Line employees' animosity toward management feeds off suspicions that, come bonus time, the fat cats will skim the cream off the top. Remediation Technologies (also known as Retec) dispels that notion by rewarding low-level employees first. Each year, 20% of pretax profits at the Concord, Mass., environmental-engineering firm goes into a profit-sharing pool. Before the company pays any bonuses out of that pool, it funds a 100% match for employee contributions to its 401(k) plan, up to 6% of salary. (The 100% match for the first 3% is written into Retec's budget as overhead.)
Any money that remains in the profit-sharing pool goes toward bonuses, but managers must wait their turn. First, Retec rewards line employees with performance bonuses on three scales -- good, better, and best, president Robert Dunlap says. Those bonuses have averaged 3% of salary. Retec employs 240 people, 42 of them associates or principals who already get company stock and stock options as rewards. But in some years, when line workers received bonuses, those higher-level employees have not enjoyed bonuses.
Dunlap admits that no bonus system keeps everyone happy. "I've tried everything. There's never enough money, and there's always some degree of disappointment." But paying from the bottom up emphasizes the company's egalitarian culture. Open-book management reinforces the message. Once a month, at one of the company's weekly meetings (which any employee may attend), Dunlap shares financials, which include a line item for the profit-sharing pool.* * *