Employee Stock Option (Ownership) Plan is an incentive which is used to motivate, reward, remunerate and hold on to achievers to acknowledge their proven contribution to the company. Employee stock ownership plans (ESOPs) provide employees with a sense of affiliation and belonging to their employer company. Employee productivity is widely seen as justification for using ESOPs.
ESOPs were traditionally utilised only by knowledge-based enterprises, but they are increasingly used by businesses from all industries. On a global scale, the value of ESOPs as a vehicle for employee wealth sharing and motivation has been recognised. Organisations such as Infosys, Wipro, and others have generated a number of affluent employees as a result of ESOPs.