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Reward Systems: Does Yours Measure Up? (Memo to the CEO) Hardcover – December 1, 2008

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Product Details

  • Series: Memo to the CEO
  • Hardcover: 136 pages
  • Publisher: Harvard Business Review Press (December 1, 2008)
  • Language: English
  • ISBN-10: 1422119114
  • ISBN-13: 978-1422119112
  • Product Dimensions: 7.2 x 4.6 x 0.7 inches
  • Shipping Weight: 7 ounces (View shipping rates and policies)
  • Average Customer Review: 4.4 out of 5 stars  See all reviews (44 customer reviews)
  • Amazon Best Sellers Rank: #327,873 in Books (See Top 100 in Books)

Editorial Reviews

About the Author

Steve Kerr is the former Chief Learning Officer of Goldman Sachs and General Electric. He is a former professor of management and has served on the faculties of the University of Michigan business school, Ohio State University, and the University of Southern California, where he was faculty dean. He has authored numerous academic articles and coauthored the bestselling business books The Boundaryless Organization and The GE Work-Out.

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Customer Reviews

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Create Reward Systems that Work.
Chen Sun
We recommend business owners, managers, supervisors, and those in between to read this text for better organizational relations.
This is a very short, compact book that is packed full of insights into what makes a good reward system.
John Chancellor

Most Helpful Customer Reviews

10 of 10 people found the following review helpful By Greg Ehrbar VINE VOICE on January 15, 2009
Format: Hardcover Vine Customer Review of Free Product ( What's this? )
After over forty years of experience in large and small organizations, I have been on both sides of rewards, both receiving them and being passed over for them. If there is anything this experience has taught me, it is that in general, corporate rewards offer little on the positive side and a lot on the negative side.

There are several issues missing - or at least not fully realized, in this book, though it does contain some very true insight into failed rewards systems, such as those that start out claiming to reward outstanding performance but degenerate into mere attendance contests (a sure sign that management is either too busy, lazy or out of touch with its employees on a personal level).

One of the missing issues is favoritism. People are human, whether they are CEOs or the custodial staff and they respond more positively to those who make them feel good about themselves. They also cannot help but become somewhat biased toward those they know over those they don't know. That is why the first people in a large organization to receive awards are those in their immediate field of vision -- a phenomenon I have witnessed time and time again. Kerr does allude to the fact that, even in a quantifiable reward system, it must be taken into consideration that the playing field is not always level for the candidates -- but what also factors in is that the "favorites", or to put it more charitably, the "high-profile" persons, are often going to get the better chances?

That is not to say that this book does not have value. Kerr does acknowledge flawed systems and, most importantly, points out that there are employees being rewarded for the wrong behavior. There will always be people who figure out how to work the system. That is absolutely true.
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4 of 4 people found the following review helpful By Russ Emrick VINE VOICE on December 3, 2008
Format: Hardcover Vine Customer Review of Free Product ( What's this? )
This book will help you in business regardless of what you do. The author is the real deal and has the chops to write a useful business book. This isn't a theoretical book written by an academic but by someone who rolled up their sleeves and worked with Jack Welch in transforming a global giant.

I had low expectations of such a small book, plus I don't design reward systems. However I learned how employees game the system and how important it is to have metrics in place regardless of your job description. "Reward Systems" shows how to define actionable items and make metrics based on performance instead values and emotions. One of the best books I read this year. Hits on all cylinders.

Proper reward systems based on the objectives of the business which are aligned with the business' values make all the difference. However they must FIRST have metrics in place that monitor actual performance, not personality traits. Being aware of metrics, performance, and how reward systems work will impact your own performance and career, regardless of where you are on the corporate ladder.

Other reviews have given details on Kerr's system and the major ideas, so I won't be redundant. Read this book. Every page is loaded with value. With so many terrible business books on the market - especially the faddish theories and verbose sequels to outdated ideas - this book is a treasure. A must read in my opinion, especially for leaders.
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3 of 3 people found the following review helpful By Lisa Shea HALL OF FAMETOP 500 REVIEWERVINE VOICE on December 20, 2008
Format: Hardcover Vine Customer Review of Free Product ( What's this? )
Reward Systems by Steve Kerr is a very short book - and it is also a high level book. I have several books on practical reward systems, but that is not what this book provides. Instead, it is more meant for a CEO to think about overall company-wide systems that will help create a productive environment. In that sense I think the title is not quite helpful. Most people who are getting a book on reward systems want to actually create reward systems and get help with them. This book is more about how to decide who gets what raises, and how to get management to implement that well.

To begin with, the book talks about a scientist working with rats. He literally yells at the rats for "not doing what he wanted." Finally he realized his EXPERIMENT was flawed - that he was not rewarding the rats well, so they naturally were not doing the desired behavior. Once he gave them good rewards, they went for them. So for example imagine a maze with pieces of chalk at the end (assuming rats hate chalk ;) ). The rats would not make any attempt to go for it. If instead you had a really lovely cheese at the end, the rat would now try to get it. The book is saying that humans are the same way. If you have "rewards" that nobody wants, you cannot be surprised when the employees do not even try to get them. You need rewards they really do want in order to movtivate them.

The book launches into a long discussion about mission statements and then metrics of how to measure which employees should get a reward. It points out that measurements should be about improving performance. It talks about rating vs ranking - i.e. giving each employee an independent quality level, or putting them all into a long line from top to bottom.
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Format: Hardcover
Reward and compensation systems are one of the most touchy subjects in a company. People don't like you messing with their rice bowl. But if not done correctly, management may well be measuring and rewarding the exact opposite behavior that they are trying to target. Reward Systems: Does Yours Measure Up? by Steve Kerr does a good job of drilling down to the core components of an effective reward system, and can help you get on track if you're floundering.

The Power of Reward Systems
Step 1: Define Performance in Actionable Terms
Step 2: Devise Comprehensive Metrics
Step 3: Create Reward Systems That Work
What To Do Monday Morning
About the Author

At 136 pages, Kerr doesn't have a lot of time and space for fluff and philosophical ramblings. As such, the material is concise, direct, and ready for application. First, you need to get rid of the fluffy and lofty visions and goals that can't be nailed down in terms of "did we achieve it or not?" If a vision of "become the best company" doesn't have actions and behaviors associated with it, then it just won't happen. Next, set up the measurements that can be monitored and applied to the actions. Here's where many run into problems. It's a popular exercise today to "rank" all employees in order to weed out the low performers. Conceptually, it sounds effective, but it's loaded with landmines. For instance, all salesmen may be ranked against each other. Bob outsells Bill by a 2-to-1 factor. But that ranking doesn't take into account that Bob's territory is populated with high-income individuals, while Bill is selling to blue-collar workers. In terms of effectiveness, Bill might be a much better salesman that Bob, but his territory will never allow him to generate Bob-like sales.
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