The SHRM Essential Guide to Talent Management by Sharlyn Lauby

Author:Sharlyn Lauby
Language: eng
Format: epub
Tags: Talent Management
Publisher: Society for Human Resource Management
Published: 2022-04-18T00:00:00+00:00

Measuring the Employee Value Proposition

There are three areas of focus when it comes to measuring EVP. The first is going to be the popularity of the component. Do employees like it? Organizations should be able to ask employees if they like a particular component of EVP during surveys, one-on-one meetings, stay interviews, and even exit interviews. In addition to receiving anecdotal information from employees, organizations could ask employees to rate a component of EVP on a scale. For example, rate your satisfaction with the company’s PTO policy on a scale of 0 to 6 (0 = no opinion, 1 = very unhappy with it, 6 = totally thrilled with it). This would allow the organization to collect some empirical data.

The second area of measurement is utilization. Do employees use it? The company can see generating a utilization analysis whether employees use the tuition reimbursement program or the employee assistance program. If you have a third party administering a specific benefit such as health insurance, they might be able to offer a breakdown of employee utilization of benefits. For example, the company might have added a gym benefit to the health insurance plan, and you want to know if employees are using it. Utilization reports can offer some insight into whether employees like the benefit because they’re using it.

The third area of measurement is how much the benefit costs. Organizations might track benefit costs as a percentage of payroll or year over year. The cost of a benefit as a standalone number might not tell us a lot, but using it in conjunction with other EVP-related metrics could offer insights. For example, maybe one of the most popular benefits for employees costs very little or a benefit with a significant cost isn’t being utilized. The other aspect to cost that’s important is letting people know the value of the EVP. Personally, I can’t begin to tell you how many times employees were shocked to learn the cost of their benefits package. They had no idea how much money the company was spending. In retrospect, it might be valuable to share that information.

There is one last measurement to consider, and this one is specifically compensation focused. Compa-ratio is the metric that compares a salary to the midpoint of a pay range. Basically, it’s an employee’s current salary divided by the midpoint. Some people will multiply the answer by one hundred to get a percentage.

A compa-ratio under one (or one hundred depending on how you calculate it) means the employee is being paid less than the midpoint, and a compa-ratio greater than one means they’re being paid more than midpoint. Organizations look at compa-ratios to determine if they are compensating employees correctly. The idea is that new, inexperienced, or unsatisfactory performers should have a compa-ratio of less than one while fully competent and outstanding performers should have a compa-ratio of greater than one.

In an article on the website of the HR consultancy Astron Solutions, they provide five zones of compa-ratio, each associated with

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.