We hear a lot these days about “the war for talent.” “Talent” is never defined, nor is it ever explained why labor markets are so much more competitive now than they used to be (the “war” existed, it was said, even when unemployment was very high), but we all know that what is meant is mostly top-level managers and maybe software engineers. These are the people, it is said, who should get most or all of the incentives, including equity. There are a number of explanations for this that seem to make sense but that research shows are just not true.
You’ve heard it over and over. Good companies create a sense of ownership among employees at work. They share financial information with employees at the corporate and work level, they encourage employees to contribute ideas, they set up employee teams, and they limit hierarchy. Bosses focus less on telling people what to do than listening to what employees think should be done. Creating a sense of ownership leads to high employee engagement and high engagement leads to higher performance. Research by the Gallup Organization finds that high engagement companies “experience 22 percent higher profitability and 21 percent higher productivity compared with workgroups with low levels of engagement.”