Thesis Statement
The Determinants of Employee Value reflected in the form of Employee Engagement, Productivity, Satisfaction, and Motivation aid in providing direction for the formulation and development of effective Employee Value Proposition.
We know that satisfied, loyal, and motivated employees reflect upon the culture and environment of a company. These employees are also the basis of competition among companies. Companies who believe that the profitability of the company depends only upon the health of the balance sheet of the company are mistaken. Companies need to have the realization about how an employee can contribute to the worth of a company. Understanding the ways to determine the employee value is impertinent to assemble a productive and efficient workforce to take the business to its potential heights. The determinants of employee value are important to be recognized to make informed decisions about what affects the employees and what type of EVP strategy should be formulated.
The intellectual capital, labor, talent, people, human capital or human resource; whatever the name is given to the employees of a company, the resource that happens to lie within the employees. The way they are organized has increasingly been considered as critical in defining the competitive advantage and strategic success of a company. If an organization would know the impact a good employee has in its organization, it would find ways to hunt or develop these good employees.
A good employee is a vague term; one can attribute it to a satisfied employee, a productive employee, a performing employee, a motivated employee, and an engaged employee. The term here, which better explains a good employee, is the employee value which also bags all the characteristics mentioned above as well. For formulating an effective HR strategy and EVP, determinants of Employee value are needed to be analyzed. Research has found that company culture, motivation, and non-monetary motivation have lasting effects on the employee performance and satisfaction, i.e. in employee value (Gabcanova, 2011).
Employee Value Proposition or more commonly known as EVP is how employees and labor perceive the value that they would gain from being an employee of an organization (Goswami, 2015). The EVP consists of mostly five attributes. These include the Rewards, Organization, People, Opportunity, and Work.
The Rewards include the compensation, benefits, vacations, and allowances, monetary and non-monetary rewards from which employee benefits of entering into an organization. The work includes the work-life balance and interest in the work. The organization includes the product or service quality, market position, and its social responsibility. The opportunity includes the development opportunities, career opportunities, and growth opportunities available to the employee in the organization. The people attribute includes the quality of co-workers, leadership, and managers in relation with the employees.
The values devised by companies and written in block letters in annual reports play an important role in portraying the employee value to the potential employees. Companies are however not needed to devise exemplary written values, but to establish and implement the ones they believe in and can deliver by their effective strategies (Gohari, Ahmadloo, Boroujeni, & Hosseinipour, 2013).
For formulating an effective strategy for Employee Value Proposition, it is important to find the determinants of employee value. For this purpose, research and academic work based on finding the determinants of employee engagement, employee satisfaction, employee productivity, employee performance and employee motivation are considered as representative of providing insight to determinants of employee value. The below-mentioned factors provide insight into the determinants which can be used to formulate an effective EVP strategy and thus consequently creating employee value.
Employee engagement is considered, in general, as a level of involvement and commitment which an employee shows towards an organization and its values. An engaged employee is aware of one’s responsibility and role towards achieving business goals. Engaged employees not only themselves go beyond the call of duty, but also convince and motivate their co-workers to do the same.
Various researchers have analyzed the factors that contribute to the employee engagement. A study showed that the working environment of the employee and the team and co-worker relationship had been found to have the most significant effect on the employee engagement. The work environment consists of the physical and emotional environment which provides safety to the employee. Similarly, the team and coworker relationship includes the achievement as well as collaborative decision making which is the result of the collaboration between teams and coworkers. Collective pride, shared goals, team ethics, leadership, continuous improvement, and communication reflect this factor (Anitha, 2014).
Another research based on finding the factors that lead to employee engagement in IT organization found that Organization leadership and planning, job role, rewards and recognition, training and development and organizational support in the order presented are the most important factors for employee engagement (Gujral & Jain, 2013).
Managers and supervisors play an important role in the development of the work environment. The relationship of employees with the managers is often the reason behind employee’s lack of motivation or high motivation for the work. The role of a manager in increasing employee value is also quite important. The building and maintaining of a well-executed performance management culture is the area in which managers can impact on the business results and employee productivity.
A Gallup research capturing the influence of managers on daily employee routine shows that 70% of the variance in the employee engagement is attributed to the role of managers (Beck & Harter, 2015). According to Harter and Adkins (2015) that consistent managerial communication and performance measures based on clear goals create higher employee productivity.
Employee satisfaction is another important factor which has become increasingly important to the companies. It is used to construct and modify the motivation system of a company. Based on the level of satisfaction, one can provide insights into the attitude of employees towards the company. Herzberg is considered one of the pioneers who proposed the two-factor theory of motivation for resolving this issue of employee satisfaction.
Regarding employee satisfaction, the most used theories include the theories of Herzberg, Hackman and Oldham’s job characteristic, Adam’s theory of fairness, and Vroom’s theory of expectations. Research conducted on identifying factors which influence the employee satisfaction of local government units shows that a relationship with the superior has been ranked as the topmost factor influencing employee satisfaction.
The cooperation in the providing of services is ranked as the second most important factor influencing employee satisfaction. The material condition of the work and the stability related to the professional career development are also important regarding having an impact on the employee satisfaction (Błoński & Jefmański, 2013). Thus, it shows that for an increased level of satisfaction of employees these factors should be incorporated into the EVP strategy.
The relationship between the work and employees has been analyzed by psychologists and behavioral scientists for a very long time. Vocational guidance principles and industrial psychology presented back in the twentieth century reflect upon the research done in this area. Motivation is continually being researched based on the assumption that it influences job performance and individual behavior. It is also based on the assumption that the motivation is not constant. Thus, it can be changed by changing social, personal, and other environmental factors. Another assumption on which research on motivation is based is that it affects behavior as compared to performance. Thus, without influencing behavior, performance cannot be induced. Motivation is needed to create employee value. It is one of the tools through which the employee value can be created.
Research based on finding out what motivates people based on the surveys of employers conducted from 1946 to 1992 shows that good wages were ranked the highest influencing factor regarding motivation out of the ten factors provided to the survey audience. Appreciation for the work done, job security, promotion, and growth, interesting work, personal loyalty to employees, and better working conditions were considered as other important motivators in the presented sequence of ranks (Wiley, 1997).
Studies also analyzed the role that rewards played in the process of employee motivation. The study showed that there were multiple factors which impact on employee motivation to work and perform. The rewards including, promotion, payment, benefits, and recognition showed a statistically significant relationship between variables and employee motivation for work (Khan, Farooq, & Ullah, 2010).
Summing up the discussion, it has been evident so far that as per the various academic research that was conducted for the aim of determining the ways through which employee value in the form of employee satisfaction, employee productivity, employee motivation and employee engagement can be created includes the following factors or determinants of employee value; Rewards, Working Environment/ Culture/ Condition, Relationship with Supervisor/Manager Role, Relationship with co-workers and team, Good Wages, Appreciation for Work Done, Professional career growth/development/stability opportunities and Job security. These determinants have been found to be most influencing in terms of creating and increasing the employee value. Motivational factors are also found to be quite effective in influencing the employee’s performance. These are the determinants of employee value within an organization. Organizations can use these determinants to devise an effective Employee Value Proposition which can help them attract and maintain skilled and qualified talent in their organizations.
References
Anitha, J. (2014). Determinants of employee engagement and their impact on employee performance. International Journal of Productivity and Performance Management, 63(3), 308-323.
Beck, R., & Harter, J. (2015, April 21). Managers Account for 70% of Variance in Employee Engagement. Business Journal, 2(1), 5-15. Retrieved from Gallup: http://news.gallup.com/businessjournal/182792/managers-account-variance-employee-engagement.aspx)
Błoński, K., & Jefmański, B. (2013). Determinants Of Satisfaction Of The Employees Of Local Government Units. Economics & Sociology, 6(2), 158-169.
Gabcanova, I. (2011). The Employees – The Most Important Asset. Human Resources Management & Ergonomics, 5(1), 1-12.
Gohari, P., Ahmadloo, A., Boroujeni, M. B., & Hosseinipour, S. J. (2013). The Relationship between Rewards and Employee Performance. Interdisciplinary Journal of Contemporary Research in Business, 5(3), 543-570.
Goswami, P. (2015). Employee Value Proposition: A Tool for Employment Branding. International Journal of Scientific and Research Publications, 5(12), 263-264.
Gujral, D. H., & Jain, I. (2013). Determinants And Outcomes Of Employee Engagement: A Comparative Study In Information Technology (It) Sector. International Journal of Advanced Research in Management and Social Sciences, 2(5), 207-220.
Harter, J., & Adkins, A. (2015). What Great Managers Do to Engage Employees. Harvard Business Review(April 2015).
Khan, K. U., Farooq, S. U., & Khan, Z. (2010). A Comparative Analysis of the Factors Determining Motivational Level of Employees Working in Commercial Banks in Kohat, Khyber Pukhtunkhwa. International Journal of Business and Management, 5(12), 180-184.
Khan, K., Farooq, S. U., & Ullah, M. I. (2010). The Relationship between Rewards and Employee Motivation in Commercial Banks of Pakistan. Research Journal of International Studies, 1(14), 37-52.
Wiley, C. (1997). What motivates employees according to over 40 years of motivation surveys. International Journal of Manpower, 18(3), 263-280.
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