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3.7 out of 5 stars
Pay: Why People Earn What They Earn and What You Can Do Now to Make More
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9 of 9 people found the following review helpful
VINE VOICEon December 15, 2012
Format: HardcoverVine Customer Review of Free Product( What's this? )
I think this would make a great introductory textbook for a business class. It does do a good job of providing an initial insight into compensation and the different ways it is affected and disseminated. The concepts of "total rewards" (salary + other benefits), "CEO pay", influences on pay, methods of measuring payment (say hours vs. number of items processed), and methods of payment (stock options vs. cash) are all touched upon here and are well introduced.

That said, however, this book is not what I expected and I think people buying it based on either the description or the title are likely to be disappointed.

Truly I think this is a book without a large audience. The one it is geared to is not the right one (it doesn't give much that's actionable or really makes you feel like things are wholly clarified), and it doesn't go deep enough or reveal new research enough to really stand out as a masterpiece in the field of compensation.

As for helping you figure out what you can do to earn more:
Even though the last section does touch on factors for increasing your pay (flexibility, be willing to move, be willing to change jobs, ask, get more education) I don't think there is a lot that most of us will be able to garner to change our situation unless (1) you've never thought of the obvious, (2) you're willing to make extreme life changes (like moving), and/or (3) you work a job where your compensation is highly negotiable (i.e. probably a small company or start up) and you can use the information in the book to find out what others in your field are paying or to ask for compensation in a different form or by a different metric. Things like gender gaps are discussed, but obviously those aren't things you can address.

Also, the book gets highly technical...there are lot of charts and graphs that are not self-explanatory without the text. To delve very far into much of the graphs and charts you need to do a lot of thinking to process it (which for most readers I suspect won't be worth it). Also, you end up with the feeling that a lot about compensation is still being studied and is unknown. (i.e. "it's difficult to measure", "this study conflicts with that one," and so on) While the author's honesty is appreciated, it basically puts you in a spot where you still don't know why something is the way it is or what to do about it. ("Why People Earn What they Earn and What You Can Do to Make More...")

As far as a detailed course on compensation - I do get the impression the author is a very capable lecturer, consultant, and professor (that is his primary career). For someone who is very invested or knowledgeable in the field however, I don't know that this book will reveal much new information...as a textbook, as I said, it's a good introduction, but does not delve deep enough to full inform on the subject or make a true practitioner.

The most useful thing I got out of it was the address for [...] where you can find and research careers and pay by state and skills.

There are also interesting bits about what non-profits can and can't do (i.e. there's not much restriction on what they pay their standard workers...the primary restriction is just on not profit sharing with managers) and on how to really control factors when comparing statistics (always valuable) such as comparing CEO pay against layoffs to find correlation and determining if these things are related or at all causative (it appears they are correlated until you control for factors and they are likely not at all causative, but are related to other factors like: big companies have more employees and therefore are more likely to have at least one layoff, but big companies are more likely to need to attract a very high powered CEO and so offer bigger bonuses, or alternative: companies with a lot of risk are more likely to have to lay off employees but need to pay bigger CEO bonuses as the CEO is assuming the risk of failure and instability by choosing to lead that company).

Three stars...mostly because I just don't think the book will be what most people will want or expect when ordering a book with the name and description. It's too technical and not very actionable.
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3 of 3 people found the following review helpful
on November 24, 2012
Format: HardcoverVine Customer Review of Free Product( What's this? )
In the conclusion Hallock states "This book is about why people earn what they earn and how you can make more." Actually, the book offers very few insights about either subject. The book is more about what people earn and very little else. It may be of some interest for the HR profession. It is of much less interest to anyone else especially the ones truly interested in the underlying economics of why people are paid what they are paid. Within the book there is no discussion of demand and supply for any given jobs. There is no discussion on the various causal forces affecting job demand and job pay such as globalization (off shoring, outsourcing), labor productivity (reducing demand for labor), technology (also reducing demand for labor). Given the author's sterling background in economics, I was disappointed by the lack of any relevant analysis within the book.

The author makes also a few errors. On page 12, he describes the distribution of wages as a "normal distribution." But, in Figure 2.1 on the next page you can see that the relevant histograms describe a "lognormal distribution" instead. On page 101 and 102, he states he is against the notion of curbing the risk that CEOs take on behalf of their institutions believing that as investors we can diversify away that risk by holding numerous stocks. The author does not acknowledge that CEOs within the financial sector did take egregious risks that took the worldwide financial system down. And, there was no diversifying from the ensuing financial sector driven stock market meltdown.

Some chapters are unclear. Within chapter 10 on stock options, he indicates on page 133 that traded options are very different from company stock options because they are never exercised early but can be traded. Meanwhile just the opposite is true for the company stock option. But, I wonder if trading and exercising a stock option are inherently similar. The main fact is that they render the option liquid. During this discourse, I think the author advances that company stock options are worth less than their traded counterparts; but, he indicates that employees value them more (not that employees are right). I would think that company stock options are worth less because they are restricted (long vesting period) and that you would not buy them if you had the choice as they concentrate your risk with your employer (a bad idea). But, the author does not discuss such issues. And, this section is left confusing the reader.

Often much of the text is redundant. Hallock spends an entire 35 page chapter on nonprofit compensation only to disclose in the middle of it (pg. 173 Fig 13.2) that there is essentially no difference between nonprofit and for-profit compensation once you control for age, education, industries, and job occupations. Similarly, Chapter 14 on what you can do to make more does not go beyond the self-evident. Chapter 5 on compensation strategy is based entirely on two completely hypothetical cases and feels really artificial. Many more real life examples would have been more instructive.

Other parts of the text are unexplained. The author mentions several times that in the early 1990s the use of stock options in CEO compensations skyrocketed. But, he never explains that this was due to President Clinton passing a law that restricted tax-deductible salaries to $1 million. And, this did not apply to stock options. On page 19, the author indicates that upward (and downward) mobility in wages has greatly declined across generations (intergenerational wage correlation has increased). But, he does not at all explain why. This trend is in part due to an overall change in the US labor force away from manufacturing towards information and services. Such a society puts a much higher premium on higher education and brainpower. Therefore, it sorts human capital a lot more selectively than it used to. The author does not touch on any of that.

Chapter 8 on compensation at the top (CEOs, stars, etc...) that could have been really interesting was a huge disappointment. Out of the 23 pages of this chapter, he spends only three paragraphs on the compensation of athletes, entertainers, and other stars. Otherwise, the entire chapter is disclosing what CEOs are paid and in what mix (wage vs stock options, etc...). The author always discloses a lot of info about the "what" but provides you no insight about the "why."

The author does disclose some valuable information sources. Those include O*Net online from the Bureau of Labor Statistics (BLS) to find the pay for various occupations. The BLS has also other sources within its website. You can find compensation of CEOs and other highly paid employees within the SEC schedule DEF 14A. Throughout the book, the author discloses ton of information regarding wage levels by gender, education, race and sometimes by a combination of those factors. He briefly explores related inequalities, but again without uncovering truly interesting insights on those subjects.

If you want to study the bunch of analytical gaps within this book, I would recommend The New Geography of Jobs,Coming Apart: The State of White America, 1960-2010,Who's Your City and even End of Men. Obviously, those books cover a lot more than just pay. But, they all put pay in a far more interesting context. They also explain far more why people are paid what they are paid which the author really does not touch upon.
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1 of 1 people found the following review helpful
Format: HardcoverVine Customer Review of Free Product( What's this? )
Professor Kevin Hallock has written a useful primer on thinking about pay. It's a topic of universal interest. It's also an area of widespread misunderstanding and even myths.

The book's structure is straightforward. The first section, "How Hard Can This Be?", outlines the basics and defines terms.

The second section is "How Organizations Set Pay Structure and Why". Here the reader glimpses a complex area. Determining the value created by any individual or team, and then setting a pay level in a wider competitive environment, are not simple or straightforward actions in many organizational settings in a globalized world.

The third section is "How People Are Paid Can Mean as Much as How Much People Are Paid." Chapters here outline various types of incentives and benefits, including international and not-for-profit information.

The final section is "What You Can Do to Make More and Concluding Comments."

Overall this book is very strong. I think almost any reader interested in these issues--and who isn't?--will find much of value. Compensation remains shrouded in mystery and secrecy. 'Pay' effectively presents illuminating information and data. Transparency about compensation is coming, fitfully--but it's not here yet.

A word of caution. The book's subtitle is: "Why People Earn What They Earn, and What You Can Do to Make More." 'Pay' is indisputably useful as a primer to explaining why people earn what they earn. It's less compelling in offering thoughts on what readers can do to make more.

The penultimate chapter is about that second part of the subtitle: "What You Can Do Now to Make More Now and Later." This chapter is not nearly as strong as the others. Few readers will find value in being told to "be polite," "be flexible," and get more education. This detour into self-help has a contrived feel. One wonders if an editor, with an eye toward marketability, grafted it on to accord a modicum some validity to the subtitle's second promise.

The book returns to form in the final chapter, which concisely summarizes the book's approach and conclusions.

In sum, I recommend this book highly. Individuals and organizations focused on compensation will find much of value.
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Format: HardcoverVine Customer Review of Free Product( What's this? )
Pay: Why People Earn What They Earn and What You Can Do Now to Make More covers every topic that you can ask for around compensation such as:
- executive compensation
- incentive pay
- performance management system (forced distribution)
- stock option
- non cash benefits
- non-profit compensation
- using relative comparison and survey to determine pay/bonus
- pay for performance concept
- list of different kind of jobs and how much they are making per hour

As well as simple topics on what you are supposedly can do to increase your chance to make more money such as:
- don't be a jerk
- look the part
- switch employers
- ask/negotiate salary
- be social
- be flexible
- be patient

However, in my opinion, this book doesn't really explain the fundamental reason why people earn what they earn. For example why CEO got paid what they get and whether it is justified. It only cover the fact that in certain company with this characteristic the CEO get paid more than the other.

So overall it's a decent book to understand the entire concept of how compensation system works in the corporate world including non profit organization and international organization but to me personally, this book fell a bit short in terms of exlaining why people earn what they earn. For example it started covering topic like A-Rod getting paid $25M, and why is he worth that much? is he worth that much? and no answer/explanation. I think the explanation should be does he create an incremental profit to his buyer of more than $25M and if it is then he is worth it (unless there are other players that can give the same return at a lower price). of course it is not easy to calculate how much a person contribute, and surely most of the time what you contribute rarely match with what you actually are making. It has some additional good examples like the case study "what is the best way to pay the cucumber pickers? by the cucumber? by the pound? by individual performance? by group performance? by the hour? The answer given in the book which is to pay them "by the hour", and I'll let you read the book to get the explanation :)

I'm giving an extra star because the book does have many interesting case studies included.

Sidarta Tanu
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VINE VOICEon January 18, 2013
Format: HardcoverVine Customer Review of Free Product( What's this? )
Mr. Hallock describes his audience as compensation practitioners (agree), business leaders (neutral), and anyone who gets paid to work (strongly disagree). This book has too many technical details and reads like a Human Resources college textbook. If you're looking for advice on how to increase your pay, skip to chapter 14, or better yet, read this quote and skip the book altogether: "be polite, show up on time, work hard, be nice, be kind, don't be a jerk (isn't that the same advice as be polite, be nice, be kind?), think before you act, get along with your coworkers." I'm simplifying here. Obviously, the book has more to offer than this advice, but much of it is the stuff of compensation analysts.

There is no discussion of level of pay tied to supply and demand of labor for particular industries. If you want to increase your pay, for example, you may want to consider training for professions that are in short supply and in high demand, e.g. assault weapons manufacturing industry, now that they're about to be banned. But perhaps Mr. Hallock was aiming for an audience who would like to increase their pay and continue in the same profession.

Coincidentally, just today I inputted annual salary increases and bonuses for 30 employees in my department. The decision factors on what to pay my employees depend on what the market bears, how the employees perform relative to others on the team, and what my company allows me to pay them. The first two, I can assess on my own. The last is up to our Human Resources department who may find this book useful more than I.
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2 of 3 people found the following review helpful
on October 25, 2012
Move over "Freakanomics" and "Predictably Irrational." Kevin Hallock has done the seemingly impossible: Made the study of compensation and benefits interesting. Combining solid academic research with both insightful and humorous commentary, Hallock's "Pay " takes the reader on a journey that starts in the cucumber fields of the northeast USA and ends with a discussion of executive compensation.

Always interesting, the book is terrific resource for leaders thinking through how to optimally align their organization's compensation and business strategies. It's also a terrific treatise for HR professionals on how to address the two major philosophical challenges associated with any pay system: 1) How much should we pay people? and 2) Why?

A must read for anyone interested in figuring out how to best match how you pay people with what you're trying to get done.
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Format: HardcoverVine Customer Review of Free Product( What's this? )
Of most use to human resources personnel and compensation committee members, this book has enough interesting information that most people will appreciate. The author compiled data from numerous sources and presents as well as analyzes the data. At times, there are almost too much data and the analyses are convoluted. However, compensation is never as straightforward as expected. This is abundantly clear throughout the book.

Sections that were a little light were the parts about star athletes and performers. He summarized these outliers with a few cursory paragraphs and conclusions. Better was the chapter on non-profits. I thought that was particularly well researched and presented.

The chapter on increasing compensation was light. It had some good ideas but contained no great revelations.
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on July 22, 2013
Personally, this was a good book that provided insight as to how companies determine compensation and benefits. Of course, it led to more questions, however it did answer some of the questions that I've wondered about sometimes. And of course, salary is an extremely sensitive topic that people generally avoid.

This book is like a FAQ of some of those questions one may have. In general if you have a very good friend in HR's compensation and benefit function, this may be redundant. But for those of us less well acquainted, I would recommend spending perhaps 2 hours to go through this book (it's very short)
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VINE VOICEon January 21, 2013
Format: HardcoverVine Customer Review of Free Product( What's this? )
A rather dry but ultimately informative look at how much people are paid and why. Analysis is clear, and factors such as gender and education are controlled for where possible. Tips on how to get paid more are commonsense and don't really add much, such as 'be a team player,' or, 'don't be a jerk.' Since we spend so much of our lives working, it is certainly worthwhile to pause and consider how we are paid, the value of benefits, and how that pay might vary from state to state, or country to country.
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on May 27, 2013
This book, though it does contain original comments by the author, is really nothing more than the same information (and structure) found in many compensation text books and standard books. In fact, while reading the book, it almost follows the same outline chapter by chapter as did a compensation and benefits text book I have on my shelf.
However if you have not read compensation books before, this book is a brief outline of many, therefore can be a great starter book.
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