All productive employees are valuable to the organization. If you haven't fired them, there's a good reason (or there should be a good reason!). Showing an employee they're valuable to your company, though, requires some care. The worst thing you can do is show you really don't care about them.
Take, for example, my first startup experience, BravoCom. A very small, self-funded (debt financed) web consulting firm, the company hired me into a group of about 20 employees, many of whom, like me, were just out of school, or otherwise junior (1-2 years' experience). We did the bulk of the actual delivery work; we were the coders, the HTML "monkeys" (this was back in the day when the average engineer didn't actually know anything about HTML, so having people do nothing but content was actually fairly lucrative). We entertained some fairly high profile customers for some fairly large installations (nothing compared to what I've done recently, but I was green, and so was the field).
Given that most of us were very junior, none of us really had any startup experience, and my guess is, neither did the president/owner of the company. We were getting fair, but sub-average wages, with few benefits, for the first six months or so that I was there. It wasn't until after probably the first year, after some more experienced people came on, mostly in sales/marketing, that a stock option plan was demanded (the idea of not having stock options in a startup like that is unbelievable to me now, after having seen how startups are done in the Valley...)
Little did we know, the plan was a joke. The president "made up" some valuation, and set the options at $2 a share (again, in hindsight, fairly unbelievable), and doled them out. We were told the plan was to IPO, and skyrocket, much like Cambridge Technology Partners (CTP) did. We were shown pretty graphs that, in four years, after the IPO, our stock price should be at X dollars. I did the math, and I would stand to make about $96k, at that rate, which, for being a year out of school, sounded really great.
It wasn't until later I did the more important math -- that was $96k over four years, and only if things "went to plan". That was only like $24k per year -- and that was almost doable in salary if I thought to look (and salary would, of course, be fairly guaranteed, compared to this "plan").
The company was sold about a year later, for about $10 million. Again, to all of us newbies, this sounded like a huge amount of money. We realized that the president of the company, who retained 51% of the stock options he "created", pockets $5 million by signing on the dotted line. We learned that the deal ended up valuing our shares at $1.67 -- less than our exercise price. We were truly screwed over by the deal.
It quickly came to light that people were starting to look for other work. This should've been a huge red light to BravoNet, who acquired us; they were purchasing a consulting firm -- we had no product other than our team, and they were looking to leave. The president quickly put together a "bonus plan". If we made our sales goal, some $1.67 million by the end of the first year after acquisition, any profits beyond that point, up to some other number (like $2.3 million or something), would be put towards a profit-sharing pool, and we would receive a share of that based on a number he gave out to us in envelopes.
Of course, those numbers didn't stay private. I got 10 shares, which, at best, worked out to something like $7k -- a "bonus" I could easily get by jumping ship to another company and getting more than that in a salary increase. What's worse, though, is that it came to light that there was an obvious pattern in the numbers. Engineers with "senior" in their title got 30 shares. Anyone with "management" got 30, and if you had both "management" and "senior", you got 50.
So the sales guy who had been hired a week before the acquisition stood to make three times as much in "bonus" as I did, as an engineer, who'd been there for two years. To make matters worse, there had been some fairly significant turnover in those two years. The longest running employees at that time were: The president, an HTML "monkey" who started a week before I did, and then me. Both me and my HTML friend were getting the lowest amount of share out of the entire company (well, there were others similarly fucked over, but we all tied for most screwed). This was insane. I talked my manager, she knew it was nuts, and apparently that weekend, the upper tiers of management (who, it also came out, had secretly renegotiated their stock options to $1 per share, so they were going to get a 66% profit off their stock options to begin with) cornered the president at his house and determined they should work together to figure out a more equitable split.
The next week, we got a new share plan, and the maximum bonus was written down. They decided to base the shares on three things (and made the mistake of explaining this to everyone): One, the number of months they'd been with the company, to compensate those who'd been here the longest. Two, their title, because apparently it was still thought that the more senior you were, the more valuable you were (a dubious argument, but an understandable concept). Three, a discretionary award for extraordinary contributions to the company. My $7k max bonus was suddenly $22k. Much better, but again, not much beyond what I could get with a decent raise from another company.
I did the math, then, and found that I had not received *any* discretionary award. I was irate. I had saved the company's ass on several accounts over the past few years; I pioneered the engineering methodology process that was actually sold as a "service" to customers and upped the average bill to customers -- and made them happy to pay it. It was impossible that I should receive nothing for that.
I stormed into the president's office. I yelled at him, something along the lines of "What the hell is wrong with you?" He looked clueless. "No discretionary award? After everything I've done for this company? Are fucking shitting me?" He gave me some asinine answer about "If you think there's a mistake..."
A day or two later, I was "awarded" another $2k in maximum bonus, and given the excuse, "After we counted your time with the company, your total was so high, we forgot to give you anything else." Utter bullshit, and you could tell. I immediately started looking for work, and after not getting jobs at pre-IPO Real and pre-IPO Amazon (which in retrospect, really sucked), I ended up at CharlieNet, in Silicon Valley. Which sucked in its own way, but on the up side, got me here, where it's been a fairly good, if adventurous, life of startups.
So what was the mistake made here? The president forgot that he was not the reason the company got where it was. Sure, he started it, and he paid us, but he lost sight of the reason why the company was bought -- the people. It's actually very interesting that the acquiring company, BravoNet, didn't seem to pay any attention to the fact that the president was losing employees left and right. I even contacted one of them to tell them the problems going on internally, to see if they were interested in intervening, to try to keep the employees they'd just bought and paid for, but got no response.
If the company had been producing a real "product", a shrink wrapped technology that could be sold by a larger company, the loss of employees might not have been a significant issue -- the value in the acquisition is in the technology and the product. But this was a consulting firm, no specific technology, no patented process, nothing but really good people doing really good work. Half of us left within the first six months. I eventually did get a check from "profit sharing", for about $4k, a year later. I got about a $23k raise when I went to CharlieNet (although the cost of living was quite a bit more, I still made out much better economically than staying).
I learned very early on, you need to treat your employees as valued members of your staff, because it doesn't matter who you are, your business does not succeed by your own will alone -- it takes a team.