We enthusiastically welcome Barry Gerhart to our author partnership. George worked closely with Barry when both were faculty at Cornell. They have collaborated on several articles on human resource issues, especially compensation. Barry has also coauthored a general HR text and is widely published on pay and performance issues. Most important, though, he is a good person who adds considerable value to our team.

All chapters have been revised. Every one includes updated comparisons of the pay strategies or practices used in specific, named companies. Some of these are well established and successful (IBM, Medtronic, Microsoft, Merrill Lynch, Toyota), some face real problems (General Motors), and others are using unique practices (Google, Whole Foods). This edition continues to emphasize the importance of total compensation and its relevance for achieving sustainable competitive advantage. It reinforces our conviction that beyond how much people are paid, how they are paid really matters. Managing pay means ensuring that the right people get the right pay for achieving objectives in the right way. Greater emphasis is given to theoretical advances and evidence from research. Throughout the book we translate this evidence into guidance for improving the management of pay.

Chapter 2 explains how to craft a total compensation strategy and how to analyze strategies used by competitors. Chapters on performance-based pay dig into all forms of variable pay such as stock options, profit sharing, gain sharing, and team-based approaches. We focus on both the effectiveness and costs of these practices. Changes in competitive market analysis caused by outsourcing and global competition are covered, as well as the increased use of market pricing and broad banding. Employee benefits, always changing and always important, are covered in two chapters. Why, for example, did McDonald's choose to launch expensive employee benefits when others are trying to limit benefits? Chapter 14 broadens its discussion of board-of-director compensation, executive compensation, and sales compensation. As always, we have used international examples in every section. We also have completely revised our chapter on global compensation. Software to aid both employees and manager decisions is covered, and we have renewed the focus on measuring the value gained from pay systems. Ethics, values, and the apparent absence of standards of conduct in compensation management, so widely reported in today's headline news and dissected in blogs, are discussed. Each chapter has links to interesting Internet sites that open up valuable information sources related to compensation and benefits.