Human Equation, The: Building Profits by Putting People First (Hardcover)

- that it is essential to work in the right sector,
- that the size of the organization is crucial,
- that it is necessary to have an international precense,
- that downsizing is indispensible, and
- that it is necessary to have a technological lead.

Then the author clearly and impressively presents the enormous amount of evidence of the last decade showing the strong association between how organization treat people and how they score on financial and operational performance indicators. Pfeffer describes the following seven HR practices that demonstrable correlate with organization success. He names these practices High Performance Work Practices. They are:

1. Employment security
2. Selective hiring of new personnel
3. Self-managed teams and decentralization of decision making as the basic principles of organization design
4. Comparatively high compensation contingent on organizational performance
5. Extensive training
6. Reduces status distinctions and barriers, including dress, languag, office arrangements, and wage differences across levels
7. Extensive sharing of financial and performance information throughout the organization

This list contains some elements that may seem counterintuitive to some. For instance: how can it be that high wages contribute to financial performance? Don't they just keep the profits low? And how can you afford to be selective in this hard labour market? And how can companies afford to invest much in training of personnel? Aren't employees so mobile and disloyal that you run the risk of training them for your competitor? Speaking about this, how can you in this time of employability of employment security? And it is wise to have an open information policy? If you'd do that, wouldn't you weaken your position by feeding your competitor with valuable information?

If you read this book you will find crystal-clear answers to these questions. The conclusion is that the seven practices do indeed work.

Coert Visser

If you care about your organisation's performance, you will unquestionably benefit by reading this book.

The underlying message is that "do you see people as labour costs to be reduced or eliminated, or do you see your people as the only thing that differentiates you from your competition?"

I did find it quite satisfyingly radical for a US author to actually recommend that US Managers need to look overseas, as in this quote :
"One might be well-served to spend more time outside of the United States ... What has come to be taken as 'good management practice' in the United States is very, very culturally specific to the United States. Managing in a different way may require developing a broader world view ..."
I can related to that, given that I work for a US Fortune 500 Company.

The Case Studies cover a broad range of Industries such as Automobile, Banking, Steel, Clothing, Semiconductors, Retailing, Oil Refining, Energy, Airlines; and Geographical coverage includes not only North America, but quite a number of Countries in Europe & Asia.

A Chapter dedicated to Unions but yet not to Union-bashing is a pleasant change.

All in all, an interesting book that I wish more CEO's & HR Officers would read to see the alternatives to boom-and-bust downsizing & outsourcing.