Many companies around the world lack a long-term plan on how to get the most from their employee value propositions (EVPs)—the employment deal that defines what an employer expects from its staff and what it provides in return.
This is according to a new Towers Watson study of organizations in North America, Europe and Asia.
The survey indicates that firms that use their EVPs most effectively are five times more likely to report that their employees are highly engaged and twice as likely to report achieving financial performance significantly above their peers when compared with companies that use their EVPs less effectively. However, the study shows that most organizations fail to realize these benefits due to shortfalls in their deployment of the EVP and that less than half (43%) of their HR and communication teams have a long-term plan in place to support that deployment.
Highly effective EVPs have four characteristics in common, according to the survey. First, they are comprehensive and balanced, combining factors such as pay, bonuses and benefits with work environment and teamwork.
Second, effective EVPs are differentiated, which means that they stand out from the EVPs of their competitors and are appealing to talent.
Third, effective EVPs are business-oriented, driving the employee behaviours that are necessary for delivering on company strategies and helping the company become financially successful.
Fourth, these EVPs focus on employees, helping them understand how their individual needs are met.
“The EVP defines the employment deal,” says Laura Sejen, global rewards leader at Towers Watson. “What we found, though, is that low EVP effectiveness companies discuss the deal in terms of the programs they provide and how valuable they are. But the best companies go much further. They discuss how they meet their employees’ expectations and, in return, what behaviours they expect employees to exhibit to help them succeed.”
Conducted in September 2013, the survey polled 207 large and mid-size organizations from across North America, Europe and Asia.
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