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| 0 8000 If you choose to add performance conditions to your Westing, please ensure that the performance | |
| 8000 11920 matrix is simple and easy to understand. | |
| 11920 16480 You could link them to company performance or individual performance or a combination | |
| 16480 17960 of the two. | |
| 17960 23720 For senior roles, it is better to use either only company performance parameters or if | |
| 23720 30640 you should use individual performance, assign a much higher weight to the company performance. | |
| 30640 33280 For junior roles, you might do the opposite. | |
| 33280 38640 Either only individual performance or a much higher weight attached to it. | |
| 38640 43380 Depending upon your long-term objective, you might even consider everyone linked only | |
| 43380 45560 to company performance. | |
| 45560 51200 The message you send out here is that the fortunes of everyone ultimately depend upon | |
| 51200 53240 the fortunes of the company. | |
| 53240 56160 So we all sink or swim together. | |
| 56160 58500 We all have one not-star. | |
| 58500 63760 Let us focus on how the company performs overall and not how you perform individually. | |
| 63760 70880 Again, this will depend upon how your work is structured within your company, the interdependencies | |
| 70880 76640 it has and the work culture you have decided to create based upon your vision. | |
| 76640 82520 You may consider a scale or ranges of performance rather than a binary performance matrix. | |
| 82520 85880 A binary matrix would mean a yes or a no. | |
| 85880 92320 If we hit this number, the options west, if we are shot by even one, nothing rests. | |
| 92320 97840 A range, on the other hand, means if we reach between this and this, then 100% of those | |
| 97840 99380 options rest. | |
| 99380 106000 If we reach between 90 and 100% of that number, then only 80% options rest and so on. | |
| 106000 111500 You should have a reasonable minimum below which nothing rests. | |
| 111500 115220 You may not waste all the options based on performance. | |
| 115220 120540 Some could waste only on tenure or continued employment with the company. | |
| 120540 123860 You see now we are talking about multiple layers. | |
| 123860 128620 The challenge is to balance fairness with simplicity. | |
| 128620 131100 So try a few alternatives. | |
| 131100 136620 Consider how each fits with your long-term objective and then make a decision. | |
| 136620 138580 Here are a few examples. | |
| 138580 141100 Let's start with the simplest. | |
| 141100 146860 Standard options granted with the 10, 20, 30, 40 Westing but all options west only on | |
| 146860 150460 tenure, no performance condition. | |
| 150460 154980 Second, all options west on performance. | |
| 154980 162140 Third, 100 options with the 10, 20, 30, 40 Westing but 70% options west on performance | |
| 162140 165100 and 30% west on tenure. | |
| 165100 172260 So after the first year, when the first 10 options are due to west, three of them will | |
| 172260 174940 west automatically due to tenure. | |
| 174940 180780 There is the balance seven would west based upon some performance parameters. | |
| 180780 184940 Now that performance condition could have more layers. | |
| 184940 189180 Is everything linked only to the company performance or is it also split between company | |
| 189180 192820 and individual performance in a certain proportion? | |
| 192820 198100 What weights are assigned to company performance versus individual performance? | |
| 198100 202980 And the last layer is the performance matrix structure. | |
| 202980 208500 Is it a yes, no binary kind of a matrix or is it a range matrix? | |
| 208500 214500 So you could have 10 options due to west in the first year but seven of them west based | |
| 214500 221060 on performance which is then split as 50% individual and 50% company performance. | |
| 221060 226220 But individual performance has a scale that says that if you achieve the highest rating | |
| 226220 237140 A, all of that 50% chunk, if B, then 75% of those 50% options west and so on. | |
| 237140 243100 The company performance could have a similar range with respect to company parameters. | |
| 243100 246420 Be careful about adding layers. | |
| 246420 251940 Add new layers only when you are absolutely convinced that you must do it because it | |
| 251940 257260 furthers your long term objective or the culture you are trying to create. | |
| 257260 259940 Simple is always more beautiful. | |
| 259940 263340 You could also create milestone options. | |
| 263340 269140 As the name suggests, these do not west annually or quarterly but west only on meeting a certain | |
| 269140 272660 milestone or an event occurring. | |
| 272660 277980 This might sound very interesting but be very very careful about these. | |
| 277980 284700 Use them only if you can define your milestone really, really, clearly and objectively. | |
| 284700 289020 The milestone need not be the achievement of an entire product or the discovery of a | |
| 289020 290340 molecule. | |
| 290340 296900 It is a milestone so should be a certain critical and a very clearly definable stage you reach | |
| 296900 299220 in your journey. | |
| 299220 303220 Creative milestones are better than subjective milestones. | |
| 303220 309300 So you could west simply based on continued employment or west based on performance. | |
| 309300 314340 Choose whatever fits best with your vision and the culture you wish to create. | |