Pay People Right!: Breakthrough Reward Strategies to Create Great Companies
Patricia K. Zingheim, Jay R. Schuster · 2000
A practical guide showing how companies can align base pay, variable pay, recognition, and total rewards with business goals to create a win-win 'better workforce deal' that drives organizational success.
Pay People Right! reframes compensation as a powerful strategic communication tool rather than an administrative cost, arguing that pay is the 'accelerator pedal' for business success. Building on six universal reward principles and a four-component model of total rewards (individual growth, compelling future, total pay, and positive workplace), authors Zingheim and Schuster show leaders, HR professionals, and managers how to build a business case for changing rewards and then design integrated pay solutions that reward individual ongoing value with base pay and results with variable pay. Drawing on extensive consulting and research across Fortune 500 and emerging companies, the book tackles the toughest reward challenges—scarce talent, teams, sales forces, executives, mergers and acquisitions, and global operations—and offers a roadmap for making rewards work through involvement, communication, and continuous refinement. It is a must-read for anyone serious about using pay to gain and keep committed people who help make a company great.
The model it argues
A causal model expressing how design levers (business case for changing rewards, reward principles, base pay, variable pay, recognition, performance measurement) and contextual conditions (workforce trust, leadership championing) drive psychological and behavioral states (line of sight, stakeholdership, workforce commitment) that produce outcomes (workforce alignment, talent retention, business performance).
Key ideas
- Business Case for Changing Rewards
- The clear and understandable business justification that explains why pay must change and what value the change will deliver to the company and workforce.
- Application of Reward Principles
- The extent to which reward design embodies the six reward principles articulated in the book.
- Base Pay Rewarding Individual Ongoing Value
- Base pay designed to reflect an individual's sustained, continuing value to the company.
- Variable Pay Rewarding Results
- Cash and equity pay that varies with the achievement of business results and must be re-earned each performance period.
- Recognition and Celebration
- Acknowledgment and celebration of contributions that magnify the effectiveness of pay.
- Performance Measurement and Management
- The process of setting business-aligned goals and providing continuous development and performance feedback.
- Workforce Trust
- The workforce's trust and confidence in leadership and the company.
- Leadership Championing and Sponsorship
- Active leadership sponsorship, championing, and role modeling in support of business-aligned rewards.