Aligning Pay and Results.

• Author: SALWEN, ROBERT
• Position: Review

Published by AMACOM, New York, 324 pages, $35.00

AS ITS SUBTITLE suggests, Aligning Pay and Results: Compensation Strategies that Work from the Boardroom to the Shop Floor is an ambitious effort to cover in a single volume the subject of aligning pay with performance throughout the organization. In large part it succeeds.

The 14 authors who contributed to this book have created a valuable reference work for the manager or advisor who is responsible for developing a performance-based pay plan for any level of the organization. The authors ably cover salary plans as well as incentive pay plans; and discuss such diverse topics as broad-banding; gain sharing, skill-based pay, competency-based pay, pay plans for groups and teams, management incentive plans, EVA-based incentive plans; stock ownership guidelines for executives; and outside director pay plans.

The book also contains valuable discussions of the special challenges of aligning pay with performance in multinational companies, and of communicating plans that align pay with performance. Insightful commentary by editor Howard Risher, a senior fellow at the Wharton School's Center for Human Resources and an experienced consultant, helps to put each chapter into perspective and maintain thematic consistency.

The contributors, who are compensation advisors from some of the nation's leading companies and consulting firms, explain the process of developing plans that align pay with performance, as well as the analytical issues that should be addressed. Both theory and practice are covered, as are current trends. Most of the chapters also contain enlightening case studies and useful checklists.

Multiple authorship by experienced consultants enables the book to cover a wide spectrum of topics in depth -- but at a cost. One is the uneven quality and writing style of the various contributions. Some of the chapters are a good read (the one on communications, in particular, comes to mind); others are tedious.

Some of the chapters explore well the pros and cons of a particular compensation approach; others are less balanced, and omit any serious discussion of the "cons." Some of the authors appear to make the subject matter more arcane and complex than it need be, and in at least one case the authors unabashedly pitch their firm's proprietary approach to linking pay with performance. Such shortcomings inevitably make the reader question the objectivity and motives of the authors.

The reader also must...