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Edward E. Lawler III. Rewarding Excellence: Pay Strategies for the New Economy. San Francisco: Jossey-Bass, 2000, 327 pages, $34.00.
Reviewed by Gary B. Brumback, Palm Coast, FL.
My overall assessment and recommendation can't wait. The book should become the bible on the subject. Never have I read a book that is such a masterful blend of scholarship and practice. Not surprising really, because it was written by a prolific author, researcher, and consultant who has been acclaimed by Business Week as "one of the world's leading management experts" (also of relevance here is that The American Compensation Association has honored him).
The book is intended for those who design pay systems or, more broadly, design and manage complex organizations. So if that is what you do, or, I would add, if you teach in this subject area, better stop doing it until you have absorbed this book. But I must also tell you that it isn't undisputed gospel. The book is not flawless. What book is, though?
The primary focus of the book is reflected in the title, but a secondary focus is on "how to design and manage complex organizations." Lawler's central thesis is that global competition and high technology demand a "new logic of organizing" that treats human capital (skills and knowledge), core business competencies (technical expertise), and organizational capabilities (such as competing globally) as the "key sources of competitive advantage." He offers AT&T as an old-logic example of a bureaucracy that worked well enough until the 1980s but now realizes it must reinvent itself (I personally think the old logic was never right; its deficiencies are simply less forgiving now).
There are four elements to the new logic: employee involvement, lateral work processes (e.g., teams), human capital investment, and organization around product and service. He frames the new logic in a "star model" that has five interconnected features: business strategy, people, structure, processes, and rewards. If AT&T wants excellence and a competitive advantage, for instance, it must change itself on all five points of the star in an integrated way and consistent with what this book has to say. Changing the reward system only would be one-fifth new logic, so to speak, and...