Aligning Pay and Results, edited by Howard Risher
AMACOM, 336 pages, $35

Wharton professor Howard Risher understands that intrinsic satisfaction with a job is apowerful employee motivator. But it's not enough, he finds. Well-designed compensation and reward plans go a long way towardimproving worker satisfaction as well as performance, so that both employee and employer are winners.

The problem: Traditional programs, such as cost-of-living increases or across-the-board raises, offer littleincentive to improve performance and productivity.

One reason is an "everyone shares equally" philosophy of programs such as profit sharing. If everyoneshares equally, why work harder?

Gain Sharing

In the first essay of the book, Risher shows how gain sharing, which can be tailored for specific work groupsor operations, is quickly replacing traditional "umbrella" profit-sharing programs.

Another advantage to gain sharing: The payout is established in advance. Employees know what they willreceive if they achieve certain well-determined goals. Profit sharing is based on after-the-fact profits.

Skill-Based Pay

Better attempts are also being made to reward a person's capabilities, not job description.

Rewarding the job (no matter who was in that position) worked in the past when organizations divided upall tasks into specific jobs. But now, write N. Frederic Crandall and Marc J. Wallace Jr. in "PayingEmployees to Develop New Skills," the job has been replaced by a role that "has much vaguer boundariesand requires greater depth and breadth of skills and abilities."

Compensation must reflect the value of the person, especially one acquiring new skills.

A Range of Programs

In-depth and specific, these 14 essays by top compensation consultants introduce and explore a rangeof incentive-based pay programs. Recommended for managers looking for solid compensation options linkedto performance.

Copyright 1999, Executive Book Summaries