Rewarding Excellence

Abstract

As argued some years ago, it is not the selection of products, the identification of markets, or the management of supplier relations that determines long-run competitive advantage but the management of people at all levels within the organization. In his new book, “Rewarding Excellence,” Edward E. Lawler III echoes this sentiment by strongly arguing that strategic success rests on how well the firm's reward structures support the firm's strategic intent. His thesis is that, with few exceptions, firms desiring to develop core competencies from which sustainable competitive advantages emerge must focus on attracting, developing, motivating, and retaining what he calls “excellent” employees, where excellence is defined in terms of performance in the pursuit of the firm's strategic objectives. The basis for this call to reconsider reward structures, and the employment relation in general, is the growing awareness that changes in the larger environment are forcing organizations to utilize their human resources more effectively.