Coming soon · Book Profile

The Compensation Handbook, Sixth Edition_ A State-of-the-Art Guide to Compensation Strategy and Design

An authoritative and comprehensive guide for compensation professionals on designing, implementing, and managing state-of-the-art total rewards strategies to drive performance, win the talent war, and create a sustainable competitive advantage.

A profile of this book is on the way.

Get the book →

What it’s about

For over 40 years, The Compensation Handbook has been the definitive reference for compensation professionals. This sixth edition continues that legacy, offering a state-of-the-art guide to navigating the complexities of modern reward systems. With contributions from 63 leading experts, this comprehensive volume covers everything from base salary and variable pay to executive compensation and global rewards. It provides actionable frameworks and best practices for aligning your total rewards strategy with your organization's business objectives, values, and culture. Featuring an entirely new section on leveraging "big data" and workforce analytics, this book equips you to make smarter, data-driven decisions that enhance employee engagement, attract and retain top talent, and deliver a measurable return on your compensation investment, ultimately creating a powerful competitive advantage.

The through-line

Who it’s for: A compensation professional, HR leader, or line manager responsible for pay decisions, who wants to design and implement effective compensation programs that attract and retain top talent, drive high performance, and contribute demonstrably to the organization's strategic success.
The problem: The business environment is intensely competitive, the 'war for talent' is relentless, and compensation practices are under constant scrutiny from shareholders, regulators, and employees. Traditional, static compensation methods are failing to deliver results. The reader feels pressured to justify compensation spending, prove the ROI of their programs, and meaningfully link pay to performance, but they are often hampered by outdated systems, entitlement mentalities, and a lack of strategic alignment. They worry their programs are a costly administrative burden rather than a source of competitive advantage.
The plan: Align your total rewards programs with your organization's unique values, business strategy, and talent needs.
Master the best practices for designing and structuring base salary, variable pay, executive compensation, and global rewards.
Learn to effectively link pay to performance through robust performance management, appraisal, and calibration systems.
Leverage the power of 'big data' and workforce analytics to make smarter decisions and measure the return on your compensation investment.
Develop a powerful communication strategy to ensure your programs are understood, accepted, and motivational.
The payoff: The reader becomes a respected strategic business partner, confidently designing and managing compensation programs that deliver measurable results. · The organization successfully attracts, retains, and motivates top talent, creating a high-performance culture. · The company gains a clear competitive advantage through its strategic and effective use of human capital.

See our guide

Design A Compensation System →

Related profiles we’ve built

Additional reading

Human Resource Champions · David Ulrich
The preface references this as a landmark book in the effort to define HR core competencies and the role of HR as a strategic business partner.
The Human Side of the Enterprise · Douglas McGregor
Mentioned in the preface as a key influence in shifting the perspective from 'personnel administration' to 'human resource management,' providing historical context for the evolution of the HR function.
The Compensation Handbook, A State-of-the-Art Guide to Compensation and Design · Berger, L.A., and D.R. Berger, editors
This book provides a deep dive into the practical application of finance and accounting; a broader handbook like this one would provide context on the design elements (internal/external equity) that this book deliberately does not cover in detail.
Pay and organizational effectiveness: A psychological view · Lawler, E. E., III (1971)
This is cited as a foundational text that comprehensively applied psychological theories, particularly expectancy and equity theory, to understand how pay systems affect employee motivation and behavior.
Economics, organization & management · Milgrom, P., & Roberts, J. (1992)
Serves as a key reference for the 'new economics of personnel,' particularly agency theory. The book uses its concepts to frame decisions about behavior- vs. outcome-based contracts and the challenges of incentive design.
Internal labor markets and manpower analysis · Doeringer, P. B., & Piore, M. J. (1971)
This is the seminal work on Internal Labor Markets (ILMs). It is central to the book's discussion of pay structures, explaining why internal pay hierarchies and career paths cause firm pay practices to deviate from external market rates.
The winner-take-all society · Frank, R. H., & Cook, P. J. (1995)
The book draws on this work to explain the dramatic growth in pay for top performers. It provides a key theoretical lens, alongside tournament theory, for understanding why executive pay and pay differentials have become so large.
Human capital: A theoretical and empirical analysis · Becker, G. (1975)
This is the foundational text for human capital theory. The book uses it to explain the supply-side determinants of wages, where individuals' investments in education and experience influence their earnings.
Organization Design for Performance: A Step-By-Step Guide · Cedric Ng Mong Shen
This book is relevant because 'Design' is the second dimension of organizational effectiveness discussed in Step 1. It provides a deeper framework for structuring departments and companies, which directly impacts the sales function's effectiveness.
Designing Salary Structures: A Step-By-Step Guide · Cedric Ng Mong Shen
Directly complements the main book by detailing how to create the base salary structures upon which the incentive portion of total cash compensation is built.