People, Performance, & Pay

This book is an excellent resources for leaders of companies,that are reengineering key process and to sustainable competitive advantage and offers ways of thinking our business strategies or changing organizational.This book offers excellent ideas for using innovative reward and recognition programs to accelerate organizational and culture change.Was this review helpful to you?

'People, Performance & Pay' is must-read for all executives and HR professionals who want to understand the point-based pay system, known as the Hay Guide Chart-Profile Methodology. With concrete examples from their consulting experiences, Thomas P.Flannery, David A.Hofrichter, and Paul Platten clearly explain how to develop compensation strategies to support business values, work cultures, and strategic goals.In the literature, the Hay system has been criticized because it may promote a bureaucratic culture and because it fails to differentiate between high and low performers or contributors. For example, Edward E.Lawler writes, in his 'Rewarding Excellence,' "the Hay system is the most commonly used approach for determining pay and reward levels in large organizations, although numerous other evaluation systems have also been developed. There is a real question, however, about whether Hay or any of the others is the best approach in today's business environment...Job evaluation fits a traditional bureaucratic approach to management that relies heavily on control through job descriptions, standardization of work, and hierarchical levels of management." On the other hand, after defining the Hay system as 'pay for empire,' Peter Block argues, in 'Stewardship,' "it is a widely accepted method of using job descriptions- including the number of direct reports, type of budget responsibility, and levels of responsibility and decision-making authority- to make rational the different pay levels within an organization. For what it was asked to accomplish, this system has done an elegant and durable job. But we must question exactly what it was we asked the Hay system to do-to pay people based on the size of their territory, number of subordinates, budget size, level of authority...Soften it if you like, but these are measures of empire, not contribution to the organization."In this context, the authors say that "certainly there is truth in Block's statement. Indeed, as the title of our book suggests, people and their performance-their contribution both as individuals and as members of the organizational team-are the linchpins of any effective compensation strategy. But that title and statement do not, despite what our critics might say, signal a sudden shift in our philosophy about pay. The fact is, we've always believed that people and how they performed constitute the foundation of any successful business strategy. We've always believed that compensation is an important element of a successful human resources equation that puts people first...When the Hay system is properly used in the right circumstances, it can still be very effective in creating people-and performance-oriented pay programs."I highly recommend this reference source on the Hay system.

The ideas in the book helped me to reshape my organization's compensation programs to align with our overall strategy. It's been great!