Skyrocketing salaries, signing bonuses, and stock options have radically altered the landscape of compensation in today's organizations. At the same time, workforce shortages, reduced employee loyalty, and increased employee access to salary information have made compensation one of the hottest topics in business. This volume examines the most recent developments in compensation practice and serves up important findings concerning its most pertinent issues.

Over a dozen leading I/O researchers and consultants tackle the questions at the core of compensation study. In the first part of the book they explore what is known—and not known—about how compensation is actually determined. They dissect the effects of pay on employee attraction, retention, attitudes, and performance. And in one chapter, they distill those insights into nine principles for constructing incentive systems that will boost employee satisfaction and effectiveness.

In the second part of the book, the contributors focus on how recent changes in technology, business strategy, organizational structure, and job design have affected pay strategies. They discuss how new pay strategies have modified the psychological contracts between workers and employers. And they take a critical look at research in the areas of alternative work arrangements and risk in compensation systems.

A concluding chapter summarizes the contributors' most important insights, points to areas that require additional study, and suggests concepts, methods, and questions from other disciplines that I/O psychologists might adopt in conducting compensation research.

In today's competitive business environment, effective compensation is vital to every company's success. Compensation in Organizations takes stock of the current state of research into compensation and provides encouragement and direction for taking that research and practice forward.

Examines recent developments in compensation practice. Early chapters explore what is known and not known about how compensation is actually determined, discussing areas such as the effects of pay on employee attraction, retention, attitudes, and performance. Later chapters focus on how recent changes in technology, business strategy, organizational structure, and job design have affected pay strategies, and discuss research in alternative work arrangements and risk in compensation systems. Rynes is professor of management and organizations at the University of Iowa. Gerhart is professor of organization studies and area coordinator at Vanderbilt University's Owen Graduate School of Management.
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"I can summarize my recommendation concerning Compensation in Organizations in one sentence: get this book and read it carefully." (Industrial and Labor Relations Review, 1/02)

Join the latest debate on the issues surrounding employment compensation. In Compensation and Organizations, a number of leading I/O psychologists and researchers explore the tremendous impact that recent changes in market conditions have had on today's compensation practices and outcomes. They delve into the effects that compensation has on employee performance, satisfaction, and attraction and retention, and examine the roles of pay strategy, pay risk, and the changing employment contract on pay packages and pay outcomes. They also offer nine general principles for constructing effective incentive systems. It's a broad-ranging work that summarizes the most important trends and conclusions in this important field and highlights areas in need of further research.

SARA L. RYNES is the John F. Murray Professor of Management and Organizations at the University of Iowa.

BARRY GERHART is the Frances Hampton Currey Professor of Organization Studies and area coordinator at Vanderbilt University's Owen Graduate School of Management.

Foreword.

Preface.

The Authors.

Psychological Research on Determinants of Pay: Review, Evaluation, and Suggestions for Future Research (S. Rynes &J. Bono).

Compensation, Attraction, and Retention (A. Barber &R. Bretz).

Compensation Attitudes: A Review and RecommAndation for Future Research (H. Heneman &T. Judge).

Incentives and Motivation (K. Bartol &E. Locke).

Compensation Strategy and Firm Performance (B. Gerhart).

The Effects of Changes in the Nature of Work on Compensation (R. Heneman, et al.).

Bringing Organization and Labor Relations into Psychological Research on Compensation (P. Sherer).

Psychological Contract Issues in Compensation (D. Rousseau &V. Ho).

Rethinking Compensation Risk (R. Wiseman, et al.).

Concluding Remarks.