What are the current trends in compensation and rewards? How does research support, or challenge, prevailing practices? How can teams, as well as individuals, be meaningfully rewarded for performance? Is money everything — what about the non-financial aspects of work satisfaction and motivation?
Several recent books help with these questions.
By Edward E. Lawler III, 327 pages, Jossey-Bass (2000). At bookstores or Wiley Canada, 1-800-567-4797, www.wiley.com
Edward Lawler, a leading management academic and prolific author, says “This book is based on the premise that to capture the full power of a reward system in today’s competitive environment, organizations need to focus on rewarding excellence in all areas.
Outstanding individuals need to be highly rewarded because they are worth more and because rewards for performance are motivating. Teams need to be rewarded for their performance as well, and in many cases stock and bonuses for company performance should be given to all employees.”
Some of his key themes:
•old reward systems, which focus on jobs and merit pay, don’t do an adequate job of developing and motivating either individuals or organizations;
•reward systems should reward individuals for developing their skills and abilities as well as for their performance; and
•to attract, retain and develop the right mix of talent, it’s vital to pay individuals rather than jobs, and focus on the individual’s market value.
Specific chapters deal with job and seniority-based approaches, rewarding individual performance, rewarding team excellence, appraising performance and creating high-performance organizations. Along the way, readers will discover Lawler’s views on variable pay systems, bonus plans, commissions, skill-based pay and 360-degree methods.
A chapter on strategic reward system design describes the development of an organization with the capabilities and competencies necessary to execute its strategy, and motivating people to use those capabilities and competencies.
Examples are drawn from a broad range of companies including Xerox, Hewlett-Packard, IBM, Boeing, GE, AT&T and Allstate.
By Glenn Parker, Jerry McAdams and David Zielinski, 211 pages, Jossey-Bass (2000). At bookstores or Wiley Canada, 1-800-567-4797, www.wiley.com
This title will catch the eye of many line and HR managers for the reason stated on the book’s cover jacket: “Work teams have become an essential part of business in almost every industry, yet most companies still rely on outmoded compensation systems geared only to individual performance.”
The book examines a range of six types of payouts to people, from those that represent a cost of doing business to those that provide an investment in results:
•base compensation and benefits;
•project team incentives; and
•organizational unit incentives.
Some 27 case studies profile team reward and recognition plans at organizations like Merck, Chase Manhattan, Lotus Development Company, Bayer, Rockwell Automation and Ameritech.
Compensation in Organizations: current research and practice
Ed. by Sara Rynes and Barry Gerhart, 418 pages, Jossey-Bass (2000). At bookstores or Wiley Canada, 1-800-567-4797, www.wiley.com
This book, published by the Society for Industrial and Organizational
Psychology, is intended, “to encourage greater understanding of and interest in compensation issues among psychologists and human resource researchers and practitioners.”
Highlights of part one include papers on compensation, attraction and retention and psychological research on determinants of pay.
Part two features papers on compensation strategy and organizational performance, the changing nature of work and its effects on compensation design and delivery and rethinking compensation risk.
This book will appeal to HR and compensation professionals with advanced understanding and interest in research and the theoretical and behavioural underpinnings of compensation trends, approaches and practices.
By Richard Chang and Mark Morgan, 162 pages, Jossey-Bass (2000). At bookstores or Wiley Canada, 1-800-567-4797, www.wiley.com
Here the focus is on performance — “measuring the right things in the real world” — rather than on compensation per se. Fictional manager Vince Sharp and his SolvNET team move through the six steps of the Performance Scorecard method:
•collecting the many kinds of data to define the “right” measures;
•creating the scorecard design to support key result areas;
•cultivating through systematic reviews and refining objectives;
•cascading via work group scorecards and aligning objectives and measures;
•connecting individual efforts with organizational goals; and
•confirming measures and reducing clutter of non-value adding reports.
The scorecard aims to help employees focus on business priorities, eliminate obsolete or irrelevant measures and align efforts toward business objectives.
The authors admire Kaplan and Norton’s Balanced Scorecard model and propose Performance Scorecards as an approach incorporating the same advantages, but with added flexibility.
With Performance Scorecards, management defines the number and the names of measurement categories to fit the organization’s particular strategies.
Bringing Out the Best in People
By Aubrey C. Daniels, 245 pages, McGraw-Hill (2000). At bookstores or 1-800-565-5758, www.mcgrawhill.ca
Subtitled “How to apply the astonishing power of positive reinforcement,” this new edition of the 1994 book contains much of the same content but with new chapters presenting new information on the workforce, education and applications of behavioural analysis research in business, performance, safety and motivation.
Several chapters provide a primer on the basics of reinforcement theory, both the scientific basis and workplace implications:
•behaviour is a function of its consequences;
•the high price of negative reinforcement;
•decreasing behaviour by doing nothing; and
•effective delivery of reinforcement.
Other sections cover performance feedback, measurement, building quality through consequences, teams and empowerment, compensation and performance appraisal.
Examples and practical pointers round out the comprehensive discussion of many facets of the topic.
Managing with Carrots
By Adrian Gostick and Chester Elton, 111 pages, Gibbs Smith (2001),
This little book, a speedy read, is subtitled “Using recognition to attract and retain the best people.”
The authors, executives at the O.C. Tanner Recognition Company, use the carrot theme — from seeds to harvest — to illustrate how effective employers build employee loyalty and commitment.
They advise: “Use the book to create your own plan for rewarding employees, and watch attitudes change. Let the experts guide you through the steps to rewarding employees for actions that support your company’s goal — without spending a fortune.”
Implementing Global Performance Measurement Systems
By Ferdinand Tesoro and Jack Tootson, 154 pages (2000), Jossey-Bass Pfeiffer.
At bookstores or available from Wiley Canada,1-800-567-4797, www.wiley.com
The authors hold positions at Dell University, Dell Computer Corporation. They present a “cookbook approach” to the steps involved in designing and implementing a performance measurement system.
Major sections in the book:
•establishing the business case (cost-benefit analysis, communication and marketing plan);
•identifying the right performance metrics (scorecard approach, departmental and functional metrics, baseline and target levels);
•implementing the performance measurement system (tracking data, communicating results, technology checklist); and
•leveraging results to improve performance (using line graphs, cause-effect diagrams and scatter diagrams).
The book and accompanying CD-ROM provide customizable templates, tools, job aids and models for adaptation by readers for their own purposes and business environments. The CD also includes a case study covering step-by-step implementation of a performance measurement system.
Intrinsic Motivation at Work
By Kenneth W. Thomas, 143 pages, Berrett Koehler (2000).
At bookstores or 1-800-565-5758, www.mcgrawhill.ca
Kenneth Thomas is a management professor who has done long-term research and developed a framework of four building blocks for intrinsic work rewards: a sense of purpose or meaningfulness, choice in how tasks are performed, a sense of competence and a sense of progress.
Key principles include:
•people care about more than money and self-interest at work;
•intrinsic motivation involves rewards you are getting right now;
•intrinsic rewards are about emotions; and
•doing “the right thing” makes people feel good.
The book gives readers a thought-provoking discussion on the importance of purposeful work.
The premise is that extrinsic motivators — pay, benefits, status, bonuses — are not sufficient in a workplace that has moved from a compliance model to partnership, empowerment and self-management.
Ray Brillinger is a senior consultant with the IBM Consulting Group. He provides change management, business transformation and organization effectiveness services to client organizations. He can be reached at (905) 316-4646 or email@example.com.