2. Employee motivation and company success are related. In his book The Human Equation, Jeffrey Pfeffer shows that profit is directly related to a company’s effectiveness in motivating its workforce. He identifies seven practices that successful companies share: (1) employment security; (2) selective hiring of new personnel;

(3) empowered teams and decentralization of decision making as the basic principles of organizational design; (4) comparatively high compensation, contingent on organizational performance; (5) extensive training; (6) reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels; and (7) extensive sharing of financial and performance information throughout the organization.17 This list shows that three of the practices—job security, above-average wages, and reduced wage differentials—address lower-level needs; and three practices—

empowered teams, extensive training, and information sharing—address higher-level needs. The remaining practice, selective hiring, is made possible because these companies are desirable places to work. Pfeffer concludes that high performance requires both good pay and an enriched work environment.