How to evaluate the effectiveness of your employee value proposition

What drives employee motivation, satisfaction and commitment? Our research uncovered 7 critical elements of an effective employee value proposition. Learn more.

How to Evaluate the Effectiveness of Your Employee Value Proposition

For decades, leaders and managers have searched for ways to increase employee commitment by developing compelling employee value propositions (EVPs). 

Considering the expense associated with turnover, this makes sense. Researchers have estimated that turnover costs range from 90 to 200 percent of an exiting employee’s salary. When turnover increases, the social fabric of an organization weakens, intangible knowledge and skills are lost, operational effectiveness decreases, accident rates rise, customer service and quality suffer, and customer satisfaction declines. All of these consequences can derail performance.

So what’s the best way to develop a compelling EVP?

To answer this question, we analyzed our global normative database, focusing on employee attitudes about seven critical aspects of their organization’s value proposition: reward for performance, compensation, benefits, career development, support for wellness, sense of belonging, and meaningful work.

We wanted to understand the extent to which employees’ satisfaction with each offering is related to five important outcome measures: their level of motivation, overall satisfaction, advocacy (i.e., willingness to recommend the organization as a place to work), commitment, and intention to stay. Using meta-analytic techniques, we analyzed data from over five million employees working in 149 organizations and 172 countries.

Meta-analytic correlations (see table below) reveal four main findings.

  1. We found significant relationships between all seven EVP elements and all five outcome measures.
  2. Career development yielded the strongest correlations with most outcome measures.
  3. Our results suggest that employees are more likely to be motivated to go above and beyond when they feel they are doing work that is personally meaningful.
  4. Finally, both a strong sense of belonging and support for wellness are highly correlated with employee commitment and intention to stay.
Correlation, of course, does not prove causation. But taking into account the amount of data that was analyzed, as well as the size of the relationships that emerged, these results raise critical questions for anyone seeking to build a high-commitment work environment.
  • Is your total rewards strategy broad enough? 

    Considering that all seven EVP elements were related to all five outcome measures, organizations should ensure that their employee value propositions offer a mix of financial rewards, development opportunities, support for health and wellness, and fulfilling work experiences. Focusing narrowly on just one element—particularly extrinsic motivators like compensation—may not be effective.
  • Are career paths in your organization clear?
    Our results emphasize that career development is particularly important to employees. But based on our Global Talent Trends 2018 report, few organizations are focusing here. When we asked senior HR professionals to evaluate 16 aspects of their organization’s EVP and rank order the extent to which each was compelling and differentiated, they ranked their organization’s learning and development offerings dead last. Considering the looming skills gap that many organizations face as they prepare for the future of work —as well as the strong correlations we found between employees’ perceptions of career development and their motivation, satisfaction, advocacy, and commitment levels—this is a critical place for organizations to focus their time and resources.
  • Do your employees think they are doing meaningful work?
    Researchers like Herzberg and Hackman and Oldham discovered the importance of meaningful work decades ago, and the pattern of results we found provides strong evidence that it is still critical for today’s workforce. Based on our experience and research, we have found that leaders and managers can make work more meaningful through their actions and behaviors. Hiring managers should also place a heavy emphasis on purpose and meaning when selecting and screening job candidates: we have found that when employees see their job as their personal vocation or calling, they are significantly more engaged and committed.
  • Is there a strong sense of community in your organization?

    In recent years, a growing number of researchers have focused on the causes and consequences of loneliness at work. According to former U.S. Surgeon General Dr. Vivek Murthy, an epidemic of loneliness is emerging within many organizations. When employees feel lonely at work, researchers are finding that everything from their physical and psychological health to their commitment and performance may decline. At the core of these studies is a common theme: workplace loneliness undermines both employee wellbeing and organizational effectiveness. In our study, we found that when employees feel a sense of belonging at work, they are more likely to be motivated, satisfied, and committed.  In light of these findings, leaders, managers, and HR professionals should ensure they are building a workplace where employees feel supported, accepted, and welcomed.

    To answer these four questions, data is required. By assessing the extent to which your workforce is satisfied with the various elements that make up their total rewards—and then evaluating the relationship between satisfaction levels and workplace behaviors and performance outcomes—you can determine the unique mix of EVP offerings that will attract, motivate, and retain your employees.

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