Up, up, up with people.

Play To Your Strengths Haig R. Nalbantian, Richard A. Guzzo, Dave Kieffer and Jay Doherty Mcgraw-Hill US$24.95

A few years ago, French Interior Minister Charles Pasqua criticized the rise in global neo-liberalism, saying, "The market is not what matters; what matters is the people:" Taken somewhat out of context, you could apply his thought to this book, written by directors of U.S. consultancy Mercer Human Resource Consulting. It is, essentially, a manual for corporation presidents, managers, and human resources professionals--a how-to guide for dealing with your people.

The book begins by noting that, on average, U.S. companies invest 36% of their income in their workforce. Yet the return on that investment is generally poorly studied, and worse yet, many times misunderstood. Human capital is the biggest investment many companies make, yet it is the investment they know the least about. And this happens, ironically, even though CEOs and managers spend most of their time resolving personnel issues.

The disconnect between employers and the workforce is explained by noting that, until now, companies did not have the tools necessary to measure, evaluate and predict the results of the company's human resource strategies. The authors try to soothe the anxious executive by explaining that those measuring tools are now available and, if used correctly, could give the companies that adopt them a substantial advantage over their competition.

The book quickly explains the strategies of personnel management, which can be categorized into what has been called the "new science of human capital management," as posited by the authors. The lessons can be summarized into five key points: Do not avoid radical decisions in workforce management; understand that the domestic labor market is vital in understanding the dynamic of the workforce; learn to predict the effects of a new management method on the company's results; beat competitors by using advantages that they cannot imitate; and create an efficient structure of responsibilities to optimize the return on human capital investment.

The explanation of these five points, accompanied by plenty of examples and technical data, makes up the bulk of the book, which at times can be tedious, especially for the ordinary reader. But its message is clear, and the authors base their human capital management strategies on six factors they consider essential: people, work processes, management structure, the company's grasp of information and knowledge, decision-making process, and extrinsic rewards or economic stimulants, such as salary increases, promotions and bonuses, as well as non-economic stimulants, such as recognition or honorable mentions. These factors work as an integral system, and they must balance and complement each other.

Exceptional returns. In a time when companies lay off employees and cut personnel budgets, this book can serve as a guide for deciding which cutbacks can offer real savings and which could eventually affect, and possibly destroy, the company. In case studies, it explains how companies like Toyota, Marriott International, FleetBoston Financial, ABN AMRO and others have transformed their labor force into a competitive advantage and an exceptional return.

At the same time, the authors note, traditional competitive advantages have diminished. Companies have lost many of their normal means of standing out or acquiring power and special recognition in the markets. As an example, the book points out that today nearly all businesses are able to obtain capital with relative ease, even during slow economic times. In the same way, technology is no longer a monopoly of a select few but instead is at the disposal of everyone. The competitive landscape also has changed. Extraordinary things have occurred. Small companies take over large ones; less-developed countries compete head-to-head with industrialized nations.

While these points are arguable, the old managerial maxim is still valid: "People are our most important asset." But it's not enough to gather a talented team. If that were so, it would be enough, for example, to offer extremely high salaries and thus attract the best. It's not so much about the individuals, say the authors, as it is about the way in which the organization leads them and the way it manages their efforts. That is the book's central idea and, possibly, the key to corporate success as well.