TABLE OF CONTENTS This chapter explores the concept of total compensation and how to use compensation to dramatically improve performance. Each component of total compensation is first defined, and then analyzed with case studies to show how each component is evolving. The design basics for each are presented, as well as when some types of compensation are more appropriate. The chapter concludes with a look at how rewards will evolve. How will the employeremployee contract change in the twenty-first century, and how will it impact each component of total rewards?
Over the last few decades, American companies have endured (and survived) a difficult period during which world markets evolved and produced new competitors while traditional consumer and industrial demand flagged. American companies went back to the drawing boards to reinvent themselves. They shrank, they reengineered, they developed a process focus, and they implemented broad technological solutions. The concept of competition changed, as did the concept of markets. The result has been the most dynamic economy seen in this country in a generation and a new emphasis on process improvement and...
