Elements of an Effective Organizational Value Proposition

A good employee value proposition consists of several elements which taken together determine how employees and prospective employees perceive an organization as an employer.

Authenticity

One of these is authenticity. You just can’t fake what you are not. To engender trust, the employee and candidates must feel that they can rely on what the organization says it stands for.

The authenticity is epitomized by the brand reputation, the aspirations of the employees and the support they consistently get within organization as a measure of the organization’s commitment to those espoused values. One organization I interacted with had a very strong reputation for covering full tuition for MBAs without preconditions. That was a top draw for a lot of economically disadvantaged brilliant students who in turn gave their loyalty to the company with a high retention rate. Such organizations usually enjoy a lower cost per hire.

Brand Identity

Another element of an organization’s proposition that is motivating is the brand identity of the organization. What is it that makes an organization stand out and differentiate itself from others? For instance, what makes Pepsi different from Coca Cola and why would one prefer one over the other. It is outward facing, but in the end, an organization is there to make money via its goods and/or services. So, how candidates perceive one over the other makes a difference in whom one chooses to work for even in the same industry.

In the end, an employee must feel good about and proud of being associated with their chosen employer. When one can’t bring themselves to share a business card because they are not proud of the organization they are working for or have some associated shame, then there is a disconnect and that person must exit at soon as possible. The proper identity can translate into higher retention, more recruiting efficiency, pride, and unpaid advocacy by the employee on behalf of the organization.

Compensation

Compensation is another element in an organization’s value proposition, and perhaps the most visible and easiest to quantify. Compensation should be looked at as a whole reward system of pay and benefits such as bonus, stock options, health benefits, pension plans and matching contributions as well as paid time off. Fair and performance-based compensation is considered one of the best practices in HRM (“7 Human Resources Best Practices (A mini-guide to HRM)” by Erik van Vulpen of AIHR Academy).

However, compensation is not paramount for every candidate or employee. Other things matter more like work-life balance, flexibility in time and space of work, career development and advancement, fun and meaningful working environment, innovation, a mutually respectful working environment, and the overall culture of an organization. The more innovative an organization’s compensation system is, the more attractive it is for productivity and employee retention (Six Dangerous Myths About Pay by Jeffrey Pfeffer, pp. 117-119).

People do not work primarily for money; we work for meaning in our lives. An extreme example is Whole Food’s CEO John Mackey who chose a pay of $1 because he no longer worked for money: https://www.fastcompany.com/58514/i-no-longer-want-work-money. There are many factors that affect what matters to employees and prospective employees and the organization that figures it out with innovation is in a unique winning position.

Work/Life Balance

Today, burnout and the “great resignation” have shown that work-life balance matters a great deal and in some cases a lot more than remuneration and thus organizations must have flexibility as an element of their employee value proposition. Such flexibility should encompass aspects like recognition, respect, paid time off, remote work, flexible hours, intellectually stimulating work environment, stress-free work environment, training and educational benefits, childcare, retirement benefits, family leave and the ability to migrate in and out of work seamlessly while taking extended leave from work as needed.

Some may simply want upward mobility within the organization irrespective of pay with changing titles and responsibilities, while others welcome the ability to move seamlessly from a manager position to an individual contributor position within the organization. An organization must plan for several generations from older workers to parents and new graduates. Each has different needs. The best organizations do their utmost to meet the employees at their need level ensuring a high employee productivity, job satisfaction, trust, loyalty, and retention.

Stability and Respect

Other elements of an organization’s employee value proposition include stability and respect. In this era where Diversity Equity and Inclusion has entered every employment lexicon, an organization that has a strong employee value proposition must show stability in career path and advancement for all by providing opportunities in training, learning, mentoring, and feedbacks.

An organization that considers termination of employees as the absolute last resort by promoting practices that guarantee secure employment, helps with injecting a welcome level of stability into the lives of its workforce. Respect for the value of work, the value of the human being performing the work and the lives that they live is normally seen in the culture of the organization. An organization that has positive support system for teams and individuals as part of its core values earn the reciprocal respect of its employees along with their devotion and loyalty.