There’s a big disconnect in organizational management. On the one hand, research, experience and common sense all point to a direct relationship between a company’s financial success and its commitment to management practices that treat people as assets. Yet, in spite of this evidence, trends in management practice are moving away from this approach. Why is common sense so remarkably uncommon when it comes to managing people? Why do companies habitually overlook readily-available opportunities to boost their financial performance?
This book critically examines the people management practices prevalent in many of today’s businesses. It argues that much of the conventional wisdom is actually tremendously destructive both to the employment relationship and to organizational performance. Drawing on research on numerous companies, industries, and countries, The Human Equation builds an irrefutable business case that the culture and capabilities that come from how firms manage their people provide real and enduring sources of competitive advantage. The book confronts:
- Troubling trends in compensation
- The destructive consequences of downsizing—and some alternatives
- The real economic effects of labor unions and the possibility of achieving positive labor-management relations
- The idea that the stock market is always right and competitive pressures will invariably cause companies to manage in an optimal fashion
- The possibility of a positive, effective role for public policy and regulation in making companies, and economies, more effective.