What are Restricted Stock Units?
Restricted stock units, or RSUs, are shares of company stock granted to employees as part of their compensation. Employees receive the shares fully only after meeting specific requirements, such as working for a set period or achieving performance goals. RSUs are important in HR because they help attract and retain talent while aligning employee interests with company success. They fit into the employee lifecycle mainly during recruitment, performance management, and retention phases.
How RSUs Work in the Workplace
RSUs vest over a defined schedule or after achieving designated milestones. Once vested, employees own the shares outright and can choose to keep or sell them. Before vesting, employees cannot sell or transfer the shares, as they do not yet have ownership rights.
RSUs in Recruitment and Retention
Employers use RSUs to attract skilled workers by offering future financial incentives. They also encourage employees to remain with the company longer by rewarding loyalty and performance. This creates a stronger alignment between employee efforts and company goals.