January 25, 2022
People tend to believe and feel strongly for things they identify with. Throughout human history, a sense of common identity has played a crucial role in the development of various human social groups. In a corporate setting, workers and employees are inclined to support and continue working for a company that shares in their ideals, values, and interests. Workers are more likely to join and become long-term employees of a company that conducts business in a way that is in line with their social, economic, and environmental beliefs.
While it may be hard for a company to align the personal values of individuals, it has the capability to create a shared identity among its workforce by giving them a sense of common ownership. Equity compensation enables this by providing workers the opportunity to become part-owners of a company that they believe in.
We sometimes associate material things that we own with jobs, hobbies, or projects that we are passionate about. For example, a guitarist might associate his love of music with a particular guitar brand or model. This is why it is not uncommon to see famous musicians sticking with a particular brand of an instrument throughout their entire career, with some partnering with the said brand to create a special model to fit their identity and playstyle.
This human passion is what leads to the creation of successful brands. A sense of ownership among clients and consumers over a brand fosters identity formation, association, and loyalty. This same feeling can be translated within the context of a workplace.
Most people want to take pride in what they do and who they work for. If the company’s ideals and passions align with theirs, that is well and good; it will be easy for the worker to identify with the company. But there are times when that alignment is not present and needs to be created.
This is where equity compensation and stock ownership come into play. By giving workers a stake in the company, they are given a common goal of wanting the company to succeed. Because when the company is successful, the value of their equity increases. This shared economic goal of creating a successful company cultivates a sense of loyalty that may, later on, grow to become part of that worker’s identity.
Beyond allowing people to have a common economic interest, stock ownership also develops a sense of belonging within the company. Identity formation and relations are developed among workers by providing them with a common goal and struggle.
This results in a feeling of “we’re all in it together”—which is a powerful feeling for a group of people to have when faced with challenges and adversity.
When people have a shared experience and identity, they become aligned. Workers, for example, will be able to form a deeper understanding of the goals and motivations of the company and vice versa.
Alignment leads to the creation of a culture of empathy where everyone is sensitive to the needs and circumstances of others.
Identity formation leads to culture creation and, eventually, to the emergence of a community. If all people in a company start to share the same hopes and fears, risks, and rewards—the company ceases from being a mere corporation and becomes a true collective devoted towards the achievement of everyone’s betterment and success.
Naturally, individuals want to associate with other individuals who share the same ideals, values, and interests as them. Companies could benefit from this by using equity compensation to make the company’s success a collective goal for all of its workers.
Thus, not only would this create a financial incentive for people to work harder and contribute more, but it also has the potential to strengthen personal relations among workers internally. In other words, equity compensation provides workers both economic benefits and social support with its community-building capabilities.
Upstock utilizes the uplifting power of stock ownership and compensation to nurture the process of identity formation among workers. In doing so, we aim to let workers develop strong bonds with the company they work for through the aligning properties of equity rewards. We do the same thing for crypto companies with our latest offering, Uptoken. Uptoken brings the deferred compensation model used by Restricted Stock Units to token distribution with the use of Restricted Token Units.
We are passionate about using equity compensation and stock ownership to build communities and align stakeholders. So let us know if this is something that would work for your company or community by reaching out.