Seeing Employees as Value Creators
Seeing Employees as Value Creators
New White Paper Explains Employee Lifetime Value Measurement Concept
July 24, 2008 Naperville, IL -- A recent analysis of the emerging concept of Employee Lifetime Value (ELTV), points to the fact that people and their performance, not machinery and production, are rapidly becoming the keys to organizational success. A new white paper, Exploring the Building Blocks of Employee Lifetime Value, looks at how employers can actually measure the intangible contributions made by employees that are not normally factored into performance measures.
“New methods and technological tools are making it possible for almost any employer to look at measuring the financial in-flows attributable to an individual employee in order to determine the actual financial contribution of that employee regardless of his/her job,” according to Karen Renk, CAE, executive director of the Incentive Marketing Association, whose Performance Improvement Council co-sponsored the study. “While ELTV models vary by industry, organization and environment, we can now help employers better understand how their people, regardless of their position, help generate value for the company,” Renk stated.
Up until now, the measurement of the lifetime value of employees to their companies has drawn little attention, especially beyond activities such as sales and manufacturing that are more readily quantified. Among other valuable insights, the white paper describes how the value of employees can be measured using new evaluation models. The paper points out that the biggest value of measuring ELTV lies in its ability to help managers re-cast their human resource decisions as our production-based economy is transformed into an information and service economy.
“Our research actually highlights the inherent value of intangibles such as employee referrals where employees advocate the company which significantly benefits the company with customers and potential candidates,” said Rodger Stotz, chairperson of the Research Committee of the Forum for People Performance Management and Measurement that co-sponsored the research and analysis.
“The study suggests that employers need to look more closely at ways in which employees create value and qualitatively improve an organization like adding efficiencies and cost savings to existing processes,” Stotz continued.
“The goal of this research is to give companies more tools they can use to measure the dollar value of things like employee engagement, supporting organizational values and generating goodwill,” says Jerry Klein of Maritz Motivation and a member of the Performance Improvement Council. “ELTV measurement can help demonstrate how intangible employee contributions do, in fact, impact a company’s bottom line."
The new methods can help business managers and HR personnel accumulate information about organizational performance all the way down to an individual employee level and his or her length of service with the company. Such findings can help those same managers find new and better ways to maximize the investment in employees through training and rewards, while appreciating the value employees create.
Several upcoming white papers will highlight additional elements of ELTV based on the full results of the study, a comprehensive 45-page research report entitled Employee Lifetime Value: Measuring the Long-Term Financial Contribution of Employees, which was produced by the Forum for People Performance Management and Measurement, and the Performance Improvement Council of the Incentive Marketing Association. The report is available on the Performance Improvement Council’s Web site at http://www.incentivemarketing.org.
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The Forum for People Performance Management and Measurement is a research center within the Medill Integrated Marketing Communications (IMC) graduate program at Northwestern University. A central objective of the Forum is to develop and disseminate knowledge about communications, motivation and management so that businesses can better design, implement and manage people-based initiatives for inside and outside an organization.
The Performance Improvement Council (PIC) is a strategic industry group within the Incentive Marketing Association, is a professional organization of performance marketing executives collectively focused on helping companies optimize their investment in human capitol through proven and innovative reward and recognition solutions.
The Incentive Marketing Association (IMA) is the leading voice of suppliers in the incentive marketplace. IMA provides education and information services, publications, conferences and seminars, and research to businesses to help them effectively use incentive programs to motivate employees and customers. IMA is a founding member of the Incentive Performance Center and is a leader in the Incentive Federation, the industry’s government relations organization. IMA is comprised of several strategic industry groups including the Global Incentive Council (GIC), the Incentive Gift Card Council (IGCC), the Incentive Manufacturers & Representatives Alliance (IMRA), the Incentive Travel Council, and the Performance Improvement Council, the Recognition Council, IMA- Australia Council, IMA-Canada Council and IMA-Europe Council. More information about the IMA and the incentive marketplace is available at www.incentivemarketing.org.
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