RESEARCH ANSWER
Reward systems make a deliberate choice between individual competition and shared outcomes.
Questions
How do companies design bonus systems?
Who uses profit sharing instead of individual bonuses?
Which behaviors do bonuses encourage?
CROSS-COMPANY SYNTHESIS
Evidence-linked practices
Share profits through three components
Buffer reports distributing a $377,005 pool, 15% of 2025 net profit, to 75 teammates. The formula allocates 40% equally, 40% by salary and 20% by tenure. Payments were zero in the loss years 2022 and 2023.
Buffer 7th Profit ShareSustained impact over bonuses
Long-term effectiveness and strong fixed pay are preferred over short-term target bonuses.
Bending Spoons PrinciplesTenure-based profit sharing instead of stock options
Each year 37signals shares 10% of company profits with employees. Everyone with two years of tenure takes part; one share accrues per month from the second anniversary, and accrual stops at ten years. The payout is made in cash after the previous year’s books close, usually in March. According to Jason Fried’s October 2026 LinkedIn post, the program has paid employees more than $24 million since it began in 2020; the company has never offered stock options.
37signals Handbook — Benefits & Perks