3 Important HR KPIs: How Worker-Company Alignment & Identity Formation Can Help Achieve Them

John Anthony Almerino

March 9, 2022

3 Important HR KPIs: How Worker-Company Alignment & Identity Formation Can Help Achieve Them

March 1, 2022

3 Important HR KPIs: How Worker-Company Alignment & Identity Formation Can Help Achieve Them
  1. Recruitment: attracting key talent
  2. Productivity & performance
  3. Retention: reducing turnover rates & increasing satisfaction

The Human Resources (HR) department of companies have a tough job. In a company full of individuals it is challenging to find one size fits most approaches to managing and meeting everyone’s needs. In short HR is responsible for hiring, firing, compensation & benefits, safety, general wellness and work place culture in general. One of the ways that HR is able to perform its role in the organization and measure how the company is doing is through the use of key performance indicators (KPIs).

With the Great Resignation, there have been major obstacles in meeting these expectations for a lot of HR departments. In particular, this phenomenon has made it difficult for HR to meet its KPIs for recruitment and retention. This is definitely not good as meeting these KPIs is crucial to the company’s survival.

At Upstock, we believe in the power of equity rewards to foster and develop both worker-company alignment and identity formation. In this blog post, we’ll get into just how these two important elements can help meet important HR KPIs.

1. Recruitment: attracting key talent

People want to associate with things they identify with and are passionate about. Addressing this human need will significantly improve HR’s success in attracting the necessary talent for the company. For instance, people who are environmentally conscious tend to gravitate towards companies that advocate and support their beliefs. This is something that recruitment efforts could target.

However, this is not that easy for companies that do not have an existing brand or reputation. Hence, startups and newer companies have to find alternative ways to do it and we think this could be done through stock compensation. By offering workers and employees the opportunity to become part-owners of the company, you facilitate identity alignment with the company through collective ownership. 

How does this specifically help with recruitment KPIs? Equity plans are very attractive, especially in industries where they are not usually offered. You are, therefore, making a compensation offer that’s not ordinarily made and which is very enticing to a majority of people. Moreover, offering equity may help lower the upfront cost in cash of talent acquisition which is especially helpful for newer and smaller companies with low funds.

2. Productivity & performance

Workers and employees who are satisfied and engaged perform better than those who are not. Compensation has always been a key factor that has been taken into account in predicting the level of performance of an employee. 

A lot of studies show that employees who are compensated well tend to have a better performance compared to their less-compensated peers. This shows tha when people feel like they are being properly rewarded and appreciated for doing their jobs well they have more motivation to do so. As such, pay-for-performance compensation plans and other similar incentives have been a go-to HR strategy for improving employee productivity and performance KPIs.

In a previous blog post, we talked about how equity rewards can boost HR compensation strategies by facilitating worker-company alignment. We believe that equity plans are more effective in helping achieve these KPIs since it manages to directly tie the success of the company with an employee’s performance. Instead of an arbitrary performance figure, employees are motivated to go above and beyond what is required by their role to ensure that the company succeeds. When it comes to equity, when the company succeeds, the employees also win, as the value of their equity shares also increases.

3. Retention: reducing turnover rates & increasing satisfaction

Another major KPI for HR is ensuring that turnover rates are low and that key employees stay with the company for as long as possible. Failing to achieve this KPI has a ripple effect that could also adversely affect the achievement of other related KPIs. 

For example, having a high resignation rate is demoralizing to the remaining workforce which could negatively affect their productivity and performance. No one likes it when a well liked friend and team members leaves. On the other hand, high turnover rates also generally increase the costs of recruitment as you will have to devote more time and resources to fill and train new workers or existing team members to fill the vacancy created.

Equity compensation is one of the few long term benefits that a company can offer its workers. Payroll, health, wellness, and flex work all meet a worker’s immediate needs. Only equity gives a worker long term plans in line with the company’s future. Workers who identify with the company and are aligned with its goals are more likely to stay and less likely to leave. In this way, equity rewards help keep employees satisfied and motivated while incentivizing them to remain loyal to the company.

Upstock can help achieve HR KPIs

Between COVID and the Great Resignation, it has been a major challenge for HR practitioners around the world to meet their KPIs. But with the right tools in place, we believe that these KPIs become easier to achieve. At Upstock, we believe that one of those tools is a good equity compensation strategy. Hence, we have made it a goal here in Upstock to help HR achieve its KPIs through effective and high-quality equity plans. 

We’ve been looking to talk to companies and organizations as to how Upstock can help address some of their KPI-related issues. If you are an HR professional thinking about how this can be done by recalibrating your compensation strategy, we’re here to walk you through it. Book a demo or get in touch with us through this link.

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Offering equity makes it easy to attract and hire top talent.

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