Pay People Right!: Breakthrough Reward Strategies to Create Great Companies / Edition 1

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Not since the authors' pioneering book The New Pay revolutionized total pay has there been a book that clearly describes the crucial link between a company's reward solutions and its business goals. Now, as today's companies push to improve their effectiveness and compete globally, Zingheim and Schuster reveal how total rewards provide a unique and practical advantage to those organizations with the foresight to pay people right. Pay—including base pay, cash incentives, stock options, and recognition—can be a powerful and positive way to communicate and gain commitment to values, directions, and business priorities. Total rewards integrate total pay with a compelling future, individual growth, and a positive workplace to create a win-win partnership between the company and its workforce that enhances effectiveness and advances overall business objectives. Pay People Right! shows readers how. Based on the authors' extensive consulting experience and research, this practical guide defines six essential principles for building integrated rewards that will help companies tackle their most critical business opportunities: attracting and retaining scarce talent, expanding globally, improving mergers and acquisitions, focusing sales professionals, developing teams, and aligning executive and workforce pay. Pay People Right! builds a business case for improving existing rewards and gives companies readily usable tools for successfully implementing pay change. It also provides a host of examples of how companies, including many in the Fortune 500, use rewards to engage people and enhance performance.

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Editorial Reviews

From the Publisher
"A thoroughly up-to-the minute explanation of the best thinking on pay practices by two extraordinary well qualified experts. What could be of greater value? At last a readable book that provides answers to today's trickiest pay issues." —Jack Zenger, president, PROVANT Inc., and co-author of Results-Based Leadership, Leading Teams, and Self-Directed Work Teams

"Zingheim and Schuster have done it again! They have produced a second must-read book on pay. Pay People Right! is full of useful information about how to create and manage pay systems that fit today's organizations. More than just a how to do it approach, it provides a business basis for the development of key pay strategies which can provide a competitive advantage." —Edward E. Lawler III, director, Center for Effective Organizations, University of Southern California, and author of From the Ground Up and Rewarding Excellence

"Pay People Right! offers practical, forward thinking, and useful advice on how to design and deliver compensation systems to get results. The book has been invaluable to me in clarifying my thinking and is a must read for managers, HR professionals, consultants, and others who craft reward systems. I use it in teaching our executive program." —Dave Ulrich, University of Michigan professor, author of Human Resource Champions, and co-author of Results-Based Leadership

"Zingheim and Schuster have written a first-rate book on reward systems. It is reader-friendly, original and practical. What's most impressive is how they demonstrate the effect of pay on mergers, team performance as well as performance measures in general plus providing some useful lessons on pay systems during times of hyper-turbulent change. If the lessons of this book are thoughtfully applied, improved organizational effectiveness will follow." —Warren Bennis, Distinguished Professor of Business, University of Southern California, and co-author of Co-Leaders

"Pay People Right! is a must read for those who wrestle with the dynamic and critical challenge of using pay to help get better results from the workforce. It provides practical solutions for achieving a balance between workforce fulfillment and peformance." —Jon R. Katzenbach, founder of Katzenbach Partners LLC, author of Teams at the Top and coauthor of The Wisdom of Teams

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Product Details

  • ISBN-13: 9780787940164
  • Publisher: Wiley
  • Publication date: 1/1/2000
  • Series: Jossey-Bass Business and Management Series
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 416
  • Product dimensions: 6.42 (w) x 9.11 (h) x 1.40 (d)

Meet the Author

JAY R. SCHUSTER are partners in Schuster-Zingheim and Associates, Inc., a pay consulting firm founded in 1985 and located in Los Angeles. They consult extensively on total rewards with companies in the U.S. and throughout the world, and are frequent speakers to business and professional groups. Their web site is

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Table of Contents

Preface The Authors
Part 1. Intergrating Rewards
1. Total Rewards and the Six Reward Principles
2. The Business Case for Changing Rewards
3. Integrating Total Pay
4. Measuring and Managing Perfornance
Part Two: Pay Tools: Accelerating Acheivement of Business Goals
5. Rewarding Individual Ongoing Value: Base Pay
6. Building Infrastructure for Base Pay
7. Rewarding Performance: Short-Term Varialbe Pay
8. Rewarding Performance: Long-term Variable Pay
9. Recognition and Celebration
Part Three: Addressing Critical Business Opportunities with Rewards
10. Rewarding Teams
11. Rewarding Scarce Talent
12. Rewarding the Salesforce
13. Rewarding Executives
14. Merger and Acquisition Rewards
15. Global Rewards
Part Four: Moving Foward
16. Making Rewards Work
Epilogue: 21st-Century Rewards Notes Index

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First Chapter


companies as IBM, K-Mart, General Electric, AT&T, General Motors, Apple, Xerox, Advanced Micro Devices, Owens Corning, Westinghouse, and Disney would need to reinvent themselves to remain
viable? Some of these enterprises met change and adapted; others are still struggling.
Pay is a powerful communicator of values and directions. We believe it must be aligned with the business so it delivers the proper messages effectively. Pay too often makes an unfortunate statement of shortage-or plenty-when neither really exists. Aligning pay can be truthful and positive, and give both the workforce and the firm something to celebrate. We intend to show how pay can present an honest picture to people about what's expected and how this benefits them and makes them winners as partners of the company.


-- to do better as a result of making their company a success than they can do if pay is not changed. Our message is that a better opportunity and better deal not only are possible but should be a measure of success that the enterprise applies to make itself a more successful employer, a better performer, and a place where people want to work.



Chapter 1: Total Rewards and
the Six Reward Principles

Chapter 2: The Business Case
for Changing Rewards

Chapter 3: Integrating Total Pay
a firm's competitiveness in the labor market. However, we narrow our focus to address the importance of each element of total pay for what it does best. It's clear that some elements of pay are best suited to emphasizing the value the individual adds to the organization. Others are best for recognizing results at the individual, team, group, business-unit, or company level; and still others do best when focused on supplemental rewards that are not directly related either to results or added value. This chapter reviews the possible pay elements and how and why some alternatives do things better than others. We discuss how to allocate pay dollars effectively to the total pay elements, to be consistent with the business case for changing rewards.

Chapter 4: Measuring and Managing Performance

Chapter 5: Rewarding Individual
Ongoing Value: Base Pay
(3) the individual's value relative to the labor market. Ongoing value takes a broader perspective than just one year's performance; one year's performance can be meaningfully rewarded through variable pay or lump-sum payments. We show examples of how companies may emphasize one dimension over others and how they integrate the ongoing value of base pay with other pay elements.

Chapter 6: Building Infrastructure for Base Pay

Chapter 7: Rewarding Performance:
Short-Term Variable Pay
be successful and how to keep it refreshed. We propose short-term variable pay as a general approach to rewarding workforce results and suggest why it's such an important and powerful reward tool.

Chapter 8: Rewarding Performance:
Long-Term Variable Pay

Chapter 9: Recognition and Celebration

Chapter 10: Rewarding Teams

Chapter 11: Rewarding Scarce Talent

Chapter 12: Rewarding the Salesforce
an unaligned selling capability that involves merely convincing customers to buy products and services. Although sales compensation is the subject of entire books, we believe in closely integrating the sales and marketing workforce into the company workforce. This chapter addresses the issues of sales rewards and argues for this strategy of inclusion. It discusses the changing role of the salesforce and how to construct pay to take advantage of changing designs and objectives in sales organizations. Increasingly, the selling process needs to be integrated with the overall business of the enterprise; we suggest how effective pay can support this.

Chapter 13: Rewarding Executives

Chapter 14: Merger-and-Acquisition Rewards

Chapter 15: Global Rewards
business is critical. This chapter really tests the enterprise's ability
and willingness to communicate consistent values and directions throughout its global workforce. We propose that a company's total reward strategy and consistent set of reward principles are important everywhere a company does business. We suggest how to implement the principles from a global perspective. During times when local taxes, local government regulation, and local pay practice strongly influence how pay is delivered, we describe how to apply the strategy and principles understandably and with local relevance. How to get the message through to people in New York and Singapore, or in Los Angeles and Mexico City, is a challenge many firms face; we suggest some possible ways to do this effectively.

Chapter 16: Making Rewards Work
at the end. This chapter tells you how to ensure lasting business value for a pay solution you've worked long and hard to develop. If a company is unable to communicate the logic of a pay change and educate people on what it takes to be successful to gain workforce understanding, acceptance, and commitment, the entire process is at risk. Unless a new pay solution is implemented and engages people, nobody gains from it. We emphasize workforce involvement and strong communications and education. Without them, effective change in pay is unlikely. This chapter addresses the communications, implementation, and continuous-improvement process and how best to communicate new pay solutions, implement pay change effectively, and provide lasting value from designing pay solutions through continuously keeping them reflective of what's going on in the business.


November 1999 JAY R. SCHUSTER
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