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Jul 14 2011
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Business, Employee Engagement, Human Resources, Management

Employee Value Proposition – Think Delivery, Not Just Design & Communications

I have been thinking about one of the hottest trends in HR circles – Employee Value Proposition. The origin of Value Proposition perhaps is in strategy and marketing. Kaplan & Norton, who introduced the world to Balanced Scorecards, said – “Strategy is based on a differentiated value proposition. Satisfying customers is the source of sustainable value creation.” Which leads us to another commonly used term Customer Value Proposition. Wikipedia defines it as – “a Customer Value Proposition consists of the sum-total of benefits which a vendor promises a customer will receive in return for the customer’s associated payment.” Essentially, we are talking about a the “delivery of a promise” in return for something that’s valuable to the customer (usually money payment, search costs etc.). The “promise” itself isn’t sufficient, the delivery is critical to the value proposition.

Employee Value Proposition (EVP) can also be understood in a similar way. It is the sum-total of benefits and experiences a company promises an employee in return for the employee’s time and efforts. The EVP can include compensation, benefits, learning & development opportunities and the overall workplace experience. Usually, companies would define their EVP through some combination of these. So, that’s the promise. But, the crucial challenge for HR, leaders and managers is to deliver on the EVP.

Many a times, I see HR professionals in a rush to define the EVP and communicate it to the world. We want to create a message, come up with great tag-lines, brand the communications and throw it out. Advertisements, posters, billboards, social media – you can do it all and still achieve nothing. A badly execution EVP strategy can never solve talent attraction and retention problems. To be effective in the EVP initiative, it is equally or more important to think about whether existing systems, policies, culture, management style and processes support the delivery of the EVP. If not, then we need to think about what changes are required. Your Employer Brand could fail miserably if the brand doesn’t deliver on the promises. And in this day and age, sentiments are often vented quite openly on public channels.

So, if your EVP promises “a culture that thrives on teamwork, leveraging collaboration to solve X challenges”, but employees join the organisation only to find silos, then its a failure. Or if you promise “performance based pay and best-in-class benefits”, but pay is driven by tenure and benefits are just about average when compared to other organizations, employees will feel disenchanted. The list of examples can be endless.

So, the first step is to look within, not outside. Look within and ensure that the delivery mechanisms are in place. If you get it right, you will just end up creating engaged employees, who also act as advocates for the Employer Brand. It’s as much about the delivery, as it is about the those feel-good, slick communications.

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Jul 06 2011
8 Comments
Blogging, Business, Employee Engagement, Human Resources, Leadership, Management

Carnival of HR – The Talent Race

Alright people! I bring to you the latest Carnival of HR. Themed as “The Talent Race”, this edition contains interesting posts about how could organizations effectively Attract, Engage and Retain their employees and what are the latest practices in Talent Management. Additionally, I wanted to have some Asian flavours by getting posts by people writing about the Asian context. Unfortunately, I didn’t get many posts about talent management practices from Asia. And that means that one, we need more professionals in Asia to blog on the subject and two, I need to expand my Asian network even more!

  • Jon Ingham is one of my favourite bloggers. He feels that there is a need for a differentiated unique proposition for people management. Sticking to the theme of “talent race”, he shares how Haier (a consumer electronics MNC that started off in China) established race tracks for a unique way of managing their talent base.
  • Laura Schroeder wonders where has all the talent gone. She analyzes reports from the Economist Intelligence Unit and Bersin & Associates to come up with strategies to bridge the talent gap.
  • Tanmay Vora writes at the QAspire blog and shares with us some Core Lessons in Leading & Managing People. He says that “working with people, guiding a team and helping them in their quest for peak potential is one of the noblest things we can do as leaders. It is an opportunity and an obligation as well.
  • As HR professionals, we are often heard advising employees to “take charge of your own development”. But do most employees really know how to do this? In this post, Dan McCarthy, from Great Leadership, offers a free step-by-step self-study guide to developing leadership skills. Best of all, it’s free to use and/or share, as a way to engage and retain valuable employees who are willing to learn on their own but need a little structure”.
  • Heard about the “HR Hairball”? Find out in this excellent post by Mark Stelzner.
  • It might be important to hire employees for their skills, but hiring for culture-fit is really important as well. Wally Bock shares his views on Hiring Well. One of my favourite lines from the blog post – “Performance and growth are often situational”.
  • Amy Wilson writes about transforming existing performance models into one that is more work-centric and embedded in the natural flow of business to get the best work done.
  • A strong learning & development platform is critical for organization looking at managing their talent base effectively and driving sustained business performance. Linda Fisher Thornton from Leading in Context shares 11 Learning & Development Reports. Informative!
  • Anita Lettink feels that “best practices” may not always work for you because you have your own unique context. Instead, she shares some guidelines for winning the Talent Race.
I would like to thank all the contributors for sharing their ideas. Also, thanks to Shauna Moerke for the giving me the opportunity to host the Carnival of HR.
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Jun 26 2011
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Blogging, Business, Human Resources, Management

Upcoming Carnival of HR

After a long long wait, I am ready to host my first Carnival of HR.

As a consultant, I constantly meet HR professionals and get great opportunities for conversations. What I realize from these conversations is that most HR professionals are in a race – the “Talent Race”. And the race seems to get hotter and harder as some parts of the globe ease out of the economic downturn and are preparing for the next growth phase. So, tell me more about what are your latest & greatest ideas about winning the race – specifically how do you think we should go about attracting, engaging and retaining talented people in our organisations? What’s new in talent management?

And since I am based in sunny Singapore, posts with an Asian flavour would go to the top of the pile! So, start putting your thoughts together and write out the next best idea. Few things to keep in mind:

  • Submit a recent post. Something that is written in the 2 weeks preceding the Carnival
  • Send me the posts by 4th July, 2011. My email is i at abhishekmittal dot com
Hope to hear from you soon!
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Jun 09 2011
5 Comments
Employee Engagement, Human Resources, Management

Designing an Effective Recognition Program (Interview)

A lot of employee research highlights the importance of “recognition” in enhancing employee engagement and reinforcing the right behaviours that benefit the company as well as the employees. Often, I find companies taking a slightly ad-hoc approach to recognition and often such programs end up not being targeted, frequent and in the true sense, rewarding.

To better understand what makes for a robust recognition program, I did a short interview with Derek Irvine of Globoforce. Derek is Globoforce’s Vice President for Client Strategy & Consulting and is one of the leading voices on employee engagement, strategic recognition, talent management and business performance.

Q. There is something you call “Strategic Recognition”. Could you share with me what Strategic Recognition is all about and how it benefits organisations?

Derek: Strategic recognition means integrating employee recognition with a company’s core values and strategic goals. This helps employees understand the behavioural norms you have identified as necessary for achieving the desired business outcome—and strategic recognition does this for every employee in your company, regardless of where they live and work. The benefits of strategic recognition can be categorised in three ways:

1) Increased alignment with the company values and strategic objectives to ensure employees are recognised and rewarded only when they achieve desired targets by behaving in ways the company has deemed appropriate to success.

2) Increased employee engagement because employees intimately understand how their daily efforts contribute to achieving the bigger picture, resulting in increased productivity and performance. Our clients regularly realise double-digit increases in employee engagement in less than a year.

3) Increased retention of employees by ensuring employees know their value to the organisation and also building stronger bonds between employees, colleagues and managers.

Q. Human Resources professionals often draw out recognition programs for their organisations. What are some of the missing ingredients in such programs based on your experiences? What are the key elements to consider while designing such programs?

Derek: In some organisations, the first hurdle to clear is helping those responsible for designing their organisation’s recognition program to understand that recognition is not a Years of Service or Long Service award program. At least, employee recognition is not just Years of Service. In the same vein, employee recognition is not just sales or customer service incentive initiatives.

The first step is therefore broadening the understanding of employee recognition to anything and everything you as an organisation, manager or even peer do to acknowledge, praise and appreciate the hard work, success and achievements of colleagues. Once that understanding is in place, we can move into the key elements to consider when designing a truly strategic recognition program. We call these key elements the Five Tenets of Strategic Recognition:

1. A Clear Global Strategy for a consolidated recognition program flexible enough to allow for peer recognition, spot recognition, milestone anniversary recognition, etc., while creating visibility and auditability into the recognition budget spend across the globe for improved governance.

2. Executive Sponsorship with Defined Goals to signal senior management support and establish a management methodology including clear targets for success and meaningful measurement and reporting functionality linked with company strategic objectives.

3. Aligned with Company Values to ensure all recognised activities are associated with a company value, helping employees understand how their direct actions and behaviours impact achievement of company goals and giving managers dashboard insight into the traction of each company value by employee, region, division or department.

4. Opportunity for All to Participate to empower and unite the entire workforce, not just the top performers, behind the company’s strategic objectives and values. Top performing companies ensure 80% of the global workforce will be touched by the recognition program each year, largely through peer-to-peer recognition.

5. Offer the Reward of Choice to reinforce the recognition recipient’s positive association with the company through personally memorable, culturally relevant, locally based rewards.

Q. Is there a measurable ROI on strategic recognition programs?

Derek: Yes. Strategic recognition is proven to increase employee engagement by double digits, improve employee performance and reduce employee turnover. Gallup found in research last fall that employees do not become engaged just because they work for a financially successful organisation. Rather, employees who are engaged drive financial results. And those results are significant. In their 2007-2008 Global Workforce Study, Towers Watson found that companies with high employee engagement vastly outperform low-employee engagement firms in terms of operating income, income growth rate, and earnings per share. In an earlier study, Towers Watson calculated that a 15% improvement in levels of employee engagement correlates with a 2% improvement in operating margin.

In terms of retention, Gallup found organisations with high employee engagement had 37% less employee turnover. Considering the cost of replacing just one employee is 75-150% of that person’s salary, increasing retention alone can have a significant impact on the bottom line.

Aside from the benefits of increasing employee engagement with strategic recognition, the ROI benefits of strategic recognition directly on employee performance and productivity are profound. Especially in today’s world of rapid change, the ability to communicate to employees changing priorities and company strategies in a way that makes sense to employees in their daily work is itself a primary benefit. Quickly re-focussing employees precisely on most critical tasks in a positive way ensures employees remain at their most productive.

Q. In your opinion, are non-monetary forms of rewards & recognition as effective as monetary forms?

Derek: Non-monetary rewards are far more effective than monetary ones. Much research supports the fallacy of “give them more money” as a reward strategy. The most obvious example is the bonus culture that led to egregious behaviours in the financial world and, in many ways, the Great Recession. I argue base compensation in these firms should be much higher, with regular, frequent recognition of achievements and no ridiculously high year-end cash bonus.

Cash is an inappropriate reward mechanism because cash is the currency of compensation – of base pay. To be differentiated in a recipient’s mind, rewards must have a different currency.

These non-monetary rewards can still have economic value to the recipient and do have their place in a strategic program. Non-cash rewards in the form of gift cards to local high-value, lifestyle venues around the world take rewards beyond compensation to trophy award status. Recipients can choose rewards in their local neighborhoods, supporting their local economies and vendors they trust, or they can choose to enjoy rewards anywhere in the world. Options are limitless – shopping, dining, travel, adventures, sporting events, concerts, shows, even charities around the world. Employees who are deserving of recognition are also deserving of memorable rewards with unrestricted choice.

Q. Finally, what are 3 recent books that you enjoyed reading?

Derek: 

1. Delivering Happiness. The Zappos story is great in terms of follow your passion, and have the courage to build the right culture.

2. The Thank You Economy. What he describes as a mega trend for brands and the impact of all things social is going to be enormous for company cultures, and how to actively manage your culture – something I’m passionate about too.

3. Good Boss, Bad Boss. Contemporary management practices are shifting fast, the bad bosses had better catch up quick, or they’ll fall off the cliff before they even notice!

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That’s it for now folks! I thank Derek for making time for this and you could also follow Derek’s blog “Recognize This!”.

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May 31 2011
5 Comments
Business, Human Resources, Leadership, Management

PWC Research : The Talent Race

I was looking at a recent research report from PWC on its Global CEO Survey 2011. Apart from interesting data on strategic priorities, innovation, business confidence, sustainability etc., it also touches upon the talent agenda through a section titled “The Talent Race”. I pulled out a few slices of data, which I found interesting. And since I am in Asia, I was keen on comparing the Global data with Asia-Pacific data. The chart below talks about the key challenges highlighted by CEOs, considering the talent required for business success over the next 3 years:

The top challenges highlighted for Asia are – limited supply of candidates with the right skills, competitors poaching talent, global talent deployment and inflexibility of talented people. As the Asia growth machine turns faster, companies are definitely feeling a talent squeeze. But are too many companies simply “buying” talent, rather than investing to “build, deploy, grow, retain” talent? Also, interestingly, “providing attractive career paths” is cited as less of a challenge by CEOs in Asia. I am not entirely sure how to read this because most of my experiences seems to suggest that this is a continual challenge for companies here. Is there a potential disconnect between what leaders and employees think?

The report also states that over 80% of the CEOs globally are seeking a rethink of their people strategy. When asked about what changes they anticipate in their people strategy over the next year, the response are as follows:

Use of non-financial rewards to motivate staff is right at the top of the list. (“Meaning” is the new money?) Leaders in Asia are also looking at deploying more employees on global assignments as they expand. There is lesser focus on incentivizing younger employees differently, which makes me again wonder if focusing on age-groups is useful or should we really focus on “life-stages” of employees. In Asia-Pacific, there is the same level of focus on attracting and retaining women in the workforce as the global levels, but the focus on recruiting / retaining older workers is higher in Asia-Pacific.

Of course, these are just some of the insights from the study. Tell me what else you found interesting!

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