The Book Corner - Review

The Book Corner

Featured in this issue:

The Manager’s Guide to Rewards

By Doug Jensen, Tom McMullen, and Mel Stark
AMACOM, 2006

Recommended by Donald Atwater, PhD, Practitioner Faculty of Economics

Have you ever read a book that you know is tactically correct but thinking about how to make it work in your company gives you a headache? Choosing the compensation elements important to the improved performance of your company may give you a headache but if you can do it well the results should be worth it.

In The Manager’s Guide the authors make the case for the “total remuneration” model for guiding performance in companies. Total remuneration includes salaries, incentive compensation, performance pay, variable pay, benefits, recognition, and communications.

The book provides a practical explanation of each compensation piece in the total remuneration puzzle and the key reasons why each is important. According to Jensen, McMullen, and Stark, the primary compensation factor is salary level; without well-structured salary grades it is not possible to add the other elements and use them to improve performance and growth.

The Manager’s Guide goes on to explore the association between incentives and variable pay, and team-building, meeting annual corporate performance goals, and creating leadership. The intangibles, especially recognition and communications, are the ultimate keys to achieving competitive advantages with total remuneration, according to the authors. The best salary structures, they write, are those built on “value of work” formulas that are clearly differentiated across jobs. Yet how many companies really have such job and salary structure?

The Manager’s Guide is a useful reference for the wealth of compensation options it provides. The authors are careful in reminding readers that “one size never fits all,” and taking a “cookie-cutter” approach is dangerous. A key question readers will come away with is, “What is really important versus what is potentially important?”

I must inject a small disclaimer, however: While there is much valuable information to take away from The Manager’s Guide, it is important to note that the authors are all senior executives of the Hay Group, an international consulting firm, and much of the text focuses on their personal successes in the compensation space.

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An Empire of Wealth: The Epic History of American Economic Power

By John Steele Gordon
Harper Perennial, 2005

Recommended by Sean D. Jasso, PhD, Practitioner Faculty of Economics

An Empire of Wealth is written by one of America’s great living historians. John Steele Gordon tells the story of the American experience from its dangerous founding in Jamestown, Virginia, in 1607 to the attacks on America on September 11, 2001. The central theme of this story is the political and economic engine that fueled this humble colony towards independence and ultimately toward global hegemony.

Why should managers read this book? Management guru Peter Drucker famously advocated management as a liberal art whereby the effective manager is not only a skilled administrator but is also capable of reaching across many disciplines-history, politics, economics, literature-to execute informed, comprehensive decisions, and most importantly, to be a well-rounded person in society.

Every manager should read this book to experience his or her place in American and world economic history. After incorporating Empire of Wealth into my MBA economics courses, responses from students affirmed Drucker’s philosophy.

Empire of Wealth places us there as Gordon takes us from the wretched cross-Atlantic sailing that founds the first colony, through the vast colonial expansion along the Eastern seaboard. Throughout the book, Gordon reflects on the spirit of enterprise and democracy that fuels the American economic and political development toward a horrendous revolution that yields an independent nation whose political and economic infrastructure sets the foundation for the largest economy in the world.

We are there as we strive with the political, scientific, and commercial entrepreneurs whose policies, theories, and gadgets revolutionize and escalate the American intellectual and industrial capacity to become the world’s think tank, manufacturer, and of course, consumer of everything the world can produce. We are there through the catastrophes and embarrassments that are also part of the American story-from the cataclysmic wars to the wrenching, economic depressions to the abuses of political and economic power upon workers, people of color, and foreign nations. And notably, we are there when the American reach permeates throughout the world, not portrayed as the empire of conquest, but of the empire of commerce, democracy, and yes, hegemony with all of the ensuing consequences.

Empire of Wealth corrects the condition of historical amnesia and ignorance so often held by the business student, and fills the mind with the great story of America’s strengths, weaknesses, and ultimately, its enduring promise.

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Engaged Leadership: Building A Culture To Overcome Employee Discontent

By Clint Swindall
Wiley 2007

Recommended by Charles P. Leo, PhD, Adjunct Professor of Management

In Engaged Leadership engaged employees are those dedicated to the organization’s vision. They are more productive; they relate to the organization’s culture and live by its core values. Conversely, a disengaged employee is not even aware of the organization’s vision; he simply shows up and does enough to get by.

Swindall recommends that senior management identify the top 25 percent of “engaged employees,” and challenge them to become “engaged leaders.” He believes that they will motivate the remaining employees to adapt to the organization’s vision and become more engaged.

Therein lies a tremendous opportunity to accomplish organizational goals. Essentially, the top quartile of the organization is being asked to recruit others. Most organizations develop a picture of where they want to go, and then recruit the team. Swindall thinks it is more important to recruit the right, “engaged” people, and then determine where they want to go. The key theme is that smart leaders will leverage the resources around them and help develop a culture of engaged leadership.

According to Swindall, an “engaged” leader employs three leadership styles: directional, motivational, and organizational.

While many leaders have strengths in one or two of these areas, they seldom have all three. Swindall states that “…highly successful organizations have leaders, or surround themselves with leaders, that provide effective leadership at all three levels.”

Engaged Leadership is a compelling read, however, I would have liked more of an emphasis on the steps leaders must take in developing engaged employees, such as establishing a clear vision, critical communication skills, and preparing the organization for change.

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Creative Cash Flow Reporting: Uncovering Sustainable Financial Performance

By Charles W. Mulford and Eugene E. Comiskey
John Wiley and Sons, 2005

Recommended by Dubos J. Masson, PhD, Associate Professor of Finance

Creative Cash Flow Reporting is the latest in a series of very useful texts from a pair of accounting professors at the Georgia Institute of Technology. Following their bestseller on creative accounting practices, The Financial Numbers Game, Muford and Comiskey now focus on the manipulations that can occur in the reporting of cash flows.

The authors demonstrate how the routine application of current accounting standards or other measures employed by some companies can yield misleading operating cash flow statements in financial analysis. They also provide a clear guide on how to adjust reported operating cash flow numbers to reveal earnings that may have been increased through questionable means.

In Creative Cash Flow Reporting, Muford and Comiskey apply their adjustment approach to the cash flow statements of hundreds of companies listed in the S&P 500 for the years 2000 and 2001-many of which showed significant differences between reported and adjusted operating cash flow.

This book is a must-have reference for anyone interested in serious financial statement analysis and uncovering manipulations to earnings from creative reporting of cash flows. It is recommended for equity analysts and investors, credit professionals, serious individual investors, and professional money managers.

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Truth: The New Rules for Marketing in a Skeptical World

By Lynn Upshaw
AMACOM, 2007

Recommended by John Oppenheim, Adjunct Professor, Management Information Systems

In Truth: The New Rules for Marketing in a Skeptical World author Lynn Upshaw argues that good ethics makes for good marketing, which makes for a strong company.

Upshaw cites well known companies such as Patagonia and Trader Joe’s that have thrived because of their ethical stances. He inserts valuable “how-to’s” throughout each chapter and ends with practical advice on incorporating ethics into a marketing plan, and how a marketing department can train the rest of the company on ethical behavior.

Interestingly, Upshaw uses Whole Foods Markets Chief Executive John Mackey as an example of an ethical business leader. Soon after the book was published, Mackey was involved in a scandal involving posting anonymous comments about Wild Oats on websites while trying to purchase the company. As the author presciently points out in a later chapter, every example of an ethical company can change quickly.

Upshaw maintains that in today’s skeptical world, people tend to associate a brand with a company; a bad brand image is a bad company image. Thus, while the author seems to be addressing marketing departments on how to create the right atmosphere, he also implies that it is the CEO who is ultimately responsible for ethical behavior of an organization. While the content of the book is very worthwhile, I found the reading a little difficult to get through and found it might have been done in less pages.

Nichola Groom. “Whole Foods CEO Sorry for Anonymous Web Posts,The Associated Press, Tuesday, July 17, 2007.

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The Employer’s Legal Advisor

By Thomas M. Hanna
AMACOM, 2007

Recommended by Jeffrey Schieberl, JD, MBA, Practitioner Faculty of Business Law

The Employer’s Legal Advisor is a lively exploration of some of the challenges confronting contemporary business organizations. Author Thomas Hanna, who has more than forty years of labor and employment law experience to draw upon, offers practical advice to business owners, managers, and human resources professionals on how to protect their business organizations and themselves from potential employee claims.

This book addresses the cost of litigation, issues associated with defending the company or yourself, how to preserve evidence, advantages and disadvantages of electronic devices, issues relative to establishing company policies and how to manage problem employees.

What I found to be of significant value was Hanna’s discussion of mitigation measures. More than merely identifying potential problems or issues he offers the reader practical, viable advice on strategies that can effectively minimize or possibly eliminate potential employer legal liability. For example, in chapter four the author discusses sexual harassment policies and the need to publish them. He appropriately points out that such policies should not focus solely upon sexual harassment but should also address harassment predicated upon race, ethnicity, and disability. This would place employees on notice that any form of harassment can be reported and will result in disciplinary action.

The author also effectively addresses issues relative to establishing a relationship with an attorney, how to work with an attorney and strategies relative to the often difficult and sometimes controversial decision as to whether to fight a claim or seek to settle it. As an added value, The Employee’s Legal Advisor provides a summary of key employment laws and several sample forms and policies, such as generic no-fault attendance policy and sexual harassment policy. I believe this book warrants inclusion in any business resource library.

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Fun Works: Creating Places Where People Love to Work, 2nd edition

By Leslie Yerkes
Berret-Koehler Publishers, 2007

Recommended by Danielle L. Scott, Associate Editor

What can you say about a book emphatically titled, Fun Works? For one, thankfully, it was a fun and easy read. If not I would have lost confidence in its message. Secondly, it successfully makes the business argument for integrating fun into the workplace. Thirdly, it provides practical advice on exactly how organizations can do so.

According to author Leslie Yerkes, there are 11 “Fun/Work Fusion Principles,” which, when applied, will “unleash creativity, foster good morale, and promote individual effectiveness.” Without giving away the entire book, a few of these principles are: Giving Permission to Perform, Challenging Your Bias, and Capitalizing on the Spontaneous.

Yerkes allots a short two-page chapter to each principle and provides real-life case studies of successful “fun” companies such as Pike Place Fish, Blackboard Inc., and One Prudential Exchange to illustrate her points.

In this expanded second edition of Fun Works (first published in 2000) Yerkes follows up on each company profiled to see how each one has progressed and if the fun/work fusion principles are still effective six years later. The unanimous conclusion was, unsurprisingly, yes. For example, human resource information management firm Employease, which was recently purchased by ADP, had an astonishing 95 percent employee retention rate.

Fun Works inspires managers to let go of the erroneous mindset that work and fun are mutually exclusive by showing just how productive fun can be. The final chapter of the book challenges readers to assess where they stand on each of the 11 principles and to spend the next 90 days working to improve their scores. I personally challenge you to read this book and consider how fun can positively impact your organization.

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Beyond Buzz: The Next Generation of Word-of-Mouth Marketing

By Lois Kelly
AMACOM, 2007

Recommended by William R. Smith, Jr., PhD, PCM, Associate Professor of Marketing

With a title like Beyond Buzz: The Next Generation of Word-of-Mouth Marketing, it is obvious to me that Lois Kelly intended to claim that there is an approach to word-of-mouth marketing superior to the “first generation,” as explained to us by Malcolm Gladwell in The Tipping Point: How Little Things Can Make a Big Difference and Emmanuel Rosen in The Anatomy of Buzz: How to Create Word-of-Mouth Marketing.

My initial reaction to Beyond Buzz was that Kelly’s work was straining to show she was doing something different since the practices she advocated are “buzz,” not some new form of communication. Her arguments in the early going seemed to me just warmed-over versions of the conceptual bases of arguments compellingly advanced earlier by both Gladwell and Rosen. (As an aside, I believe that Rosen’s book was more useful to managers than Gladwell’s as Rosen provided clear explanations on how to implement what Gladwell only conceptualized).

I was ready to put the book down and call it a day, but since I had been asked to write a review, I continued reading. I can now say that I am glad I did as I eventually discovered that Kelly did, indeed, have some new and different takes on some old concepts. Most importantly, Kelly presents compelling suggestions on how a company can successfully generate positive buzz about its products and practices.

For example, she conceptually develops an argument that explains the need for companies and executives to have what she calls a “point of view.” Furthermore, Kelly moves beyond presenting the case for the importance of the concept by explaining how companies can systematically go about developing points of view that will be of sufficient interest to the marketplace to cause people to talk.

My bottom line: I recommend Kelly’s book for anyone who has an interest in communicating with a market using the principles of word-of-mouth.

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