for a shared payout, combining it with phantom stock and setting tangible goals can create even stronger incentives. Phantom stock-- offering a stake in the company's future success without direct ownership--  can be uniquely effective when linked tospecific employee achievements.

Although the potential to earn more cash can be an incentive all its own, it’s important to tie it to specific performance metrics, providing employees with a sense ofdirection. By adding concrete milestones and linking employee achievement to both profit sharing and the granting or vesting of phantom stock, companies can significantly increase employee drive.

Setting and Achieving Incentive Goals

There are a few types of goals that suit most businesses, and they can be easily integrated into an incentive plan for your team.

·     Financial goals: One of the simplest ways to set goals is to consider the bottom line. This allows a business owner to set specific financial milestones at which profit sharing becomes available or the percentage shared grows. Plus, achieving significant financial targets could also trigger the granting of phantom stock units or accelerate their vesting schedule, directly rewarding contributions to the company’s financial performance. These milestones should ideally work in tandem with other goal types.

·      Performance-based milestones: These can be based on the achievement of certain goals within each team member’s role in the organization or an overall departmental goal. These goals can have a wide range, depending on the team’s purpose. Examples might include inquiries answered at a call center, training modules completed, or a big contract signed. Setting priorities that are not strictly financial allows  for more real-time measurement of your employees’ performance and can be especially helpful for teams who don’t have daily access to the company’s financial dashboard.

·      Value targets: In some companies, like HVAC or plumbing service businesses, the number of completed jobs and the time taken on each call by field technicians can be directly tied to profits. These metrics can be tallied and measured easily against goals. And giving these employees access to tracking with a window into how their work affects the company’s overall income provides a strong incentive for them to push for greater efficiency or higher standards of service.

Integration Help from Reins

Once you've identified the key goals for your team, integrating them into your profit-sharing and phantom stock structure is crucial. Instead of solely relying on overall increases in company value, you can structure your plan to grant a higher share percentage or additional equity units upon the achievement of specific milestones.

This provides employees with more immediate and controllable targets that directly influence their potential future payout. Effective implementation is key and can involve regularly updated spreadsheets, a CMS or other online reporting tools for real-time tracking of both goal progress and phantom stock allocation.

Reins has integrated such functionality into their MARE platform with a feature called "Milestones." This allows employers to directly link achievements to their stock or profit-sharing programs, including phantom stock. With this, employers can define specific milestones that trigger the granting of phantom stock units or accelerate their vesting schedule. Employees can then track their individual and team progress towards each goal and understand how their achievements directly contribute to their phantom stockholdings.

To learn how Reins can help your business set up milestones to incentivize employees for stock or profit sharing, call us at (725) 237-5396 or book an appointment online today.

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