Incentive stock options are designed to encourage employees to do what?

Incentive stock options are specifically structured to align employees' financial interests with the company's stock performance. By providing employees the option to purchase company stock at a predetermined price, these options encourage employees to invest in the company and, ideally, hold onto their shares. This investment aligns their personal financial success with the overall success of the company, motivating them to contribute positively to its growth.

When employees are financially invested in the company's performance, they are likely to work toward enhancing the company's value, which can lead to stock price appreciation. The intention behind incentivizing employees to buy into the company's stock is to foster a sense of ownership and commitment, cultivating a long-term focus on the company's success. Therefore, the goal is not just about immediate compensation, but rather about creating a vested interest in the financial health of the organization.

The other response options, while they may have some relevance to employee engagement and productivity, do not capture the specific purpose of incentive stock options in the same way. Taking on more responsibilities, increasing productivity, or working longer hours may result from various incentives or company culture, but they do not specifically relate to the financial investment in stock that incentive stock options aim to promote.