The Free Press, Simon & Schuster, New York, 1996
It has been quite awhile since I reviewed a book on my blog. This would be a good opportunity since the book above was used as reference and companion to my guest lecture this afternoon at the Kulliyah Economics & Management Sciences, International Islamic University Malaysia at its main campus in Gombak. I spoke about an hour to a group of compensation management class, BBA(Business) final semester undergrads.
The boook was published in 1996 (13 years ago), a year just before the Economic Crisis that began in Asia. But even during that time, the Consultants, Merchants of Knowledge if you may, were upbeat about change and changing organisations; the same mantra we hear that catapulted Obama to the US Presidency.
The blurp on the inside front flap of the book read: ...in the rush to reengineer, implement TQM practices, from teams, and embrace other popular business strategies, most organizations have overlooked a critical component of successful change: how they pay their employees. Even though their responsibilities and corporate environments have undergone radical changes, most employees are still paid in the same ways they were paid twenty years ago. Thousands of companies still dole out annual merit increases and determine pay levels on the basis of employee's knowledge, length of service, number of direct reports, and rank on organizational ladder - values whose relevance has faded away in today's flatter, faster, more flexible business environment.
The HayGroup, which for the past forty years (50 now) has (as claimed) set the standard globally for effective pay strategies, has , in the book, this important issue - and once again has rewritten the rules for pay. People, Performance & Pay had also identified four most common organizational work cultures - functional, process, time-based and network - and explains how to align innovative pay policies with each.
The Global Economic Crisis that began in September 2008, triggered by the financial sector causing the demise of many classic global banks and insurance companies and soon afterwards by the automotive industry...is again changing some concepts of compensation strategy. People are not talking about compensation strategy in the usual sense per se, of a reward system as such, but how to get rid of employees to keep the company afloat! Having said that, compensation strategy is, to most of us, a critical determinant of organisational sustainability.
While it is desirable to benchmark against some of the best in the world (inorder for one to be globally competitive), I reminded these future HR practitioners and/or academics, that one has to be constantly mindful of other mitigating factors like economic cycles, internal equity considerations, cultures etc etc etc...especially the challenging 'millenial generation' and your own organisational affordability... I hope they understood what I was trying to drive at, while being mindful too, that I was speaking to them at TGV speed hahaha....