Go Back Up

Back to Blog

The 4 Secrets to Building a Compelling Employee Value Proposition

March 28, 2017 • By Ken Gibson

To build a performance culture your organization must be able to attract, develop and retain great people.  That talent effort will require you to have a superior employee value proposition—one that doesn’t just mirror what “the market” is doing but that distinguishes your business from the competition in a compelling way.  And your offering must address more than just compensation—it must define a growth partnership and market a future.  So let’s discuss what that means.

The term “value proposition” suggests that you are offering those who come to work for you something of worth that can’t be obtained outside of their relationship with your company.  There is something unique they will gain from the work in which they will engage, the resources to which they will be exposed, the role they will perform and the way they will be compensated for the results they produce.  It implies a strategic effort has been made to identify the kind of talent you are trying to attract and what those people would find compelling about the kind of financial partnership you want to form with them

A compelling value proposition is best accomplished by first building a performance framework.  This construct is made up of three areas of focus: a business framework, a talent framework and a compensation framework.  Those three elements have an interdependent relationship with each other that ultimately drives the composition your value proposition.

Once your performance framework is constructed, you will want to create an employee offering that reinforces and communicates the company results standards you have identified.  It must then make a compelling case for your company in four key areas:

1. A Purposeful Future. Employees want and need to know where they fit in the future of the company and why their contribution matters.  What’s their role?  What are the outcomes for which they have stewardship?  What will it mean to the organization and to them personally if those outcomes are achieved?  What purposes is the company serving and how do they relate to the employee’s personal value system and contribution ambitions?

Top performers in particular are looking for a unique opportunity.  They want to marry their capabilities with the resources of a company and see something accomplished that couldn’t be achieved without their contribution.  They may believe you have a good product and will do "well enough" as a result.  But if you haven't been able to show them where they fit in the future of the company, they won't be compelled by your story.  They want to know how their talents will be used to bring the future company to fruition; why they are an integral part of what happens.

For many years, organizations have focused heavily on communicating their mission and values.  That’s all fine and good…and I would not suggest those things aren’t important.  However, the critical issue these days extends beyond enterprise standards and vision. Today it is about defining and articulating the company’s purpose in such a way that employees find it meaningful, compelling and compatible with their personal sense of purpose.  In Workspan Magazine, Sara Roberts framed the issue this way:

Organizations are waking up to an important reality of human nature. We are hardwired for connection. We have a fundamental need to feel connected to the people we work with and work for, to the work we are doing and to the organization as a whole.  Of course, we can fake that enthusiasm and muscle through a bad day, a difficult co-worker, an uninspiring manager and work that doesn’t feel meaningful or fulfilling.  However, a lack of connection is less than ideal on a personal level in terms of engagement and passion, and it’s not optimal for the organization as measured by any number of critical outputs such as performance, customer satisfaction, speed to market and level of innovation.

The linchpin for connection is a sense of purpose.  Most leaders and managers I talk with get this but don’t really know what to do about it. A 2015 study by the Harvard Business Review and EY Beacon Institute found that more than 80% of the 474 surveyed executives believe that purpose is important to many key measures of a business and 70% believe it is important to integrate purpose into core business functions.  Less than half, however, believe that their organization has a shared sense of purpose or aligns its strategy to a purpose, and fewer than 38% say that employees are clear on purpose or that the business model and operations are well aligned with their purpose.  Given my experience clarifying and activating purpose for organizations, I suspect the percentage of companies that have actually aligned their purpose with their business models or processes is likely much lower. (Ways to Cultivate Purpose in the Workplace, Workspan Magazine, January 2017, pg 21-26)

Simon Sinek wrote a book about this topic entitled: Start with Why.  The premise is that people want to be inspired in what they do—and they don’t discriminate between their personal and professional identity in this regard.  They want their work to enhance not diminish their sense of purpose. 

2. A Strategic Focus.   High performance organizations need strategic leaders.  According to Strategy + Business, these are individuals who “can challenge the prevailing view without provoking outrage or cynicism; they can act on the big and small picture at the same time, and change course if their chosen path turns out to be incorrect; and they lead with inquiry as well as advocacy, and with engagement as well as command, operating all the while from a deeply held humility and respect for others.”  If you experiencing anemic employee performance, chances are you either don’t have enough strategic leaders in your organization or they are not yet in the right roles. 

These high impact people need to spend their time solely on issues that have strategic purpose and impact and be surrounded by individuals who complement them.  They need the ability to transfer assignments and duties that aren’t strategic in nature to others who have the ability to manage and implement those kinds of tasks—and will do so better than the strategic leader would.  Together these groups of people form unique teams where everyone is working within the realm of their unique abilities.  Unique teams are the heart of a performance culture.

Strategic leaders have great confidence in their ability to produce superior results but they need the right kind of people around them.  They want to know that they (individually) and everyone else (also individually) will be working in the sweet spot of their unique abilities.  They are concerned about this because they recognize it will be the combined efforts of unique teams that will fuel success—and therefore multiply everyone’s personal fulfillment.  People of talent know that individual success is impossible without a culture of confidence where the right strategic interactions can be formed, nurtured and magnified.

Free Webinar Pay & the Demise of Performance Management April 26, 2017 Register  Soon as Space is Limited!


3. Superior Resources.  Strategic leaders want to know they will be given the tools they will need to successfully fulfill their roles.  Quality people are ambitious by nature and are constantly seeking personal and professional growth.  They know they will invest their hearts and minds in the success of the enterprise that employs them. Consequently, they want to know that as a result of the resources they'll be exposed to—people, products, capital, etc.—they will get better at what they do.  Their capabilities will increase and that will help both them and the business succeed.  Strategic leaders recognize that as their unique ability is strengthened, they are in a better position to create value for the company.  Everyone wins. 

One of the ways winning cultures expose their strategic leaders to superior resources is by creating empowered teams of leaders.  They seek what the authors of A Team of Leaders call "Stage Five" leadership; where everyone within a strategic unit is expected to step up and provide leadership in their sphere of responsibility.  This approach creates an exponential dimension to leadership development and expansion—as well as personal and professional development.  Team members assume a stewardship approach to their roles within an environment of both cooperation and competition.  Teams and team members push each other to be top performers.  As a result, they want to work cooperatively with other organizational units to achieve sustained success, understanding that their “wins” will come by competing against standards of excellence, not by trying to “beat” other leadership-driven teams. 

4. A Financial Partnership.  Strategic leaders aren't looking for a compensation "package."  They want something that codifies the nature of the financial partnership they will have with you.  In particular, they want to know how they will participate in the value they help create. They view the company as an opportunity to accumulate wealth and feel it's a fair expectation that if they make a significant contribution to business growth, there should be pay mechanism that rewards that result. They expect there to be some kind of long-term value-sharing plan that helps define this kind of financial partnership.

In our work with clients at VisionLink, we find that when businesses are able to make their employees feel like essential partners in the company’s growth plans, they attract and retain higher caliber talent and secure greater commitment and focus from those people.  The root of this approach is to view the company as a “wealth multiplier,” one where all stakeholders—and especially key contributors—participate in the growth they help enable.  The pay strategy, then, becomes the means by which employees can envision how they will share in the wealth multiple the business achieves.

In wealth multiplier businesses, compensation planning is less focused on how much someone should be paid and more on how they should be paid (what forms of compensation they should receive).  This issue is easily addressed if leadership takes the time to articulate a clear pay philosophy and then implement a rewards approach that is consistent with that philosophy.  Among other things, the compensation philosophy defines how value is created in the business and in what form it will be shared with those who help produce it.  The rewards philosophy should also address what the company believes the balance should be between guaranteed and variable compensation and between short and long-term value sharing (incentives). 

When a business adopts this approach to framing the financial partnership it wants to have with its people there is greater clarity and line of sight.  This is because the pay system becomes a means of reinforcing what is important to company leadership, what role each employee (or employee group) has in the company’s priorities, what’s expected of them in that role and how that person will be rewarded for meeting those expectations.  If there is a lack of continuity through all the elements of the partnership relationship, the confidence of employees will waver and wane.  When new recruits sense this incongruity, they end up not accepting your offer.  Existing strategy leaders leave organizations when they experience this kind of operational inconsistency.

As a business leader, you are in control of the value proposition you offer new and existing talent in your business.  If you adopt merely a “market data” approach in your offering, chances are you will fall short in your goal to attract, develop and retain the level of talent you need for a performance culture to thrive.  Conversely, if you will adopt a comprehensive and strategic approach to your employee value proposition, you will find the caliber of the people you are able to recruit and retain will far outweigh that of your competition.


Ready to Get Started?

When it comes to building a compensation strategy, you can trust that VisionLink knows what works and what doesn’t. We are ready to share that knowledge with you.

Ken Gibson

Ken is Senior Vice-President of The VisionLink Advisory Group. He is a frequent speaker and author on rewards strategies and has advised companies for over 30 years regarding executive compensation and benefit issues.