The 1980s and 1990s saw a burgeoning literature on high-performance or high-commitment management practices—an approach that reliably produced a 30%-40% difference in productivity and other dimensions of performance. The evidence was increasing that how companies managed their people was the single most important factor accounting for variation in performance. Moreover, there were a relatively small number of management practices that cut across the myriad studies of companies in a variety of industries and countries.
I was teaching Stanford’s required course on human resource management having helped developed the predecessor elective class on this same subject. When I went to find a book to use with the class, I didn’t see one that I liked. Most books on human resources dealt with the details—job analysis, compensation design, anti-discrimination practices, and so forth. But I needed a book that would approach managing people from a more strategic perspective.
So I wrote The Human Equation to be used in classes on strategic human resource management and also to inspire and educate companies and their leaders about how to manage people to produce sustained competitive advantage.