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May 23, 2008
Want to Be an 'Employer of Choice'? Be Careful of What You Wish
By Bob Brady, BLR Founder and CEO

Most HR managers would say that they want their organizations to be an "employer of choice." To do this, they should be offering the best pay, benefits, and working environment in order to attract and motivate the best people.

For a Limited Time receive a FREE Compensation Market Analysis Report! Find out how much you should be paying to attract and retain the best applicants and employees, with customized information for your industry, location, and job. Get Your Report Now!

"Not so fast," says Randolph Harrison, managing director, Capital H Group, Chicago. Speaking at WorldatWork's 2008 Total Rewards Conference in Philadelphia this week, Harrison urged employers to first figure out who it is they want to attract and motivate. (Of course, you want to retain all productive employees. The point he is making is that some are more critical than others.)

Customer Satisfaction

He suggested that employers adapt the "customer satisfaction" tool/model that businesses use to help them figure out and focus on their best customers to identify job classifications that matter most to an organization.

There are three phases to the customer satisfaction model. First, you identify the most desirable customers. Next you define and articulate you brand and value propositions. Finally, you monitor customer satisfaction and make necessary adjustments.

Most Desirable Employees

What makes employees desirable depends on their role in the organization. People who "protect value" are those who can lose money, but there is minimal upside potential if they get things done a little better or faster. This group, though they are important, have less impact than people whose personal activities can create a lot of value, for example, high-end sales people.

Harrison had a chart which showed the importance of "human capital" and "organizational capital" in different "value modes." In the "protection" mode, organizational capital predominated. This means that systems and processes are more important than individual creativity or initiative. By contrast, in the creative mode, human capital dominates.

Market Positioning

Being an employer or choice is most important for the jobs that have the potential to create the most value--those that can "move the needle." Harrison advocates a compensation strategy that uses this "market positioning." Jobs that "protect value" should be targeted at the 50th percentile of a rate range. By contrast, those which have the highest potential should look at the 90th percentile.

"Isn't this what we often end up doing anyhow?" he asked. Managers bargain and finesse the systems to accommodate stars. A system such as Harrison advocates would add some system to the process.

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