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Its popular in the HR world to speak of an organizations employee value proposition (EVP). Like many HR terms, this one evokes a vague and generally positive sense of meaning but rarely has a rigorous definition. Moreover, the value proposition is often confused with the employee brand, another borrowed concept with intuitive appeal but seldom a precise interpretation. Id like to suggest definitions for both terms, and to point out what research says about the benefits of a fully articulated and well-delivered value proposition.
But lets be clear about what a brand isnt. It isnt the visual symbol, musical tones or verbal expressions we commonly link with well-known products and services. Those are brand representations, not the brands themselves. Strong brands like Apple, Intel and BMW didnt start by dreaming up an amusing logo, a catchy tune, or a memorable phrase. They started by understanding their consumers wants and needs and then innovating, engineering, and crafting their way to successful product offerings. Only then did they create visuals, tunes, and phrases. The lesson: begin by understanding the customer, then develop the offering, then deliver the offering successfully, then define the brand promise, and then (but only then) publicize. As all savvy consumer product marketers know, the brand message is the cart. The fundamentally attractive offering is the horse. And if you want to get anywhere, the horse comes first. Some companies have come to realize that constructing a strong value proposition, and supporting it with a compelling brand, is a worthwhile (albeit complex and multifaceted) effort. Many others, however, have yet to experience this epiphany. Towers Watson research suggests that organizations fall into one of four stages on a value proposition evolutionary scale.
Stage 1 Tactical
First-stage organizations have made little progress in defining the coherent set of factors that make up the value proposition to employees and candidates. Nature abhors an EVP vacuum, however, so no organization can truly be without a value proposition, any more than it can be without a strategy or a set of organizational values. All of these exist, even if not formally recognized or clearly explained. Stage 1 companies certainly provide rewards and have cultures, but employees are on their own to understand and interpret these. In our global research, about one-third of organizations fall into this category.
Stage 2 Integrated
Organizations at the next evolutionary step have established a formal EVP and have made strides to integrate their strategies for talent and rewards management. These enterprises have typically established stated objectives for each reward and talent management program. Theyve made key connections among those programs (for example, creating clear linkages among competencies, hiring processes, learning programs, career paths and compensation bands). They represent about one-fourth of our global data set.
In effect, they have established an internal brand, sometimes expressed through clever graphics and messages, and communicated it to employees and candidates.