Business results are better and employees are more engaged in their work at companies with formal, developed rewards programs than at companies with less-developed rewards programs, a consultant said May 1 at the WorldatWork Total Rewards 2013 Conference in Philadelphia.
The compensation-benefits combination that employees are offered, known as an employee value proposition, exists in some form at all organizations, said Laura Sejen, director of strategic rewards at Towers Watson.
Companies' progress in developing and realizing their employee-value propositions are tracked in Towers Watson's annual talent management and rewards survey using an EVP and Total Rewards Index that divides companies into four groups based on how formalized their employee-value proposition and total rewards programs are, Sejen said.
The 2012-2013 survey found that the companies with formal, articulated employee-value propositions also had the best business performance overall, Sejen said. These companies also were less likely to report problems with attraction and retention, she said
The elements that factor into an employee-value proposition include total rewards; the job, its culture, and its people; and the company's purpose and values, she said.
Although companies' approaches may differ, typically an effective employee-value proposition includes certain benchmarks: a formal employee-value proposition is developed, communicated to employees, and aligned with what the organization stands for in the marketplace, Sejen said.
Good employee-value propositions create specific objectives for each talent management and reward program, Sejen said. High-performing companies also tend to customize employee-value propositions for critical employees, she said.
Companies then test the effectiveness of their total rewards programs using organizational analytics, such as examining business performance and workforce performance.
Hopefully, the research makes the case that employee-value propositions are a really effective tool to create balance between what employees want and what companies want and can help lead to improved business results, Sejen said.
By Laime Vaitkus