Asking the questions of your employees is the first step to identifying their preferences, but if you ask employees directly “what they want,” they’ll likely tell you “everything is important,” which isn’t actionable.
Conjoin analysis uses trade-offs to determine what people value. AON Hewitt’s Richard Kantor and Tim Glowa use the example of a new television: a new TV will cost either $500 or $1,500 and have either high definition (HD) or not. There are four possible combinations that will help you determine whether price or HD is more important (i.e. low-cost HD TV; low-cost, non-HD TV; expensive HD TV; or an expensive non-HD TV). When applied to rewards, Kantor and Glowa suggest a comparison might be:
If two jobs were identical in all other ways, which would you prefer: No 401(k) match with a 25 percent lower monthly health-care premium, or a 5 percent of your pay 401(k) match with a 25 percent higher monthly health-care premium? It’s evident how employees will need to seriously consider the variables, but after they decide, they will feel much more a part of the subsequent change.
“Better alignment of employee-reward preferences with the company’s human capital strategy directly translates into measurable ROI gains,” says Kantor. “Better cost optimization, reduction or elimination of undervalued programs, improved cost predictability and better retention are some of the ‘hard’ ROI savings. Soft ROI includes an increased perceived value by the employee of the company, the company’s ability to be more competitive for employees in the marketplace and improved employee engagement.
“You can start talking to people differently and shine a spotlight on the parts of a reward program that are most important to them,” continues Kantor. “It builds trust by helping individuals to see their possibility.”