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Pay People Right! Breakthrough Reward Strategies to Create Great Companies
by Patricia K. Zingheim and Jay R. Schuster
Jossey-Bass, January 2000

Pay People Right!To order, contact Jossey-Bass Publishers, Amazon.com, or Barnes & Noble
ISBN 0-7879-4016-X hardcover

Read more about Pay People Right!


Book Review
by Linda J. Salokas
Director of Strategic Growth, Amazon.com

In Pay People Right! Breakthrough Reward Strategies to Create Great Companies, Patricia K. Zingheim, Ph.D. and Jay R. Schuster, Ph.D. have created a strategic, but very practical, business approach to the importance of including pay as an element of the business planning process. This book goes beyond the compelling "total compensation strategy" story told in their first book, The New Pay: Linking Employee and Organizational Performance. It addresses the broader context of "total rewards strategy," which includes the entire workforce experience and the "better workforce deal." It shows the importance of building an effective business case for changing rewards to match business goals. It is this comprehensive treatment of total rewards and how they can influence strategic business alignment that makes their approach truly breakthrough.

The authors discuss how pay can be positioned as a primary communications element of business performance. They describe the value of pay as an "accelerator pedal" to speed up the achievement of business goals and to facilitate the change management process. While traditional change management theories have espoused pay as a supporting element of change, Zingheim and Schuster emphasize the ability of rewards to lead change by serving as powerful symbols and enabling people to share in the success of their businesses.

One of the greatest values of this work is the framework set out in Chapter 1, "Total Rewards and the Six Reward Principles." It provides a clear context for the pay tools and design strategies that are detailed in subsequent chapters. The six reward principles are truly contemporary. While most will look somewhat familiar, there are important messages in each that target the new challenges faced by companies today and anticipated as we enter the new millennium. For example, Principle 1, "create a positive and natural reward experience," recognizes the changing expectations of the workforce and the importance of education and involvement in gaining acceptance and commitment from the people affected by changes. It is here where the authors introduce their definition of the components of total rewards and the "better workforce deal." These are powerful concepts that transcend business sector and stage of maturity. They apply to traditional manufacturing as well as e-commerce companies, to start-ups as well as long standing businesses.

For the practitioner, Pay People Right! provides excellent tools for designing and integrating total rewards. Each pay tool is described and its specific purpose in the overall total reward scheme is defined and supported by examples from companies where it has been demonstrated to be effective. Zingheim and Schuster introduce a new way of thinking about using base pay to reward a personís ongoing value that is based on competencies, market value, and performance over time. They provide an outstanding explanation of alternative infrastructures for pay, including the market pricing, traditional grades and salary ranges, broad bands, and career bands. Short and long-term performance reward vehicles are detailed with a focus on the integration and alignment with other elements of the total reward strategy and business and individual performance processes. The treatment of stock options is particularly effective in that it recognizes the evolving role of stock options in many companies. The authorsí discussion of the application of stock option programs with variety of design characteristics and to diverse workforce groups reinforces the notion that this element of a total reward strategy can be creatively designed and aligned with core business and people strategies. Finally, recognition and celebration tools, often neglected or undervalued as part of total compensation, are presented as part of total rewards and the better workforce deal.

Pay People Right! identifies several hot, recently emergent opportunities for total rewards programs to make a big difference to business success. Each of these topics is addressed in some depth with practical ideas for pay solutions that are linked to the six reward principles and the integrated rewards approach. They include reward strategies for teams, scarce talent, mergers and acquisitions, sales professionals, and executives. The authors also devote an entire chapter to global pay. They point out that with the growth of a global economy comes the emergence of a global workforce. Total reward strategies are, therefore, becoming more global and less industry-specific. They make a compelling case for consistent global guidelines for pay that translate locally yet retain the flexibility to accommodate local cultures and laws.

Zingheim and Schuster leave us with predictions about pay in the 21st century in the context of "moons in alignment." They contend that the "moons" of economic change and human resources change are aligned, which will foster "more positive and enlightened total rewards." That is great news for those of us that continue to be interested in company and human resource alignment, growth, and success. Pay People Right! is the book that will help us get there. It is a practical book that is easy and enjoyable to read.

 

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