16 Aug Performing a Conjoint Analysis for Improved Total Rewards Effectiveness
Total Rewards Offering an array of total rewards options that align with current and prospective employees’ expectations and needs is now more important than ever for attracting and retaining talent. To identify employee preferences among total rewards, some employers have begun performing what’s called a conjoint analysis. This type of employee survey is not to be confused with an engagement survey, as it looks strictly at total rewards.
This survey can include a section for rating satisfaction with existing reward options, along with a section for listing desired reward options that the company does not yet have. In the first section, employees should be asked how important the benefit is, and how satisfied they are with the current offering. If there’s a noteworthy gap between the two, this likely means the company should address that particular benefit.
The process of performing an employee survey is summarized in four steps:
- Determine the type of employee survey (conjoint vs. traditional)
- Finalize questions and develop an online tool
- Download and analyze data
- Develop a final report with recommendations
The Conjoint Analysis
A conjoint analysis assesses the importance employees assign to different features of a total rewards package. Employees are asked to compare two benefits packages and choose the option they most prefer. For example:
Total Rewards Package #1:
- No base pay increase
- 10% increase in health care premiums
- 6% matching contribution
- Vacation buying program
- Catered lunch once per week
Total Rewards Package #2:
- 2% base pay increase
- 20% increase in health care premiums
- 3% matching contribution
- Unlimited PTO
- Paid gym membership
You can then shuffle the package options to give employees a range of choices. Leave the survey open for two to three weeks, and finally, assess your outcome. This will allow you to understand and cultivate a value proposition that speaks to the unique preferences and needs of your workforce. It will also allow you to identify the benefits employees value most and understand the trade-offs they would make. You can extend your results to look at the differences in feature importance. For example, if 21% of survey takers chose packages with a base pay increase but only 3% rated vision care premiums as important, these findings can shed light on what matters most to your workforce.
Scores for each level can be used in a simulation to model the expected satisfaction of potential total rewards packages. You can then also use a dashboard to determine the cost per employee for updating your total rewards options to ensure you can afford the changes. If needed, you can change benefit offerings to align with your budget.
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