Share The Wealth Employee compensation plans that pay off.

As Pat Byrnes studied the financials for his company, ActuarialConsultants Inc., he could not escape one disheartening fact:Profitability for his Torrance, California-based pension consultingfirm was slipping. "Expenses were going up, and profitabilitywas going down," says Byrnes, the company's president andco-owner.

The root problem: Year in, year out, employee salaries keptrising due to annual cost-of-living increases, but toughcompetition forced Byrnes to keep a lid on the fees he chargedclient companies. "So I drew a line in the sand and said,`There has to be a better way to compensate employees,' "says Byrnes.

Byrnes promptly found that way. He essentially told hisemployees there'd be no more pay increases unless there werecorresponding gains in productivity and profitability. "Thisfocused employee awareness on the fact that if we don't makemoney, they don't, either," says Byrnes, who introduced aplan that, in a nutshell, gives employees the opportunity to earnsizable bonuses--but only if the company prospers.