Employee Value Proposition

The Employee Value Proposition is the implicit and explicit agreement between the employer and the employee when a position is accepted.  It is the sum of the whole package of what the employee is signing up for when they join a particular company or organization, including both its tangible and intangible elements.  For example, the Employee Value Proposition is the title and prestige that goes along with a particular position, it is the scope of responsibilities, the types of influence that the person in the position will have and it is also the reputation of the company, how it sits in its industry and in its competitive marketplace.  It is all those things associated with a particular organization when someone says “Well, I work at XYZ Company”  and it has value in an employee’s eyes because it adds to how they feel about where they are working and what it does for their career.

One part of the Employee Value Proposition is the Total Rewards Package.  The Total Rewards Package is more tangible.  It is all the aspects of the rewards, compensation or perks offered with the job.  These would be the actual compensation, salary and bonus, and equity compensation such as stock options or restricted stock units, however these are structured.  It would also be the extra benefits such as the health benefits, medical, dental, life insurance, all of the things that you think of as company benefits that come with a certain job.  Perks can include features like a social time every Friday afternoon or if the company has sports teams that you can join.  It could also be on-site services such as on-site dry cleaning, fitness centers, car washing, car tune-ups, full service cafeterias, coffee service etc.  All of the things that fall under the heading of benefits, perks and compensation are considered part of the Total Rewards.

Employee Engagement is a way of measuring the effectiveness of the Total Reward Strategy and the Employee Value Proposition.  Employee Engagement is defined as the emotional connection that an employee feels for their company.  It also usually includes their job and their work in the team they are part of.  Employee Engagement is the discretionary effort that people give to their job; going the extra mile, coming in early, leaving late.  It is a very personal contribution that they make based upon their sense of loyalty, their sense of commitment to their job, to their team and to their boss.

All of the elements that fall under the larger heading of Employee Value Proposition are critical issues for the employee if an organization wishes to benefit from their best effort.  If employees are proud of their company and are happy to say that they work there, that it is something that they feel good about, then they are more engaged.  When employees are paid fairly, in a competitive fashion relative to their industry, they are more likely to feel good about what they are getting in return for their effort and energy extended and are much more likely to feel engaged.

This is a very basic definition of the terms Employee Value Proposition, Total Rewards and Employee Engagement..