Employees are the most important asset of an organization. Committed and satisfied employees are believed to be more productive and engaged in work. It is thus very important for companies to provide the right mix of facilities, compensation, and environment – in short – the employee value proposition - to the employees.
This year, at the SHRM India Annual Conference and Exposition we will delve deeper into the concept of employee value proposition, understand its importance, and discuss how to create a winning employee value proposition. To get a sneak peak into the topic and prepare ourselves for the discussion, we got in touch with Dr. Brad Shuck, Associate Professor of Organizational Leadership and Learning, University of Louisville, Kentucky, who will be joining us to discuss Employee Value Proposition at SHRMiAC’17.
What is an Employee Value Proposition?
In simple words, it’s something that would add value to the employees and offer a return on the time and effort that they give to your company. It (EVP) helps create a brand for the company. It shows the outside world how the organization treats and how much it values its people. But, it’s not this simple. To understand in detail, we asked Dr. Brad on what actually is an EVP and if it is the same for all employees or do organizations need to design it suit individual employees? “An employee value proposition is the psychological reason(s) an employee starts, and continues to work, at a given organization. It is the emotional and very personal hook of the work and/or the organization. Employees work for varying reasons, and because of that, the employee value proposition is not the same for every employee. However, if we look at the research, there are trends that we can follow. For example, treating employees with dignity, making sure they know their work is meaningful, having fair compensatory practices and pay schedules, helping employees see a career path in the organization, and making sure that employees believe they are an important part of the organization are just a few practices that organizations can employ to drive their employee value proposition. And amazingly, many of these strategies have little to no cost at all, but so often overlooked and poorly executed in the workplace”, he explained.
What are the Non-Negotiable Components of an Employee Value Proposition?
How do we create an employee value proposition? What do the employees expect from their employers? Is there anything that should be a part of an EVP? – These are some questions that all HR professionals or organizations looking to build a winning employee proposition ask. Understanding of the requirements that employees have or their expectations not only helps add tangible value to the EVP but also makes the process of creating one easier. Dr. Brad helps answer these questions by outlining the non-negotiable of an EVP “There are three non-negotiable components of an employee value proposition: (a) procedurally fair compensation structure (b) dignity in work, and (c) belief that individual work is meaningful. Another critical component that cannot be lost in the process is understanding that each company has its own unique EVP and defining and executing it clearly helps to attract and retain the right people.
He further adds that “I do not believe that pay or compensation is an optimal motivator (and the research shows over and over again that it is not), but I do believe that an unfair, unjust, system of compensation can be a de-motivator. That is, when people do not believe they are paid fairly and/or within a reasonable system, this can cause huge problems and upset the balance of a value proposition. More, and in combination, this can cause issues of dignity. When employees believe that they are being treated without dignity, whether with their pay, or with the way they believe they are being treated (by colleagues, leadership, etc.), it changes the value proposition, and they can fail to see the meaning in their work”.
“Pay employees enough to take money off the table as an issue, and pay employees fairly for their work. Treat employees with dignity, and let the idea of dignity be a leadership lens that is a part of the narrative of your organization (i.e., we treat people well here; we take care of our team). Help people see the meaning in their work and believe they are making a difference. Do these things and you’ll have a magnetic employee value proposition.”, he says summing up the EVP non-negotiables.
The Responsibility of Creating a Winning EVP Lies with…?
As with all things corporate, here too, it is important to understand and assign responsibility. To create an EVP, we need to know who is responsible to create and drive it? Is the organization responsible for creating a winning EVP? Or is it each one of us who is part of an organization? In response to our query, Dr. Brad explained that “The responsibility for creating a happy and healthy workplace is everyone’s responsibility, including individual employees. The way we treat our co-workers, our presence in meetings, how we have joy for others, how we practice gratitude in our work, etc., all contribute to a happy, healthy workplace. However, I agree with BI WORLDWIDE’s EVP practice leader Rodd Wagner, who said that the responsibility for creating a compelling employee value proposition rests on the organization, not the employee. Happy and healthy is different from the employee value proposition”.
How to Create a Winning, Sustainable, and Measurable Employee Value Proposition?
An employee value proposition has an objective. There’s an ROI attached to it as well. It is expected to be strong enough to keep employees engaged and help retain them. So, apart from being a “winning” proposition, it must also be sustainable and measurable.
When asked how we can create such an employee value proposition, Dr. Brad shared that “My advice would be to ask these questions: why would a talented person choose to apply and then work here, and once they are here, why would they stay?”
Adding further he says that, “The answer to these questions is both winning and sustainable, and the answer is different for each company and individual employee. Getting this right is hard, because it shifts the burden from the employee to the employer, and requires leaders to identify what makes them distinct, what do they have to offer that is of value, and what do they want their organizational identity to be. Measuring this kind of EVP comes in the outcomes of having the right people, in the right places, who believe their work and outcomes matter, and who at the end of the day, believe there is a reciprocal relationship between how the employee believes the organization treats them and how they view the employee value proposition”.
Explaining the role of collaboration in creating a winning EVP, Dr. Brad says that “A spirit of collaboration among employees and between the organization and its employees is a necessary ingredient for achieving any kind of organizational success. An organization that promotes this kind of culture, adds immense value to their employee value proposition. Dr. Brad explains that organizations can create a culture where employees can collaborate and contribute to the growth by ensuring that their “leaders focus on how work gets done as they do no how much work gets done”. He further adds that “Dignity, accountability, presence, empathy, authenticity, and integrity drive performance-related behavior in the workplace. The research is not only clear, is it compelling. The why of work in this context is the value proposition – it drives behavior in ways that are actionable and visible. Work has meaning and value and leader behaviors like dignity and accountability support and sustain a strong value proposition. The how of work looks like alignment, and a seamless transition of the vision from every angle; all employees working toward a common goal, within a shared system of values, who all believe their work is not only a meaning experience, but also know that they are valued members of the team who contribute to a compelling purpose”.
This is just a short introduction to the topic. There’s more to explore, learn, and discuss. Join us and Dr. Brad Shuck at the SHRMiAC’17 to share your thoughts on what makes a winning employee value proposition!
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