The most relied-on guide in the industry--now with strategic insight for using compensation strategies and practices to create competitive business advantage

The Compensation Handbook has been a mainstay on the desks of human resources and compensation professionals for more than forty years--and now this revised Sixth Edition continues the tradition with new material and focus on developing a sustainable competitive advantage. The most important revision to date, this transformative edition will enable compensation and human resources practitioners to:

Provide a road map for creating a fully defined compensation strategy for any organization Design and implement an approach for attracting and retaining talent that will remain relevant into the future Present programs that allow for the seamless alignment of historic best practices with the latest tools, methods, and diagnostics in compensation

Much of this guide's longtime success comes from the extraordinary team of highly respected experts from business and academia who share their authoritative knowledge on every aspect of compensation, and this latest edition features more than two dozen new contributors leading the field in their specialties. From using "big data" to solidify compensation decisions to building compensation programs that adapt to rapidly changing business and workforce scenarios to executing successful plays for new talent, retaining essential staffers, and encouraging skill development-- The Compensation Handbook, Sixth Edition continues to be a groundbreaking tool that forward-thinking compensation professionals and HR practitioners can use to substantially add value to their companies today and in the future.

Preface xi PART I: INTRODUCTION 1 The State of the Compensation Practice 3 Lance A. Berger 2 Using a Total Rewards Strategy to Achieve Competitive Advantage 13 Steven E. Gross and Mandy Rook 3 Aligning Total Compensation Programs with Organization Values and Strategy 27 Thomas B. Wilson 4 Winning Compensation Strategies for Organizational Sustainability 35 Dorothy R. Berger 5 Excelling as a Compensation Professional 45 Brian Moore and Sue Holloway 6 Emerging Compensation Issues 53 Joseph J. Martocchio PART II: BASE SALARY 7 Positioning Salary Structures within the Total Rewards Context 63 Andrew S. Rosen 8 Selecting and Developing a Salary Structure 81 Michael Armstrong 9 Making Merit Pay and Bonuses Matter 89 Myrna Hellerman and James Kochanski 10 The Purpose and Nature of Job Evaluation 97 Michael Armstrong and Paul Thompson 11 Optimizing the Use of Salary Surveys 105 Tim Brown 12 Rationale for and Approaches to Benchmarking 119 Tom McMullen and Iain Fitzpatrick 13 Paying for Skills, Knowledge, and Competencies 135 Gerald E. Ledford, Jr. 14 Using Nonmonetary Awards to Support Behaviors that Drive Business Results 143 Melissa Van Dyke PART III: VARIABLE COMPENSATION 15 Choosing the Incentive Compensation Programthat Best Promotes Performance 157 Linda E. Amuso 16 Designing and Implementing Effective Variable Pay Programs 169 Erin C. Packwood 17 Aligning Sales Compensation Plan Design with Talent Retention Strategy 179 Jerome A. Colletti and Mary S. Fiss 18 Developing and Applying a Return-on-Investment Methodology to Drive Sales Force Performance 191 Rebecca Sandberg and Carrie Ward 19 Creating a Culture of Collaboration, Innovation,and Performance through Team-Based Incentives 199 Luis R. Gomez-Mejia and Monica Franco-Santos 20 Revolutionizing Workplace Culture through Scanlon Gain Sharing 211 Dow Scott and Paul Davis PART IV: EXECUTIVE COMPENSATION 21 Formulating and Implementing an Executive Compensation Strategy 225 Ted Buyniski 22 Designing and Executing Long-Term Incentive Plans 235 Ben Burney and Bill Gentry 23 Regulating Executive Compensation 249 Frank P. VanderPloeg 24 Formulating Executive Employment Agreements 265 Andrea S. Rattner 25 Cracking the Secret Code of Long-Term Incentives in Private Companies 281 Myrna Hellerman and Yelena Stiles PART V: COMPENSATION AND THE BOARD 26 The Compensation Committee and Executive Pay 289 Seymour Burchman and Blair Jones 27 Dynamics of CEO Pay 307 David Swinford and Jane Park 28 Board Compensation 315 Nora McCord 29 Structuring Board and Executive Pay 325 Bruce R. Ellig 30 Compensation Committee of the Board 333 Robert H. Rock 31 Creating an Effective CEO Succession-Planning Process 343 James F. Reda and Molly A. Kyle PART VI: PERFORMANCE AND COMPENSATION 32 A Framework for Designing a Performance-Management Process 355 Charles H. Fay 33 Choosing a Performance-Appraisal System 363 Martin G. Wolf 34 Linking Compensation to Competitive Business Value 383 Mark Graham Brown 35 Using Financial Rewards to Drive Productivity 391 Christian M. Ellis 36 New Developments and Issues in Pay for Performance 397 Mark D. Cannon 37 Making Calibration an Integral Part of a Performance-Appraisal System 409 Dick Grote 38 Guidelines for Effective Executive Performance Appraisals 423 James F. Reda and Molly A. Kyle PART VII: TALENT MANAGEMENT AND COMPENSATION 39 Employing Novel Ways to Use Compensation to Win the Talent Wars 441 Deborah Rees 40 Strengthening the Link between Compensation and Return on Investment 451 Mel Stark and Mark Royal 41 Incorporating Work/Life Effectiveness into a Total Rewards Strategy 463 Kathleen M. Lingle 42 A Methodology for Effectively Communicating Compensation Programs 471 John A. Rubino PART VIII: GLOBAL COMPENSATION 43 Critical Expatriate Compensation Issues and Practices 481 Roger Herod 44 Global Local National Compensation Issues and Practices 493 Jordan Blue, Ed Hannibal, and Ilene Siscovick 45 Employing Novel Compensation Approaches to Compete for Expatriate Talent 503 Yvonne McNulty PART IX: BIG DATA 46 A Guide to Realizing the Value of Big Data 521 Lance A. Berger 47 Using Workforce Analytics to Make Effective Compensation Decisions 529 Dan Weber 48 Making Better Compensation Decisions in the Age of Big Data 537 David B. Turetsky 49 Using Big Data to Enhance the Value of Compensation Programs 551 Ezra Schneier 50 Turning Data into Compensation Information 561 Martin G. Wolf 51 Exploring New Technologies that EnhanceCompensation Programs 571 Mykkah Herner Contributors 577 Index 581