High performance companies nurture an environment wherein key employees think like owners. They realize that this is accomplished by communicating the company's vision, establishing a clear strategy, setting appropriate expectations and then creating rewards programs that align with those elements. This is most commonly achieved through long-term incentives. Two examples are as follows:

Performance Unit Plans (PUP)
These plans award performance units to individuals based upon their personal results (and/or team performance) in the organization. The units have a "par" value that goes up or down over time based upon company performance. The units mature in three to five years and are paid out as a cash bonus at that time-hopefully at a substantially increased value from their origination date.

Phantom Stock Plans
A plan of this type is designed for companies that do not want to issue real stock but want to simulate that effect. Under a phantom stock plan, individuals receive "phantom" shares that are not real stock, but are valued similarly. These shares are issued based upon individual performance and can be tied directly to the company's value or to a formula of the company's choosing. Phantom stock plans are designed to mature after five or more years and are effectively a kind of deferred compensation plan tied to the value of the business.

For more information on PUPs and Phantom Stock plans, see the Information and Resources section of this website.