Typically, the employee is granted the option to buy X shares of the company stock at a fixed, but low price, at some future date. As an example, the emp might get the right to buy 1000 shares of TGT at $50 per share, but only 1 year in the future. The idea is that the emp will work hard to make the company profitable so that they share price rises to say $75, and then they personally will get the gain of 1000 x ($75-$50) = $25,000.
This is a simplified example. You should read the fine print of any employee agreements and discuss with a manager to fully understand your case. And here is a hint - people who have these options are usually assertive types and negotiate hard to get them, arguing the fine points with management. So if you are in the dark, chances are you do not qualify.
Large companies will usually have a central Human Resources (HR) department. They handle employee benefits. You should direct your questions to them, since every company will have different benefits.
I was just recently hired, but i am unaware how employee stock options work. How do i go about enrolling into this. I am not even sure if my manager would know what im talking about if i asked he/her.
