september 1989

You may not be getting the most out of your profit-sharing plan if your employees have to wait until the end of the year to see their money. "If you can give the reward closer to the time of the action, then you'll stimulate the right response," says Bob Shaw, CEO of Allied Plywood Corp., in Alexandria, Va.

Shaw doles out profit sharing, which can amount to as much as $13,000 a year, on a monthly basis. He claims it takes hardly any extra time to calculate -- and that his 80-plus employees work harder, need less super-vision, and are absent an average of only two days a year. "They police each other because they understand how the money gets into their pockets," he says.

"It's tough when profits fall," concedes Shaw, whose company's annual sales were just over $31 million last year. "It's a bit of a demotivator. Fortunately, employees also remember last month, when times were good."