Employee Benefits – The Humaculture® Perspective
Photos above: Just as different plants thrive in different soils, different people also thrive in different organizations. Aloe vera thrives in thin, rocky, dry soil. Similarly, there are also certain organizations that employ people who may primarily have access to benefits through a spouse or parent and don’t require rich benefits. Other organizations may need moderate benefits (like drip irrigation on grapes) designed and structured to nurture them to thrive properly. Still other organizations may require benefits designed to protect and nourish employees, much like lettuce requires mulch and abundant moisture.
Did any person, or any organization, ever become great by striving to be average? Many business leaders instinctively look at what every other organization in their particular industry is doing, then defensively adopt benefits that make their organization “competitive” with their peers. But, does this approach really make an organization distinctive and magnetic to talented people who will lead to success? Is it really a good idea to attract employees who are concerned primarily about benefits?
Understanding the Nature of the Organization – Vision, Mission, and Strategy
The horticulturist understands that different plants, different production goals, and different climates require soils to be built in specific and intentional ways. Each planting bed is designed with climate, soil texture and drainage, fertility, pH, and other factors in mind based on the types of plants and crops desired. So, the successful horticulturist begins with a vision and mission, then develops a strategy based on the vision and mission while considering climate and available resources. While other inputs may be required (irrigation, support, row covers or other protection), the soil is the key. Without well designed soil one can typically expect mediocre results at best. The most successful gardens “feed the soil, not the plant.” A well-chosen plant in well-designed and prepared soil will naturally thrive and produce the desired fruit.
To be successful and highly effective, organizational leaders must take a similar approach. Each organization has different goals, different purposes, and operates in different business, social and legal environments. All of these factors will have tremendous impact on how the organization is able to attract, engage, grow, retain, sustain, and transition employees or other people who will in some way be a part of, and grow, in the organizational “soil.” Many leaders have at least some idea of their organization’s vision and mission, even if only informally. They also know they need the “right” employees to carry out the strategy to accomplish the vision and mission, so much so that the focus becomes “feeding the plant, not the soil.” But failing to understand the importance of building a good organizational “soil” substantially reduces the effectiveness of recruiting, compensation, benefits, well-being initiatives, engagement, safety, and any other perk or program directed at employees.
Pitfalls of the “We Offer Excellent Benefits” Approach
One large health system sought to have only the “very best” benefits, desiring to be viewed as cutting edge to potential employees and to motivate current employees, which is popular among progressive and innovative organizations. The health system combined the Paid Time Off (PTO) benefits for 7 recently integrated entities by adopting a richest benefit approach. This put the new, larger system above the 75th percentile of its peers. However, the workforce plan and job designs did not allow employees to effectively use those benefits, which led to a lot of frustration and inequitable use. It’s a little like over fertilizing plants, they may be “burned” by the excessive fertilizer. The intent of PTO is to recharge and re-energize people so they can better perform in their job. In this case, the employees felt resentment over a benefit they couldn’t readily access and still meet the patient and business needs of their jobs. There must be an appropriate balance between no time off and full time off. It is important that the PTO be designed for optimal performance. The strategic workforce plan and jobs should then be designed for the level of time off provided (e.g., preparing organizational “soil” to allow the employees to use the PTO benefit to help them thrive).
Similar scenarios are repeated in many organizations, especially as organizations look to benefits and other benchmark surveys to guide their benefit choices. So often, organizations implement or modify benefits programs based on benchmark studies, then struggle with high benefits costs and look for the latest “cost containment” measures, programs, or services. For example, a large utility maintained a traditional sick leave program to remain “competitive” with its industry peers. The 100% pay replacement led to over-utilization, excessive costs, scheduling challenges, and increased time to manage employee relations issues related to absence. It simply became much harder to manage and was not attracting and retaining the employees who would best thrive and contribute to continue to build the organizational “soil.” Yes, “everyone else” was doing it but the choice to be average led to high costs and failed to make this organization distinctive and magnetic to the employees who could best produce the intended “fruit” and nourish the “soil”.
How We Design Benefits from a Humaculture™ Perspective
Humaculture™ recognizes that the organization itself is the key to a thriving, engaged, and contributing workforce that leads to success. Benchmarks are good against which to test designs and cost levels to assure they are distinctive and magnetic, but the designs should first support the vision and mission of the organization. While many advisors may suggest, for example, a healthcare organization should provide rich health care benefits, the Humaculture™ approach would view it a little differently. Humaculture™ would focus on the vision to model healthier behaviors, understand the consumer choices their patients are making, and differentiate the type of talent that may choose their organization (e.g., make the benefits less rich for those who aren’t willing to engage in healthier behaviors).
Such a design would support the organization’s effort to attract, engage, grow, retain, sustain, and transition employees who will buy-in to the vision and mission, be fruitful, and contribute to the tilth of the organizational “soil.” Well-designed soil requires fewer inputs of fertilizer, pesticides, water, etc. to successfully produce a crop. Likewise, well-designed organizations, including benefits and compensation that are aligned to support the vision and mission of the organization, will have much lower costs and achieve greater results than those organizations who “burn” the employees with rich or misaligned benefits. For example, one health plan had a copay for emergency room (ER) visit but applied the deductible and coinsurance for office visits. After switching the design to copays for office visits and increasing the ER copay, ER utilization dropped by 20% and non-emergent ER costs dropped by 99%. Overall, the broader behavioral redesign rolled back the cost levels 3 years of double digit increases without increasing plan participant costs.
So, what steps should be taken to design and implement benefits that support the organizational vision and mission, as well as reduce costs and support employees who thrive? How should you begin to develop an effective Humaculture™?
- Either develop or formalize and articulate the Organization’s vision, mission, and strategic priorities.
- Consider and design benefits that support the vision, mission, and strategic priorities.
- Optimize benefit design by applying principles of behavioral economics and choice architecture.
- Develop metrics that will provide actionable insights into the performance of the benefit designs.
- Evaluate benefit effectiveness relative to vision, mission, and strategic priorities and performance.
- Modify designs accordingly and continue to measure and evaluate.
Applying these Humaculture™ principles will move your organization toward providing fertile “soil” for employees, reduce benefit costs (even before “cost management” techniques or services are used), and contribute to a much more productive and profitable organization. Please see our real world applications of this approach and the outcomes achieved with time off, health care, and financial well-being benefits. Take the Humaculture™ Benefits Assessment to conduct a high level analysis of how you are doing.
About Humaculture, Inc.
Humaculture, Inc. transforms organizations—the way organizational leaders understand the organization and the relationships among the people in it, and the way people think about their position and role in the organization. Humaculture™ is a philosophy and systematic approach for creating profitable, aligned, and healthy organizations conceptualized as “soil” in which people can thrive. Humaculture™ helps organizations create the right culture in order to naturally attract, engage, retain, sustain, grow, and transition people who enable the business—and each other—to thrive. More information can be found at: Humaculture.co. Learn more about our team at https://humaculture.co/who-are-we/.
Wes Rogers, Chief Guidance Officer for Humaculture, Inc. Wes has almost 35 years’ experience in consulting and senior management positions with a variety of organizations, facilitating groups of people with diverse perspectives and objectives to coalesce around a singular vision and marshal resources to achieve the vision. This experience provides exceptional insights into how organizations operate and succeed. Contact Wes at Wes.Rogers@humaculture.co.
Steve Cyboran, ASA, MAAA, FCA, CEBS, Chief Behavioral Officer, Consulting Actuary for Humaculture, Inc. Over the past 30 years, Steve has worked extensively with leading corporations, higher education institutions, and health systems across the country to articulate a vision for a healthy and effective workplace culture, develop a total rewards strategy to support that vision and brings deep benefits expertise with a behavioral approach and sound analytics to achieve and measure the desired outcomes. Contact Steve at Steve.Cyboran@humaculture.co.
Leadership & Tomatoes: 3 Business Principles from My Garden
About 1 in 3 people aspire to a leadership role in business.1 About 1 in 3 people grow a kitchen garden.2 The motivation is the same with both demographics. What is it? The tomatoes, of course. Business success. The harvest.
In turn, successful businesses and successful gardens also have something in common: the people who are rooting (pun intended) for it all to be a thriving ecosystem, resulting in a bountiful harvest for everyone.
Over the years, I have observed that many horticulture principles can provide insights and understanding to help those in leadership build more successful organizations.
Leadership Principle #1 — First build the soil.
Without first building healthy soil, gardening is unlikely to be successful. Well-prepared, deep garden soil gives plants the best opportunity to grow a strong root system.
In my garden, I till the soil each spring while the temperatures are still dipping below freezing. I add compost, fall leaves, and grass clippings to add nutrients and texture to the soil. I add alkaline wood ash from winter fires to maintain the soil’s pH balance, since I know my iron-laden well water tends to acidify the soil over time.
Well-prepared soil ensures the plants have the nutrients they need. Good soil also maintains a more consistent temperature, and it allows excess water to drain away faster, retaining only a healthy amount of moisture and retaining it longer.
If we think of businesses and organizations as the soil in which we grow and earn our living, we can easily begin to see parallels between a garden and an organization. An organization that is well prepared has sufficient capitalization, delivers products and services consistent with its vision and mission, is conducive to employee health and well-being, has reserves to weather economic storms, etc.
Most new businesses fail because those who form them are focused primarily on the success they hope to achieve (i.e. harvesting a bumper crop of metaphorical tomatoes), rather than first focusing on the soil preparation that will be critical to that success.
Leadership Principle #2 — Support the plants as they grow.
Once the soil is prepared, the hardest work is done. I have created a nutrient-rich, foundational environment the tomato plants can send deep roots down into and draw resources from to thrive.
In addition to building the soil, I also have further resources to ensure the tomatoes’ success. I supply supports for the plants as they grow taller and bend under the weight of their fruit. I provide irrigation, giving plants the extra water they need in the dry summertime. I walk through the garden almost every day to identify stressors affecting the plants so I can intervene with extra support if necessary.
Employees—even those in the best-prepared organizational soils—will experience negative stressors and challenges from time to time. Distressed tomato plants, just like people experiencing excessive stress, will never be as productive as they would be if they were healthy, and the quality of what they produce will likely be lower as well. Like a horticulturist walking through the garden, a person in a leadership position needs to be able to recognize when something is preventing the employees within their span of care from fully thriving.
Perhaps the employee is not well-matched to the job; they might benefit from transplanting to another area of the organization. Perhaps some benefits, compensation, recognition and performance management programs, advancement pathways, etc. are not properly designed to align with the organizational vision or mission; more beneficial behavioral designs could be put in place instead. Perhaps there are organizational climate challenges; the team might need special support during especially trying times to overcome the difficulties and thrive.
Often, the problem lies not with the employee, but with the organization and whether it optimizes the availability of its resources so employees can effectively leverage them and thrive.
Leadership Principle #3 — Plants don’t exist for soil; soil exists for plants.
The primary focus of a successful garden is never actually the plants. Plants come and go. If they are happy and healthy in well-built soil, they will thrive and produce a great crop.
Yet I never think of my tomato plants as resources to be exploited. Rather, in partnership and anticipation, I provide them with great soil and support them as they grow and produce. Most of my effort is directed into building the soil for the plants and making sure they have everything they need to thrive; the plants themselves do the rest. Both my tomatoes and I work in this gardening venture, looking ahead to the reward – a bountiful harvest.
One of the most important lessons I have learned from gardening is that just as the plants do not exist for the soil, people do not exist for the organization. Employees—humans—are not “resources” or “capital.” In fact, these terms have come to bother me deeply. “Capital” and “resources” are things an organization owns, rents, or acquires through debt to produce a product or deliver a service. Grouping people into a category of owned or rented assets is very discomforting to the thoughtful person.
Further, I have observed that developing policies and practices based on the analogy of owning or renting people (as the capital/resources terminology implies) leads to confusion on many fronts. Ultimately, it often leads to employees who are demoralized and perform poorly.
So, what if we thought of businesses and organizations as soil created for people to grow and thrive in? What if we thought of the organization’s resources as the support people need to produce abundant value (the harvest)? Organizations do not own employees. Employees are not the resource. Organizations are the soil in which people can root themselves to do meaningful, fruitful work – to grow and to thrive.
Just like I build the soil for my tomato plants because they grow better in a prepared garden, people create organizations of all sorts because we grow better and accomplish more together.
So, if we change the way we think about organizations and people, how do we also rethink the way leadership handles traditional “human resources” or “human capital” topics (e.g. pay, talent development, performance management, benefits, time off, total rewards, etc.)? In other words, what is the practical application of these principles?
The Humaculture® approach addresses this. In order to apply the concept of building the soil, we first have to ask some questions: Why does the organization exist? What is its vision? In what sort of climate does the organization operate?
After gaining some clarity about these factors, the Humaculture® approach leads us to consider which people will best achieve the organization’s vision and mission (peach trees are unhelpful if the goal is a tomato crop, just as nurses are unlikely to design the best engine for a cutting-edge vehicle prototype).
The Humaculture® approach also leads us to consider what structure and delivery of the organizational resources will allow the people—and, in return, the organization—to thrive and be abundantly fruitful.
It might seem like more work at the outset, but the tomatoes (the fruit, the value created) are always worth it.
Wes Rogers, Chief Guidance Officer for Humaculture, Inc. Wes has almost 35 years’ experience in consulting and senior management positions with a variety of organizations, facilitating groups of people with diverse perspectives and objectives to coalesce around a singular vision and marshal resources to achieve the vision. This experience provides exceptional insights into how organizations operate and succeed. Contact Wes at Wes.Rogers@humaculture.com.
Steve Cyboran, ASA, MAAA, FCA, CEBS, Chief Behavioral Officer, Consulting Actuary for Humaculture, Inc. Over the past 30 years, Steve has worked extensively with leading corporations, higher education institutions, and health systems across the country to articulate a vision for a healthy and effective workplace culture, develop a total rewards strategy to support that vision and brings deep benefits expertise with a behavioral approach and sound analytics to achieve and measure the desired outcomes. Contact Steve at Steve.Cyboran@humaculture.com.
Rachel Rogers, Editor for Humaculture, Inc. Rachel holds an A.A. in Liberal Studies with an emphasis in English and Communications. As a published writer with training in creative storytelling and corporate storytelling, her experience with writing, editing, and advising writers includes both technical and academic documents, as well as creative works.
About Humaculture, Inc.
Humaculture, Inc. transforms organizations—the way organizational leaders understand the organization and the relationships among the people in it, and the way people think about their position and role in the organization. Humaculture® is a philosophy and systematic approach for creating profitable, aligned, and healthy organizations conceptualized as “soil” in which people can thrive. Humaculture® helps organizations create the right culture in order to naturally attract, retain, sustain, grow, and transition people who enable the business—and each other—to thrive. More information can be found at: Humaculture.com.