Many companies reimburse workers for classes related to their employees' jobs. Such programs help companies develop experience in-house, instead of buying it outside. Ultrafab takes the policy to an extreme. The Farmington, N.Y., manufacturer of weather stripping covers all college expenses for all employees, regardless of the field of study -- from music appreciation to taxidermy.

Fifty-three of Ultrafab's 102 employees are enrolled in some type of class, and, in fact, the overwhelming majority do study in work-related fields, particularly engineering and business. But reimbursing for other classes helps John Hannux, vice-president of human resources, peddle the program. "Often employees will discover that going back to school isn't the worst thing," Hannux says, "and they'll switch to a job-related study or enroll in a degree program." Five employees are now working toward their master's degrees at nearby schools, which include Rochester Institute of Technology and the University of Rochester.

The company spends about $40,000 annually on tuition, books, and supplies. That generosity breeds loyalty; although big companies in nearby Rochester offer higher wages, Ultrafab's employees stay put because they appreciate the perk. Turnover is next to nothing.

But reimbursement can backfire, as it has at Universal Engraving, in Overland Park, Kans. In the past the engraver paid for in-house seminars and courses at a local community college. To offset the cost of training, it paid slightly less than its nearby competitors did. Employees would work for Universal for a few years, learning at the company's expense, and then jump to a company that paid more. "I was functioning as a free university," CEO Glenn Hutchison says. "And if Johnson County Community College can't make a profit at it, I sure can't."

Instead, Hutchison is considering an apprenticeship program, in which experienced workers would earn extra money by teaching their skills to the new employees off the premises after work. Apprentices would pay instructors' fees.

Ultrafab, which instituted its program more than eight years ago, never had Universal's problem. What's the difference? Local economic factors may contribute, but there's also a difference in attitude. Ultrafab considers reimbursement an extra; Universal considered it part of compensation. That's perhaps more realistic, but for employees it forced a choice between education and pay, and they voted with their feet.