Mercer Rewards Optimizer™ is a powerful tool. It allows you to identify the most effective rewards package to best meet the needs of your employees at the same or lower cost.
The optimization process consists of two primary inputs:
Collecting Preferences through a Conjoint Survey
The first step is to measure employee preferences through a custom survey that includes a simple series of trade-off questions. Conjoint is a sophisticated research methodology that allows for a comprehensive understanding of the preferences that drive employee behavior, providing both the rank order and magnitude of preferences for the program features tested.
Bringing Together Preferences and Cost through Portfolio Optimization
The second step of total rewards optimization borrows the concept of the efficient frontier from economics, allowing us to gain insight into the impact that program changes will have on the behaviors of the employee population.
The efficient frontier provides us with a series of “optimized” packages, pinpointing the most efficient way to spend dollars and maximize employee preferences.
By leveraging this total rewards optimization concept, organizations can deliver a total rewards package that better satisfies the needs of employees at the same or lower cost to the organization simply by taking out “wasted” dollars and reinvesting them in under delivered rewards areas.