2/15/2000
Traditional reward systems, emphasizing jobs and merit pay, are no longer sufficient in motivating individuals or organizations, writes Lawler, professor of management and organization at the University of Southern California. In the knowledge-based economy, reward systems must pay people instead of jobs, recognizing and rewarding individuals for developing their skills and increasing their knowledge — and not just for their performance. Organizations, Lawler says, must realize that human capital, core competencies and organizational capabilities are the key components of competitive advantage, and he presents a working compensation strategy for HR managers to consider as they respond to the changing landscape.