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December 20, 2005

Proving link between employee communications and market value

One of the most challenging aspects of our work as communicators and business leaders is to prove the return-on-investment of employee-focused communications efforts. An update of a ground-breaking study by Watson Wyatt provides hard numbers in this regard that should be useful to all of us.

Watson Wyatt's 2005/2006 Communication ROI Study was conducted over a four-year period. It analyzes the link between ceertain communications practices and estimated increase in market value. Here is the list of communications practices they found to be most important and the corresponding change in market value associated with each:

-- Drive managers’ behavior: 3.8 percent
-- Connect to the business strategy: 3.7 percent
-- Follow a formal communications process: 3.4 percent
-- Facilitate change: 2.8 percent
-- Create employee line of sight: 2.1 percent
-- Focus on continuous improvement: 1.5 percent
-- Use employee feedback: 1.3 percent
-- Integrate total rewards: 0.4 percent
-- Leverage technology: 0.4 percent

These statistics make it easy for a communicator to build the business case for more effective employee communications programs and actually asign a monetary value to the efforts.

Posted by Christopher at 2:11 PM

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Do remember the Watson Wyatt %s listed per item are mathematically derived allocations -- not actual studied differences. What the WW studies really say is that a variety of best HR and communication practices are reported as more present in firms with growing market value (MV).

Taking one, or a few items out of the whole set would not likely produce the desired "rise" in MV.

Effective employee communications that results in employee awareness of and alignment with business strategy and values, and that supports employee engagement is measurable and should be an expected outcome of communications. Sure we all woudl like to link every aspect of what we do to the bottom line -- but for many functions there are too many other factors and variables in between to "prove" the ROI.

In fact I think linking to ROI is sometimes a Red Herring. Better to spend time in gaining buyin to your model of communications value -- linkages to desirable outcomes and how you will measure the results. (A is linked to B, which is a driver of C, which contributes to D.) As long as your management support the assumptions and agrees on the metrics that indicate success -- you can show value without linking directly to ROI.


Posted by: Linda M. at January 3, 2006 10:19 AM


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December 12, 2005

Can an employer fire you for what you do outside of work?

The Scotts Miracle-Gro company (in the interest of fair disclosure, an Edelman client), recently announced a very provocative program to improve the health of its employees while lowering health insurance costs to the company. It's a very bold move but one that I think will serve as a model for many other companies.

Scotts Miracle-Gro has asked employees to take a health assessment. Employees who choose not to take it will pay higher premiums in 2006 and those who take it but don't follow the directions will pay higher premiums on 2007. In addition, Scotts will not permit any employee to smoke (on or off the job) starting in October 2006.

In conjunction with this announcement, the company opened a $5 million fitness and medical facility at its headquarters in Ohio. Employees who participate in the health assessment program and their dependents can visit the medical facility at no cost, and also have generic prescriptions filled at no cost at an adjacent pharmacy. Using the fitness center costs $10 a month, all of which is refunded after a year if employees use the center a certain number of times.

What I like about the Scotts example is that they've put significant resources behind achieving their goal of improving health and ultimately reducing costs -- it will be interesting to see how employees react. A poll at the website of the local newspaper who first reported the news last week showed that nearly 80 percent of people responding thought a company shouldn't regulate employee behavior off the clock. Time will tell if this is a trend that will stick, or one that employees and the public will revolt against.

Posted by Christopher at 9:42 AM

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Except for the smoking ban outside of work (I wonder if that's legal), I don't understand the objections.

Perhaps, if you said that certain costs were refunded to employees who took care of themselves, instead of there being punitive costs for the rest, it wouldn't seem so bad.

How is that different than companies offering health club discounts, or rewards for smoking cessation or weight loss programs? It's a small step, at best.

Posted by: Eric Sohn at December 12, 2005 8:49 PM


The smoking ban seems a little heavy-handed. If they're intent on following that sort of logic, they might as well set a cutoff for an acceptable Body Mass Index for employees. A smoking cessation incentive program may have been a better call for Scotts, or at the very least, a cutoff date later than October 2006. Such a drastic measure in such a short period of time is quite likely to alienate a large portion of their employee base and jeopardize the acceptance of the entire health initiative.

Otherwise, this seems to be a well-structured plan. There are meaningful incentives for employees to participate in the health assessment and fitness program. Not only is this mutually beneficial in financial terms, but it also aligns the values of the organization with the values of its employees. And as Christopher mentioned, they're supporting these values with a significant commitment of resources. I think that this is what separates Scotts' program from health club discounts or weight loss programs. Opening the fitness and medical facility at its headquarters also serves a symbolic purpose, as it is a constant reminder that their company has made employee health a priority.

As far as the local newspaper poll - I'm assuming you're referring to one on the Columbus Dispatch website. The question ("Should your employer be able to dictate what you do or don’t do away from work?") doesn't seem entirely objective, and of course, the results aren't too surprising. I guess this (along with news headlines such as "Company to Workers: Light Up and You're Fired" or "Quit Smoking or Quit Your Job") demonstrates that an innovative health plan isn't going to be newsworthy unless some aspect of it is going to get some people up in arms.

Posted by: Dave Knowlden at December 13, 2005 1:29 PM


I'm still on the fence on this one... part of me thinks it's great that a huge company like Scott's is taking intiative to improve the health of its workers, but part of me still gets the creepy feeling that "big brother" is watching every employees' moves. Especially when most likely the true motivation for the company is to reduce their health care costs to improve their bottom line. Call me a socialist, but I think we'll really only achieve a true balance on this issue with government-backed, accessible and affordable health care for the masses. Until then, I think companies should find ways and make a committment to provide affordable health care for their employees- not necessarily by making them change their lifestyles.

Posted by: Sara at December 16, 2005 4:23 PM


For those who think this is too big-brotherish, I am curious to know whether you feel that way about companies who have policies against using illegal drugs. I mean, imagine Scotts came over to do your lawn, and they killed it. And broke your irrigation system. And you found out that the guy they sent out to do your lawn was an acid-head who occasionally had flashbacks at work and botched the job. I assume you would hold the company responsible, and not just the employee?

CEOs and company lawyers (who from a personal standpoint really might not care what the employees do on their spare time) know that from a financial standpoint, they have to. They don't say they have a zero-tolerance policy for moral reasons, or because they are power mad. It's all about money.

If smokers did not cost companies money, they wouldn't care about you smoking in your own home, either.

Posted by: Wulf at December 20, 2005 8:55 AM


I think all they have to do is refuse to pay or to pay less for someone who smokes or won't lose weight. As for what we choose or don't choose that would be our business exspeically at home. You can not say that would be discrimination because basically they are already doing it.To make someone lose their job after years of smoking and or not taking care of them selves they were good enough this long. Greed takes top proity as usual. Even though you gave everything you have to them they are never satisfied.Exspeically when it comes to the almighty dollar.I thought this was a free country we just let it get one step closer to communist.

Posted by: Tara at January 20, 2006 5:32 PM


I would like to know what ever happen to freedom of choice. It is my choice to smoke, workout or not. I do not think my employer should be able to make that decision for me. If he does not want me to smoke at work that is one thing, but he has no right to tell me I cannot smoke in my own home. This has all come down to money, the big shots are not getting a big enough raise because the company has to put more out for medical insurance. What is going to stop employers from telling you you have to lose weight because the health insurance is to high to cover you, or you eat to much sugar, or red meat or ????? What about the employess who do not have the companies medical insurance???

Posted by: Debbie at March 23, 2006 6:16 PM


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December 8, 2005

Configuring workspace for maximum employee productivity

Something I'm passionate about is the role that physical environment plays on influencing employee engagement and morale. I recently read about something interesting that National City Bank did in Minneapolis that proved my interest in this area: they moved employees from cubicles to glass-walled offices where junior staff had the same furniture as the CEO. New accounts increased 12 percent and turnover dropped by 20 percent.

Chris Conley of the Illinois Institute of Design here in Chicago says companies should revisit their office design once a year to assess how needs have changed. He advocates (and I agree) the need to involve employees into understanding what those needs are and what the drawbacks to the current design are. There are no one-size fits all solutions, he adds.

It's interesting to see National City going against the trend of more public spaces sharing functions: reception, waiting spaces, conference rooms and food service areas. This is a concept that we've actually embraced here at Edelman's Chicago office. We recently redid our main floor, creating one large space in which all these elements flow together. The space can also be reconfigured depending on the need.

One trends that most agree is dead is "hotelling" -- a concept where no one had their own desk. Everything was mobile and you checked into a space and you checked out. Seems that employees work more effectively when they have a "home away from home" in the office -- which shouldn't have been a surprise. I am willing to bet that few employees every supported the concept, rather it was something developed without their input and imposed upon them.

Posted by Christopher at 9:14 AM

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