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Microsoft's decision to eliminate stock options and instead award stock grants to its 50,000 employees reflects the same phenomenon: fear of a brain drain. Microsoft is maturing into a slower-growth company and must retain its "institution builders," says Ed Lawler, a business professor at the University of Southern California. "The company needs to attract more people who aren't as risk oriented." A recently hired Microsoft techie says getting restricted stock (with cash value) will encourage him to stay: "People like me who suffered through the dot bomb don't care as much about options."
B-team proponents say many companies need to rethink their up-or-out mentality. Beverly Kaye, a human-resources consultant, says companies should work with employees to identify lateral moves within the firm that will keep workers inspired. Too often, she says, workers who may not want to move up or don't have the talent tend to be forgotten. "If you want to light the fire under them, a lateral move can do it," she says.
Other experts warn companies to think twice before they try to cut costs by scaling back such family-friendly perks as flexible work hours and on-site day care. B teamers value those benefits, which have helped ease the pain of pay cuts. At the same time, personnel experts say, senior managers need to do a better job of informing people at lower levels about how they mesh with the company's overall strategy. Says management consultant Byron Woollen: "Workers feel disenfranchised if they're not personally informed about how their contributions fit into the company's overall strategy and goals."
And small niceties still count. With their resources stretched thin, senior managers often fail to write a simple thank-you note to an employee for a job well done, says Vijayaraghavan, a consultant with Katzenbach Partners in New York City. She has found that "managers are so busy putting out fires, they don't talk to their middle reports for a year." And when better jobs appear elsewhere, they may no longer be talking to them at all. --With reporting by Laura Locke/San Francisco