The NASPP Blog

Jenn’s on vacation, so I’m blogging twice this week. Since I get an extra entry, I thought I’d focus on one of my favorite topics: why the stock plan administration team should be using focus groups.

Is Your Stock Plan Out of Focus?

A focus group is a small group of employees that give you feedback on your stock programs. It provides a structured mechanism by which you can learn a lot about how employees perceive the company’s stock programs and the education around those programs. And it costs virtually nothing to implement–other than a little time from you and the group participants.  Focus groups are one of cheapest yet most effective strategies you can use to improve your stock programs.

Once you start to think about it, I think you’ll realize that there are many aspects of stock plan administration where a focus group could be very helpful. Here are a few ideas to get you started:

• Employee Education: A focus group can give you preliminary feedback on any educational materials you create. Do the materials make sense? Do they raise additional questions that aren’t answered? Do employees respond positively to the message? I think that just about every employee communication you distribute and every presentation you do should be run past your focus group first.
• Plan Design: Test out new plan designs with the focus group to find out what works and what doesn’t work–before you’ve made a significant investment.
• Put an Ear to the Ground: Your focus group can give you a feel for what employees are saying about the company’s stock plans.
• Be Prepared: By testing new programs and educational materials with your focus group, you’ll get a feel for how these strategies will be perceived by employees. You won’t be caught off-guard during the official roll-out and you can be proactive about addressing questions and negative comments.
• Turn Naysayers Into Cheerleaders: One effective way to silence your critics is to bring them into the process and make them responsible for helping to improve the program.

Who Should be in the Focus Group?

Probably somewhere around 20 people is about the right for the size of the group, depending on the size and diversity of your overall employee population. You don’t want it to be so large that it is unwieldy but you need it to be large enough that you get a representative sample of employee opinions. Also, remember that not everyone will participate in every opportunity to provide feedback, so you want the group to be a little larger than the number of active participants you hope to have.

Here are few thoughts on who to invite to be a part of the group:

• Employees that are particularly outspoken or that have demonstrated a strong interest in and/or understanding of the stock program.
• Employees that show leadership and won’t be afraid to speak up. Ask department managers for suggestions.
• Make sure a wide range of departments and job levels are represented.

Of course, it goes without saying that you should only invite employees that are eligible to participate in the stock plan. If you have multiple plans with differing eligibility criteria, you may need multiple focus groups (e.g., one focus group for the all-employee ESPP and a different focus group for the RSU program that is only offered to managers and above). It also might make sense to have regional focus groups (e.g., a US group and a separate group for EU employees).

Rotate employees in and out of the group regularly–no one should serve for more than year.

Finally, avoid the temptation to pad the focus group with your friends. For one thing, your friends probably don’t need a special, structured program to help them provide feedback to you; they already know where to find you. But also, your friends may not feel comfortable giving you the open, honest feedback that you need.