Understanding the Employee Value Equation

The reason why performance management and appraisal programs have been such a hot topic is because they haven’t really done what organisations needed them to: accurately reflect (in a standardised format) an employee’s value to the organisation.

Sure, boxes have been ticked on appraisal forms and goals set for the next 6 to 12 months, but in running through this process–year after year–what HR and organisations have found is that a key piece was missing to the equation.

Capturing performance (did an employee do X or Y) isn’t enough.

Susan Lyon, Director of Human Resources, Global Fabric Care at P&G, discusses the employee value equation at P&G.

Balancing the Employee Value Equation

By drawing on the concept of an Employee Value Proposition (EVP), organisations have become very skilled at measuring what they want and expect from employees. However, the limitation of an EVP is that it is somewhat one-sided by focusing only on what the employer expects from its employees and what it provides in return. To address this imbalance, Susan Lyon, Director of Human Resources, Global Fabric Care at P&G, extended the concept to cater to the wants and expectations of employees through the Employee Value Equation (EVE). Lyon defines the EVE as “an adult business deal between the employee and the company–what employees give to the company and what the company gives to employees in return. It’s really important to have that ‘give and get’ so the EVE is more about a balance than just a ‘proposition’.”

Through employee surveys and conversations at P&G, Lyon and her team were able to dissect data by key employee populations and narrow the themes of the EVE into six main buckets.

One of the most interesting insights about the six buckets came from the conversations with employees across P&G’s offices worldwide. The requirements that were deemed to be most important to Australian eployees were also the same for employees based in China. Culture or local norms did not impact the combination of the buckets – the requirements were essentially universal.

The Evolution of EVE

As with any good concept, the true test lies in its capacity to evolve over time, especially given the rapid pace of change in today’s business environment. “Interestingly, what we found at P&G was that the buckets didn’t changed over time…but what has changed is the expectation and definition within each bucket” noted Lyon.

Lyon’s advice to other HR leaders who are examining their EVE:

Having a clear EVE can help employers to attract, retain, motivate and engage employees, which ultimately drives business performance. And for employees, it helps to shape the level of discretionary effort they bring to the company. The EVE represents a key element for an effective and successful workplace experience.