"...don't focus exclusively on profits. Many innovations... [are] cost reducers" I agree and I like your idea of also covering cost reduction efforts in profit

"...don't focus exclusively on profits. Many innovations... [are] cost reducers" I agree and I like your idea of also covering cost reduction efforts in profit sharing models. It is undoubtedly easier for companies to swallow a significant cash payout to an employee when they are receiving a large corresponding cash infusion resulting from sales of a developed idea. Following implementation of an efficiency improvement, understandably, as time passes companies tend to only see the current bottom line as the norm vice seeing "what could have been". You can project a companie's profitability over time and use this as a basis for a cost savings award. However, increased uncertainty with time makes it difficult to validate the truth behind estimated savings calcs (i.e. what is vs. what could have been). For example, if I intoduce a cost savings initiative instructing my customer to switch from diesel to LNG fuel based on the price of the fuels today, then next year diesel prices unexpectedly plummit, at the one year mark the initiative actually became a cost increaser. Thus, any award based on annual projected savings will also need to factor in the diminished value as a result of uncertainty. Cost savings projections are non-deterministic. I guess my point is that I think cost savings sharing is much more complex than a profit sharing, in which you simply take a cut of any profits (albeit a significantly smaller portion since the company is assuming the development/commercialization risk) that roll through the door. That said, I could see cost savings awards as a one-time award based on the agreed upon value at a given time, rather than an ongoing profit sharing program that pays out until the product is no longer profitable.