Menno S. Martin Contractor Ltd. in St. Jacobs, Ontario, had a profit-sharing plan for years. In 2004, when president Laverne Brubacher went into semi-retirement, he came up with a formula to scale back his salary and distribute more profits among his 17 staff members. The plan paid off for the company as well as the employees.

The company's annual sales volume averages $2.6 million to $2.9 million. When profits reach $100,000, Brubacher applies the profit-sharing formula. He splits a percentage of the profits between his two design/build managers, who run the company's day-to-day business. He distributes another portion of the profits among his remaining 15 employees. Bonus percentages increase with the company's profits, as detailed in the chart below.

When he revamped the profit-sharing plan, Brubacher also worked with his staff to come up with a shared vision, mission, and set of core values for the company. The strategies enhanced employees' understanding of how their individual roles and responsibilities affect the bottom line and made them more focused than ever on doing the best job possible for the company and its clients. “This allows them to make decisions in the field based on the values that they helped establish,” Brubacher says.

—Victoria Downing is president of Remodelers Advantage, Laurel, Md. 301.490.5620.