Should we put other employees on a payfor-

performance plan that somehow links their monthly or yearly pay to company sales? Why or why not? If so, how should we do it? Of all its HR programs, those relating to pay for performance and incentives are LearnInMotion.

com’s most fully developed. For one thing, the venture capital firm that funded it was very explicit about reserving at least 10% of the company’s stock for employee incentives.

The agreement with the venture capital firm also included terms and conditions regarding LearnInMotion’s stock option plan. The venture fund agreement included among its 500 or so pages a specific written agreement that LearnInMotion.com would have to send to each of its employees, laying out the details of the company’s stock option plan. While there was some flexibility, the stock option plan details came down to this: (1) Employees would get stock options (the right to buy shares of LearnInMotion.com stock) at a price equal to 15% less than the venture capital fund paid for those shares when it funded LearnInMotion.

com; (2) the shares will have a vesting schedule of 36 months, with one-third of the shares vesting once the employee has completed 12 full months of employment with the company, and one-third vesting upon successful completion of each of the following two full 12 months of employment;

(3) if an employee leaves the company for any reason prior to his or her first full 12 months with the firm, the person is not eligible for no stock options; (4) if the person has stock options and leaves the firm for any reason, he or she must exercise the options within 90 days of the date of leaving the firm, or lose the right to exercise them.