This book investigates the complex relationship between employee compensation and organizational effectiveness from a psychological perspective. Edward E. Lawler, a noted organizational psychologist, draws upon psychological theories and empirical research to explore how various pay systems influence employee motivation, job satisfaction, and overall performance. The book examines the psychological impact of different compensation structures, including base pay, incentives, and benefits, and their subsequent effects on individual and group behavior within organizations.

This work is recognized for its foundational contribution to understanding the psychological underpinnings of compensation strategies in organizational settings. Lawler's approach integrates psychological principles with practical business applications, offering insights into how pay systems can be designed to enhance effectiveness. The book is considered a valuable resource for students and professionals in organizational psychology, human resources, and management.