Article: Employee value proposition: What, how and why

Employee Engagement

Employee value proposition: What, how and why

Employee Value Proposition (EVP) influences employee commitment and organisational success by systematically developing a holistic narrative that aligns with employee expectations.
Employee value proposition: What, how and why

What is an employee value proposition? 

The Employee Value Proposition (EVP) is a pivotal differentiator and a unique strategic approach to employee management It encapsulates the value or benefits that employees perceive or gain from being associated with an organisation (Herger, 2007; Britten et al., 1999; Minsay & Bosch, 2009). The concept of EVP requires a delicate equilibrium between what an employer offers and the expectations of the employees. Extensive research indicates that EVP represents a defined employment relationship highly valued by employees. It serves as a distinguishing factor, setting an organisation apart from its competitors, and emerges as a potent tool for both acquiring and reinforcing employee commitment (Bell, 2005).

The systematic approach towards creating employee value proposition- 

Assessing the current state of the company aspirations of the employees- A good starting point is always to know the current state of the organisation's offerings, employees' experience with the offering, the desired offerings of the organisation, and the expectations of the employer and employees. 

An insight by collecting information is always beneficial. One of the ways has been leveraging OCAI (Organization Culture Audit Instrument). For instance, an organisation's current state may be controlled and hierarchical with some degree of collaboration, and the desired state might be to move towards creating and competing; the desired state can become part of the organisation's narrative of curating an employee value proposition.

The desired state would also give an understanding of the expectations of the current employees, which would help the company strengthen the commitment and sense of belonging of the current employees. After the qualitative and quantitative data collection and analysis, it is good to articulate the expectations of the employees as well as the expectations of the organisation. A culture audit of current reality and future aspirations helps the organisation call out the right expectations from employers and employees.

Elements of holistic employee value proposition- The study done by Kucherov & Zavyalova 2012, characterised attributes of Employee Value Proposition into four categories, viz economic attributes (salary, rewards), functional attributes (the content of work, training, and career growth), psychological attributes (corporate solid culture, positive interpersonal relations in the company, teamwork and organisational attributes (Company history, reputation among the customers, market position and reputation of top management). 

 An interesting article by Harvard Business Review (Jan-Feb 2023, image 1) clearly articulates these attributes.

  1. The employees experienced material offerings in the form of rewards and compensation. The experience is short-term through appraisals, bonus payouts, and incentives. The experience of material offerings is more at an individual.
  2. Connecting and community takes a long time to build within an organisation; however, an employee experiences the same within a concise span of their tenure in the organisation. E.g., The way people build relationships, ways of working like a collaborative ecosystem or operating in silos, and hybrid working. The organisation's perspective towards corporate and social responsibility and their contribution towards the community. Connecting and community are collective experiences. Relationships with people, social causes, and society are critical levers of connection and community.
  3. Over time, employees perceived their jobs as their career and desired a clear career path. Therefore, employees experience career and development in the long run with various personalised interventions, mentoring, coaching and experience on the job. Every employee has an individual journey of growth and development.
  4. The people of the organisation build the culture of the organisation. The people of the firm strongly resonate with the firm's purpose and values. Employees seek to find meaning in their work; their work should contribute to the organisation, have a more profound impact and have a vital purpose. Meaning and purpose is a shared belief of an organisation's reason for being. 

Curating an employee value proposition

Organisations must put a holistic narrative encompassing all the nuances impacting employee experience. At the same time, Leaders must address various pivotal elements for employees. There must be no overemphasis or undermining of any of the nuances.

While working on creating an Employee Value Proposition, three Cs are to be covered. Each C stands for different touch points employee experience through their life cycle within an organisation. Below are a few inevitable aspects of Culture, Career and Community.

The Employee Value Proposition should be a strong narrative encompassing culture, career and community. While the employer promises culture, career and community, the employer also must set out the communication right on their expectations from the employees on contributing towards culture, career and community. 

Why employee value proposition? 

Every individual wants to be part of an organisation that is clear in terms of its value. Employee Value Proposition can strengthen the sense of belongingness of current employees and enhance their commitment towards the organisation. An employee will take much pride in knowing that his/her organisation is well respected in the market among competitors and recruiters and is aspirational for employees.

As per the social exchange theory, there is a social exchange between an employee and the firm where he/she works. When an employer fulfils employees' values and expectations, employees respond to such fulfilment with high organisational commitment.

Employee Value Proposition positively impacts an organisation's say, stay and strive elements. As per empirical investigation, the employee value proposition strengthens the normative commitment of employees, leading to them feeling connected, fitting in, and understanding the organisation's goals and having clarity of their role in contributing to the organisational purpose. Employees with high normative commitment tend to stay with the organisation due to their loyalty. Elegbe (2017) verifies how failure to keep promises and lack of differentiated EVP can significantly affect employees' behaviour, including their stay. Employee Value Proposition also strengthens occupational citizenship behaviour. OCB refers to an employee's voluntary behaviour of going beyond their call of duty and adding discretionary effort to contribute significantly towards organisational outcomes. 

Employee Value Proposition inspires talent to join with a compelling reason, clarifies the current talent on unleashing their potential and aligns employers' and employees' expectations towards business outcomes.

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Topics: Employee Engagement, Leadership Development, Talent Management

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