Treat Your Employees Like Consumers

Designing Programs That Yield Results

At this point, senior executives often say, “This is all very interesting and inspiring, but does it actually have an impact on business results for these organizations?” The short answer is yes.

A recent Towers Watson survey of 1,605 organizations in more than thirty countries found that companies guided by an employee value proposition reflecting an integrated approach to decision-making regarding total rewards strategy, design, and delivery are five times more likely than their peers to have highly engaged employees. And they’re twice as likely to perform significantly above their peers financially.

To create an internal brand that is both deep and financially sensible, employers must combine information about current and potential employees’ preferences with data on the cost of delivering various reward portfolio elements. The objective is twofold: First, define the value proposition most appealing to key demographic groups; second, shift funds to high-value rewards and away from low-value programs that are too costly for the results they produce. For many decades, consumer-oriented companies have been doing this with their external consumers. They have conducted increasingly sophisticated market research to estimate how their target segments will respond to the features, prices, and packaging of existing and proposed offerings. It turns out that this approach works well for internal consumers, too.

Employers can conduct several types of research to examine how employees in various segments value “hard” programs such as compensation and benefits, as well as “soft” programs such as career development and the work environment:

Focus groups. Talking with small groups of employees about how they view the organization’s programs can provide insights about changes those workers are likely to value.

Data mining. By analyzing Big Data in the company’s HR information system, employers can learn how employees use such elements as healthcare benefits and 401(k) plans. For example, discovering that only 3 percent of a division’s high-potential employees younger than 30 contribute to the retirement savings plan reveals something about those employees’ perception of the plan’s value and their ability to harness it.

Employee surveys. There are many ways to engage employees in a formal research process to learn how they value and use programs. One high-tech organization asked employees how familiar they were with each element of the reward array, how valuable they perceived each element to be, and how they believed each element stacked up against competitors’ offerings. The employer compared these data with the actual competitive position of the company’s rewards and the commitment levels of employees in various segments. The results gave leaders important guidance on how to reallocate the company’s reward investments to improve employees’ commitment and how to communicate with employees about making the best of the rewards offered. The analysis then drilled into results for the company’s China-based workforce—a strategically critical and rapidly changing employee segment.

Trade-off analysis. Program trade-off analyses provide some of the richest data available on what employees see as the most and least valuable components of their reward packages. Such an analysis also gives them a sense of the decisions that leadership needs to make about where to put program investments. The information helps leaders make the right investment decisions to deliver a value proposition likely to foster the desired employee (read: consumer) behaviors.

Consumer-Grade Delivery

Leading companies are taking cues from externally focused, consumer-targeted efforts—which have given rise to the popular concept labeled “consumer experience”—as they examine and reshape the employee experience. This means understanding the impressions that employees form across a range of experiences with the organization, from the talent selection process to onboarding, performance management, compensation, benefit programs, career progression, and retirement.

As the chief HR officer of one global life-sciences company said recently, “Just as the chief marketing officer has become the chief consumer-experience officer, I have become the ‘chief employee-experience officer.’ That’s a long way from being a personnel manager.”

To understand this employee experience concept, one need only consider certain signature consumer experiences today: the simplicity of finding and buying a book on Amazon.com; the welcoming experience at a Ritz-Carlton hotel; the look and feel of a brochure at a Lexus dealer; the helpfulness of the Whole Foods clerk who knows just where to find the local organic cheese that’s perfect for a dinner party; the essential app a user can seamlessly download to a smartphone to use on the train on the way to work.

Each of these experiences, and many more like them, set the bar today for what people expect when they engage with an employer. Employees evaluate the ease and appeal of their work experience not just by what they’ve come to expect from HR, but also by what they experience every day: culture, work environment, leadership messages, and reward programs.

To savvy employees, consumer grade means:

Coherent, consistent messages. Employees expect the content and look-and-feel of employee communications, programs, and the workplace to be consistent with the company’s brand, mission, and other promises. This includes email messages, websites, printed materials sent to employees’ offices or homes, leader presentations and videos, the design of the work environment, and the design of compensation and benefit programs.

Communication via multiple media and channels. Workers want information to be available on their terms, whether on paper or accessible on any device at any time. They also want support as needed from an HR professional, a help line, a vendor, or a manager.

Easy-to-navigate technology. This means minimal screens and clicking, along with appealing elements, such as whiteboards, video, and games where appropriate. Employees want tech tools to be fun and absorbing while also informative and useful.

Secure data with streamlined access. Employees do not want extraneous data requests, and they want assurance that their personal information is protected and kept confidential.

Continuous improvement. They want management to test and continuously refine technology, vehicles, and communications. The challenge for the employer is to deliver an employee experience that aligns with the experience of the organization’s external customers.

One global bank has taken this challenge to heart with an internal information campaign aimed at improving employees’ financial awareness. Leaders recognize the importance of being consumer-minded as they guide employees to make saving and investment decisions carefully. The bank believes it’s the right thing to do as an employer, especially given its position in the retail banking business. For a journalistic feel, the campaign uses whiteboards and mini-documentary videos, with employees talking about their lives and life plans. A peer organization is now doing the same with its choice-based healthcare programs.

Achieving a consumer-grade level of excellence also means setting employee expectations, not lagging behind them. Aviva, an insurance and asset-management company, kept this in mind in developing its pension-plan website. As employees navigate through the site, they participate in a game called Save Your Future. The game tests the user’s understanding of basic financial concepts and of Aviva’s retirement contribution plan. The user scores points for answering questions correctly: A low scorer is labeled a Retirement Rookie, someone who needs to focus more on saving for retirement and on understanding the Aviva benefit; a high scorer might be dubbed a Super Savings Whiz, a disciplined saver who must stay the course to ensure a comfortable retirement.

Aviva collects data on employees’ use of employer-provided retirement planning tools, and the information helps leaders upgrade the employee experience. Initial results from Save Your Future showed that many employees did not understand investment asset allocation. That finding led management to develop a series of short films on how to think about investment decisions.

Organizations that understand and act on employees’ needs and preferences are likely to have motivated, committed workforces. And they have found that even with reward budgets no greater than less market-oriented peers’, prudent and disciplined organizations can achieve these goals. Their employees will serve customers better, innovate more frequently and consistently, and protect company assets more conscientiously. Data and experience suggest that superior financial results will become part of the equation as well.

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