Stock options are commonly used as an employee benefit in many companies, especially startups and tech firms. They act as an incentive for employees to work towards increasing the company's stock price. By offering stock options, companies align the interests of employees and shareholders. Employees can purchase stocks at a set price (the 'strike price') after a vesting period, potentially benefiting if the company's stock price rises above this price. However, stock options also carry risks, as their value is tied to the company's performance and market conditions.