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More U.S. companies put in place internal communication programs in 2007, especially those that aim to increase employee participation in benefits programs, according to research by consulting firm Watson Wyatt.
2007/2008 Communication ROI Study, with responses from 264 large companies representing more than 6.2 million employees around the world, found that:
“As more companies take steps to rein in health care costs and update their benefit offerings, the need for better communication is becoming clear,” said Kathryn Yates, global director of communication consulting for Watson Wyatt. “Companies expect employees to assume more responsibility for their financial and personal health, so it’s important to provide them with the resources to make informed decisions.”
Steps Forward—and Some Back
Watson Wyatt found that employers are increasing their communication efforts in some areas, but lessening their focus in others. For example, the number of employers offering personalized total reward statements increased by 13 percentage points since 2003, but the share of companies offering educational material to ease the financial transition of workers nearing retirement has decreased by 11 percentage points.
Additionally, the number of employers that regularly measure employee behavior change to verify that communication initiatives are working has increased by 24 percentage points. Today, more than half (57 percent) of surveyed companies are using corporate communication scorecards to measure effectiveness in areas such as employee retention and manager performance.
-------------------------------------------------------------More than half use corporate communication scorecards
to measure effectiveness in areas such asemployee retention and manager performance.-------------------------------------------------------------
However, the portion that allows employee input on decisions that affect the company has decreased by 5 percentage points.
Top Five Positive Trends in Communication
Organizations Doing This in 2003
Organizations Doing This in 2007
Take action to increase employee enrollment in benefits programs.
Regularly measure employee behavioral change
Provide employees with online access to training/development tools.
Collect information on the perceived value of employee benefit programs.
Involve internal communications in organizational change.
Source: Watson Wyatt
Top Five Negative Trends in Communication
Doing This in 2003
Doing This in 2007
Offer personalized education materials on income needs in retirement.
Implement a new communication initiative to support change.
Give employees the chance to provide input on how work gets done.
Provide a systematic orientation for new hires.
Explain the reason behind major decisions.
Source: Watson Wyatt
While companies don’t always explain the reasons behind management decisions, they do tie employee performance to the prosperity of the organization as a whole. The number of companies that communicate the connection between pay and business strategy has risen from 70 percent in 2003 to 80 percent in 2007, Watson Wyatt found.
“Good communication connects employee performance to the bottom line,” said Yates. “Companies that expect workers to perform at peak levels are explaining why they make certain management decisions. They gather employee input and feedback to build workers’ understanding—an exercise that has been shown to increase their productivity and improve financial results.”
Benefit Communications ROI
Effective employee communications is a leading indicator of financial performance, the study found. For example, in terms of employers' return on investment (ROI):
Among other study findings of note:
Stephen Miller is manager of SHRM Online’s
Compensation & Benefits Focus Area.
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