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job starts off this hour in Dallas Texas Joe welcome to the Dave Ramsey show I appreciate you taking my call I have a question that kind of dovetails into your entree leadership section you had a couple days ago okay you don't mind sure so I have an aviation company that's kind of been an a one-man show for many years but in the last few years it's been growing and I've been hiring employees I'm up to four now so it's pretty small but here's the question how do I pay for in pay for performance like some of the areas of my company don't really have a performance that's hinged to a number as far as production or things in this nature how do I go about paying employees that it could be hinged to performance without having to open up my books to them and you know it's paying off a profit and it's so is there ever a time where you want to open up your books to the to your more trusted employees mmm well we do it several different ways here obviously where you you know I would put the I would put the receptionist on straight Commission if I can figure out a way I like everybody having skin in the game you know I love that you know straight Commission running my own business my whole life I don't even know how to think otherwise but there's a lot of people don't think that way so a couple things obviously you can do Commission's where there's something that's commissionable that's not really what you're asking about the second thing you can do as you get a little bit bigger you're not going to do it at this size now but I have several team members here that are trusted and are seeing the entire set of books but there are our top echelon of leaders there's a 15 or 20 of them out of 800 to give you an idea okay and they're paid off the bottom line they're paid as if they were partners some of them are paid off the bottom line of the business unit that they run for instance we might have an SVP of financial piece and whatever the net profits of financial piece are that SVP might get paid off of that hour operating board members here are paid like partners they're paid completely off the bottom line and there's 15 of them okay well there's not 15 off the bottom line but there's 15 operating board members it's a different type so the Ramsey family doesn't get paid the same way in that regard I don't understand your leftover not every month and every month we pay it out but but I have a hundred percent ownership but we just closed the books and your bonus is based on the profit of the company that's simple and we close the books each month you know by the 15th and we're closing by the 7th and payout on the 15th of the month following the that's a pretty complicated method and I really wouldn't suggest that with 4 people that'll drive you nuts ok kind of the more traditional thing that we do is we have profit sharing now one of the core values we have on the back wall of our conference center when we all meet twice a week and we talk about this out loud at least once a month one of the core values of this organization is we share the profits I believe in dancing with a girl they brought you you know and so if you're in here and you're killing it for 10 years you ought to be sharing in the profits more than somebody's been here 10 days but if you're in here and you're killing it we ought to share with you you know it's that simple I don't have a desire to make a bazillion dollars and nobody in this place be paid reasonable wages plus sharing in the profits so they're shared and they're sharing in the profits now what I do there is before all those other people get their split and before I get my split those people off the bottom line and a line item of expense in their P&L in our P&L is profit sharing and we just get to the bottom line of profits and we call it net profit won and before we get to net profit o which is the bottom line you know we take out an emergency fund percentage its funding retained earnings we take out a percentage for funding HR activities we take out a percentage for profit sharing so in other words every single month we take a percentage of our profits and set them aside to share with our team and there's guidelines on how that our sharing with the team we do not tell them what that percentage is in other words they don't know what percent I don't know what percentage of my bottom line I share with my team they don't know that but what we do tell them each month every single month from the stage in staff meeting is profit share profits last month that you're going to get a part of went up seven percent over the month before and 14 percent over this time last year okay which means profits are better so that that's probably going to mean good news oh by the way we have 14 new people in the profit sharing plan because you have to be here a year before you're in it okay and and so they've come through their year and now they're now they're in the profit sharing plan and so there's while profits have gone up there's more people eating at the table and so the average profit sharing check this month will go up by 2.4 percent and we tell them that and so if you know what you made last month you know you're gonna get a little bit more this month or profits are down this month because we didn't collect this item or we had this big expense come through on a server or we're moving to another building and we're having to pay for all that crap and it comes out of profits and so this month profits are down an average of this and we give them some indicators relative to where they were before but they do not know the percentage because I may adjust the percentage up or down of our profits that we allocate and there's no need in them by trying to back into what the profitability of the company is that is not it's a privately held company that's not a known fact right they've been with the company a long time or if they have a particularly valuable because they order the paid commensurate with the value to the company you know the Secretary's paid in less than a-- then a board member or something this measure well board members aren't in profit sharing they're they're eating off the bottom line anybody that's got a commissions in our case above a hundred thousand or if they're in leadership and they make above two hundred thousand they're not in profit sharing they're making plenty of money shut up you know this is for somebody this is for somebody who's it down here grunting it out and I want to be able to share with the receptionist I wanna be able to share with the live event producer that you know that this is making 60k I'd love for them to have another 10 or 15 K out of our profits that year and get them up way above market in terms of their total earnings but they don't have a way to do that because they're not on Commission right and so yeah but what they do want to pick up a piece of paper out of the out of the parking lot because if there's 800 of us dropping a piece of paper that means we have to hire another maintenance person and profits just went down so treat the freaking place like you own it you're self employed and you will keep the profits going up and therefore your personal wallet will be lined plus you have the pride of ownership of being part of a team that it has a sense of being self-employed so everybody self-employed we share the profits these are two of our core values they're both reflected in that whole system and that's how we do it and we've changed that over the years but that's you know the whole purpose here is a be generous with the people that are excellent B get rid of the people that aren't excellent