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The Influence of Employer Branding

on Productivity-Related Outcomes
of an Organization
Alan Robertson* and Ali Khatibi**
The study aims to identify the significant outcomes of employer branding on organizational productivity
and which organizational factors impact upon the relationship between the two. Data gathered from a
survey of 369 Sri Lankan companies indicates that a well-developed employer branding strategy enables
an organization to achieve significantly higher employee productivity-related outcomes than with a
partially-developed or undeveloped strategy. Identifying the factors instrumental to the process affords an
increased awareness of why this occurs, particularly in respect to the role of senior management in
developing and driving the branding strategy, as well as understanding that its impact is largely ineffective
until the brand image is fully developed and embedded in the internally and externally-focused identity
of the organization. Although data was gathered from companies in one developing country it has
practical implications for those managing employer branding programs through providing a greater
understanding of the importance of organizational factors on brand strategy development in effecting the
improved productivity.

Introduction
Ambler and Barrows (1996) seminal definition of the term employer brand described it
as the package of functional, economic and psychological benefits provided by
employment, and identified with the employing company, while the sum of a companys
efforts to communicate to existing and prospective staff that it is a desirable place to work
(Lloyd, 2002) outlines the employer branding process. In both instances, these definitions
focus on the obligations of the employer to the benefit of the employees without spelling
out any commensurate return in terms of positive outcomes for the organization.
Although up to 20% of businesses in some countries actively practice employer
branding strategies (Minchington, 2011), there appears to be little research data to
document the outcomes that ensue in relation to factors that increase productivity. In
exploring the relationship between the employer brand and the productivity-related
outcomes of an organization, the following question is addressed:
What are the significant outcomes of employer branding that influence
employee productivity?
*

PG Student, Faculty of Business Management and Professional Studies, Management and Science University,
Malaysia. E-mail: nalalanka@yahoo.com

**

Dean, Faculty of Business Management and Professional Studies, Management and Science University,
Malaysia. E-mail: alik@msu.edu.my

2013 IUP. All Rights Reserved.


The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

17

Literature Review
An examination of the literature related to employer branding indicates that it has
essentially six major potential outcomes for an organization. Two outcomes are directly
related to the external focus of the employer brand: facilitating the recruitment of (1) a
sufficient number; and (2) quality of employees. The objectives of the internal employer
brand are directed towards: (1) improving levels of employee job satisfaction; (2)
increasing staff retention and reducing turnover; (3) enabling higher levels of
productivity as a result of greater employee commitment; and (4) reinforcing the
consumer brand image of the organization.

Externally-Focused Outcomes
Initially, and even in some current literature, employer branding is seen principally as a
recruiting tool for organizations. Chambers et al. (1998) in The War for Talent explore
the difficulty faced by large US companies in attracting the most suitable executive
employees. Reasons for this include the aging population which is resulting in a reduction
of the proportion of working age people, no increase in the percentage of female workers,
a flattening of workforce productivity improvements, stable immigration levels and
executives not prolonging their careers.
Despite the global financial crisis, these findings remain relevant. In arguing that
employer branding offers the best way to redefine and improve the way a company recruits,
Johnson and Roberts (2006) cited a study that indicated 40% of job seekers ranked
treatment of employees highest in their perceptions of organizations as a place to work (29%
ranked quality of products or services as most important). Research by the Chartered
Institute of Personnel and Development (CIPD) shows that approximately 75% of
companies that use employer branding as a tool for recruitment find it effective (Dyer, 2007).
The recruitment process entails development of the appropriate image for an
organization, striking a balance between instrumental and symbolic traits (Greening and
Turban, 2000; Lievens and Highhouse, 2003; and Hieronimus et al., 2005), segmenting the
job seeker market (Moroko and Uncles, 2009), and presenting an accurate and realistic
perception (Meglino and Ravlin, 1999; Cable et al., 2000; and Backhaus and Tikoo, 2004),
closely aligned with other organizational images (Knox and Freeman, 2006; Wheeler
et al., 2006; and Mark and Toelken, 2009) and the internal employer brand (Davies et al.,
2004).
Some research studies have identified a relationship between an organizations
reputation and its success in attracting quality applicants (Fombrun, 1996; and Cable and
Turban, 2001), with Highhouse et al. (1999) suggesting overall perceptions of reputation
are in fact the most significant factor influencing the choice by recruits. Factors that
contribute to an organizations reputation include financial performance, company size,
media exposure, advertising expenditures and type of industry (Cable and Graham, 2000).
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The concept of employer attractiveness provides another approach to branding an


organization in relation to recruitment through the identification of attributes which
positively influence its perception in the eyes of job applicants (Berthon et al., 2005; and
Arachchige and Robertson, 2011).

Employee Satisfaction and Commitment


It could be argued that employee satisfaction and commitment are not ends in themselves
but rather mediating variables between identification with the employer brand and
outcomes such as retention and job performance. While it is acknowledged that there is
a link with product brand identification and employee commitment to delivering the
brand promise (Boone, 2000; and Aurand et al., 2005), the relationship between employer
brand, employee satisfaction and commitment and job performance is yet to be supported
empirically. In fact, Punjaisri et al. (2009) showed a distinct absence of a statistically
significant relationship between employees brand commitment and brand performance.
For this reason, employee satisfaction and commitment will be considered as definitive
outcomes of employer branding.
Satisfaction and commitment are derivatives of the ability of the organization to meet
its employees expectations as perceived in the psychological contract (Rousseau, 1995).
Establishing the employer brand is highly dependent on the organizations ability to
communicate its values and expectations to employees. This can be done through formal
processes associated with HRM activities (training and development, compensation and
performance management), public relations, and informal sources (co-worker influence,
organizational culture, leadership and management behavior) (Miles and Mangold, 2004).
The employer brand has the ability to develop a brand image and brand personality
(Davies, 2008) which contribute to the organizational identity (Albert and Whetten,
1985). This shapes the employees personally perceived image and in turn, influences their
satisfaction and commitment (Mael and Ashforth, 1992; and Dutton et al., 1994) and is
generally seen as a positive outcome for employer and employee alike.

Retention of Employees
Management theory normally emphasizes the importance of organizations attracting,
developing and keeping talented employees. Retention of employees is seen as a positive
and relevant objective of organizations, and practices, such as employer branding, which
have the potential to enhance retention are considered to be valuable due to their role
in contributing to this outcome.
However, the value of retention as an outcome does need to be qualified in some
respects. Somaya and Williamson (2008) pointed out that companies in general lose
approximately 15% of their human capital every year, yet this should not always be seen
in a negative light. They point out that while some employees are lost to competitors,
others leave to join existing and potential firms with whom linkages can be forged.
The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

19

It is also possible that very low employee turnover may be misleading as an indicator
of employer branding success if staff are loyal to the employer simply to accrue tenurebased rewards and are not sufficiently engaged in the organizations goals (Moroko and
Uncles, 2008).
Drucker (2002) has drawn attention to the growing trend of employing temporary
workers, particularly through temp agencies, often with a view to giving an organization
greater flexibility in the management of its workforce, but also to help minimize the costly
regulatory processes associated with hiring labor. In a situation where a reasonable
proportion of employees are hired, fired and possibly, promoted from outside the
organization, the traditional concept of employer branding is unlikely to hold.
Nonetheless, retention is seen as an important objective in most companies, especially
considering the cost of recruiting, inducting and developing replacement staff.

Productivity
In terms of quantifiable evidence, there is still a large question mark as to whether
employer branding contributes towards helping a firm achieve better performance.
Resolving the issue is a difficult task due to the complexity of linking branding programs
and firm performance. Backhaus and Tikoo (2004) suggested that it would be necessary
to identify the mediators that operate between the employer branding program and the
firms profit margin or profit growth. These may take the form of incremental increases
in individual level productivity, or overall productivity at the aggregate level (Backhaus
and Tikoo, 2004, p. 512). Other strategies entail comparative studies of successful and
unsuccessful employer branding in organizations (Moroko and Uncles, 2008), and
identifying organizations regarded as having higher levels of employee relations and
comparing their performance with other similar organizations in the broader market
(Fulmer et al., 2003; and Read, 2007).
A range of linkages between employee characteristics and organizational outcomes
have been identified in research studies. The alignment of employee identity with
organizational identity has been shown to increase positive work-related attitudes and
behaviors (Olkkonen and Lipponen, 2006). It has been found that higher levels of
employee satisfaction can lead to greater performance levels (Iaffaldano and Muchinsky,
1985) and higher customer satisfaction (Ryan et al., 1996). In addition, employee attitudes
are positively related to customer satisfaction (Morrison, 1995), while Rucci et al. (1998)
have gone one step further by linking employee attitudes and customer satisfaction to
financial growth in their description of the five year process to revamp the ailing Sears
Roebuck Company in the United States.
In terms of assessing performance outcomes, Davies et al. (2010) have focused on the
relationship between employee and customer perceptions of corporate identity, specifically
the variation between the two. Their results showed that where employees have a more
positive view of a companys identity than customers, sales will grow commensurately. On
the other hand, a more negative view of corporate identity by employees than customers
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will result in a decline in sales. The whole subject of the link between employer branding
and productivity is closely aligned with the concept of psychological contractin an
organizational context the shared understanding of employee obligations toward the
employer and the obligations expected from the organization in return (Edwards, 2010).
The closer the alignment of employee behavior with the values of the employer brand, the
stronger the psychological contract between both parties and presumably, the greater the
employee productivity. However, as Vallaster and de Chernatony (2005) pointed out, this
alignment is very much dependent on the success of the employer branding process. While
there is an inherent logic in all of this, little has been done to substantiate the
relationships, although Punjaisri et al. (2009) have found a positive link between internal
branding to employees within organizations and behavioral aspects of employees in their
delivery of the brand promise.

Enhancing Product Brand Equity


In the effort to differentiate employer branding from its marketing counterpart, the
product (or consumer), the importance of the link between the two has received little
recognition in the available literature. Mosley (2007), however, has made an argument for
the interaction of employer branding with customer brand experiences whose strength
depend on an organizations brand ethos and culture. He stated that sustainable brandled culture change will only be effective when the brand ethos is deeply embedded in the
everyday leadership and people management processes of the organization. Employer
brand management provides such a mechanism for translating the brand ethos into the
everyday working experience of employees, and by doing so reinforces the organizations
ability to deliver consistent and distinctive customer brand experience (Mosley, 2007,
p. 132). Knox and Freeman (2006) further added to this idea with their claim that internal
employer branding and external marketing communications, two-way branding, will both
be strengthened if there is a strong congruence between the two.
Henkel et al. (2007) emphasized the importance of the managerial role within
organizations to implement and control employee delivery of the consumer brand. They
found that success in the attainment of this objective is dependent on the brand promise
being lived up to in the attitudes and behaviors of each employee, which enables them
to adapt and respond quickly to customer needs with respect to brand values of their
company. In order to do this, they should know the companys goals, values and
expectations which are, in part, transmitted through the employer brand image (Foster
et al., 2010).
One of the major functions of the consumer brand is to differentiate a product from
that of its competitors (Aaker, 2003). The differentiation of the organization as an
employer can be attributed to the strength of the employer brands personality (Davies,
2008) and the uniqueness and attractiveness of the psychological contract between the
employees and the organization (Edwards, 2010). As the employer brand should reflect the
organizational values and goals, this differentiation as an employer should create a
The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

21

differentiation in the values and goals espoused by its employees with a subsequent
flow-on to differentiation in employee performance which will include consumer brand
supporting behavior.

Conceptual Framework
Figure 1 presents a simplified conceptual model for the employer branding process. The
study focuses on the latter stages of the branding process following the establishment of
the brand itself and examines the relationship between the employer brand (internal and
external) and the organizational outcomes.
Figure 1: Conceptual Employer Branding Model
Organizational
Communication

Employer Value
Proposition

Organizational
Outcomes

Employer Brand

Employer
Branding
Management

Organizational
Factors

Hypotheses
In order to provide answers to the question underpinning this study, the following
hypotheses are addressed:
Hypothesis 1: The strength of the employer brand is positively related to external and internal
organizational productivity outcomes.
Hypothesis 2: The greater the level of employer branding strategy implementation within an
organization, the greater the level of external and internal organizational productivity outcomes.

Methodology
Information was gathered from a study of employer branding in Sri Lankan companies. A
total of 608 employees of 369 companies of varying sizes, industries and locations within
the Western Province were selected, including the capital city of Colombo and the Greater
Colombo area.
Two types of sample populations were used in the study. The first was made up of a
random sample of 66 companies drawn from the list of the 100 most respected business
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entities in Sri Lankan as identified in a survey conducted by The Neilson company for
the Lanka Monthly Digest (LMD, 2010), a well-reputed business magazine.
The second, and larger sample of 303 was made up of companies selected randomly
from selected stratified locations within similarly derived geographical areas within the
Western Province.
The principal source of data was a self-completion questionnaire administered to
one or more employees within the selected companies depending on the policy of the
company. In addition, semi-structured interviews were conducted with one employee from
20 Sri Lankan companies of varying sizes, industrial classifications and geographical
locations.
Respondents were asked to indicate on a five-point Likert scale the rating of their
organization in relation to questions on the external employer brand and the internal
employer brand, the productivity-related outcomes and the mediating factors. The
external employer brand is that perceived by potential job applicants while the internal
brand relates to the perception by current employees of the organization as an employer.
For the purpose of this study, companies were classified according to the level of
employer branding strategy that they had implemented. These were grouped into three
levels:
A well-developed employer branding strategy.
A partially-developed employer branding strategy.
No employer branding strategy.
The data was processed using SPSS. Each scale was tested for reliability with the alpha
obtained in all being above 0.80, which is considered as good (Sekaran and Bougie, 2009).

Results and Discussion


Respondents were asked to rate the performance of their company in achieving each of
the potential outcomes. In relation to the external branding outcomes, recruiting
applicants of the required quality was rated more highly than recruiting sufficient quantity.
Of the internally focused outcomes, enabling employees to provide quality of product and
service was seen as the major outcome, followed by increasing worker satisfaction and
commitment and increasing productivity. The companies surveyed were perceived as least
effective in reducing voluntary employee resignations (Table 1).

Hypothesis 1
Hypothesis 1 states that the strength of the employer brand is positively related to
external and internal organizational productivity outcomes. Testing these variables for
statistical correlation reveals a moderate level of positive correlation between the external
and internal employer brands and their corresponding productivity variables (Table 2),
thereby supporting the contention of Hypothesis 1.
The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

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Table 1: Mean of Outcomes


N

Mean

SD

Recruiting enough new job applicants to fill vacancies

363

3.34

0.707

Recruiting applicants with required skills and abilities

366

3.41

0.741

Creating work environment for satisfaction and commitment

366

3.41

0.758

Minimizing voluntary employee resignations

368

3.11

0.861

Increasing employee productivity

368

3.39

0.689

Enabling employees to provide quality of product and service

368

3.48

0.729

3.36

0.583

Overall mean

Table 2: Correlation Between Employer Brand Strength and Outcome Means


External
Employer
Brand

Internal
Employer
Brand

ExternallyFocused
Productivity

InternallyFocused
Productivity

External
Employer
Brand

Pearson
Correlation

0.456**

0.424**

0.421**

Internal
Employer
Brand

Pearson
Correlation

0.456**

0.427**

0.563**

Externally-

Pearson

0.424**

0.427**

0.664**

Focused

Correlation

0.421**

0.563**

0.664**

Productivity
InternallyFocused

Pearson
Correlation

Productivity
Note: ** Correlation is significant at 0.01 level (2-tailed).

Hypothesis 2
Secondly, the level of employer branding strategy development and level of outcomes can
be considered. Tables 3 and 4 indicate, companies with a well-developed employer
branding strategy have a significantly higher level of related productivity outcomes than
do those with a partially-developed or no strategy.
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Table 3: Comparison of Means and Standard Deviations


of Outcomes at Different Levels of Employer Branding Strategy

Outcomes

Well-Developed
Employer
Branding
Strategy

PartiallyDeveloped
Employer
Branding
Strategy

No Employer
Branding
Strategy

Mean

SD

Mean

SD

Mean

SD

Recruiting enough new job


applicants to fill vacancies

3.78

0.76

3.29

0.70

3.30

0.679

Recruiting applicants with


required skills and abilities

3.89

0.79

3.39

0.71

3.35

0.72

Creating work environment for


satisfaction and commitment

3.96

0.67

3.44

0.69

3.31

0.77

Minimizing voluntary
employee resignations

3.61

0.89

3.10

0.83

3.03

0.84

Increasing employee productivity

3.80

0.71

3.42

0.62

3.30

0.70

Enabling employees to provide


quality of product and service

3.96

0.76

3.56

0.67

3.38

0.72

The ranking of outcome strengths is almost identical across the three strategy levels.
In relation to the externally-focused outcomes, the ability to get the right people was to
a small degree more successful than getting sufficient numbers of employees to fill the
vacancies. Of the internal outcomes, worker satisfaction and commitment was most highly
ranked in companies with a well-developed employer branding strategy, closely followed
by the enabling of employees to provide quality of product and service. The order was
reversed in the other two branding strategy levels. In all groups minimizing resignations
was the least successful outcome.
The one-way ANOVA analysis identifies a significant difference between companies
with a well-developed employer brand strategy and those with a partial or no strategy
(Table 4).
In Tables 4 and 5, there is a significant relationship between a strong employer brand
and a well-developed employer branding strategy bringing about higher levels of
productivity-related outcomes. Hypothesis 2, therefore can be partially accepted, however,
it must be remembered that the means in Table 4 support the hypothesis only in relation
to companies with a well-developed strategy. The following two qualifications to the
hypothesis must be noted.
The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

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Table 4: Means of Productivity Outcomes Related


to Level of Employer Brand Strategy Development
N

Level of Employer Branding Strategy

Subset for alpha = 0.05


1

Tukey HSDa

No strategy

226

3.2762

Partially-developed strategy

107

3.3657

Has a well-developed strategy

35

Sig.

3.8341
0.610

1.000

The first relates to the fact that there is little difference between the outcomes of
companies with a partially developed employer branding strategy and those with no
strategy at all. The strength of the employer brand therefore does not appear to increase
Table 5: Comparisons Between Productivity Outcomes
at Different Levels of Employer Brand Strategy
Dependent Variable:
Productivity Output Mean

Tukey
HSD

(I) Level of
Employer
Branding
Strategy

(J) Level of
Employer
Branding
Strategy

Has a welldeveloped
strategy

Partiallydeveloped
strategy

Std.
Error

Sig.

Partiallydeveloped
strategy

0.46847*

0.10936

0.000

No strategy

0.55797*

0.10202

0.000

0.3179

0.7981

Has a welldeveloped
strategy

0.46847* 0.10936

0.000

0.7258

0.2111

0.06591

0.364

0.0656

0.2446

Has a welldeveloped
strategy

0.55797* 0.10202

0.000

0.7981

0.3179

Partiallydeveloped
strategy

0.08950

0.364

0.2446

0.0656

No strategy
No strategy

95% Confidence
Interval
Lower Upper
Bound Bound
0.2111
0.7258

Mean
Difference
(IJ)

0.08950

0.06591

Note: * The mean difference is significant at the 0.05 level.

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at the same rate as the branding strategy builds momentum. It is not until the employer
branding strategy is established and fully functional that a significant growth in
productivity outcomes takes place.
Secondly, while the outcomes may be at a lower level, the employer brand strength can
still have a strong effect in companies with no employer branding strategy (Table 6).
Therefore, a company with a strong employer brand, whether it is achieved by a deliberate
employer branding strategy or not, can receive a commensurate productivity-related
improvement.
Table 6: Linear Regression Effect of No Employer Branding Strategy on
Relationship Between Employer Brand Strength and Productivity Outcomes
Model

Unstandardized Coefficients
B

Std. Error

(Constant)

1.078

0.236

Employer Branding

0.652

0.070

Beta

0.534

Standardized Coefficients
t

Sig.

4.563

0.000

9.359

0.000

Mean
Note: a. Dependent Variable: Productivity Outcome Mean.
b. Selecting only cases for which companies have no employer branding strategy.

The main findings on the employer branding-related outcomes can be summarized as


follows:
There is a moderate level of correlation between the strength of the employer
brand and organizational productivity outcomes, both externally- and internallyfocused.
Companies with a well-developed employer branding strategy exhibit higher
levels of related organizational productivity outcomes than those with partial or
no strategy.
There is no significant difference between the employer branding-related
productivity outcomes between companies with a partially-developed employer
branding strategy and those with no strategy.

Implications of the Findings


The study has found a positive link between the strength of an employer brand with levels
of recruitment and factors related to employee productivity. The association between the
internal brand and its related outcomes is stronger than that between the external brand
and related outcomes.
The argument for developing employer branding in an organization is further
strengthened by the significant difference in the levels of outcomes between those with
The Influence of Employer Branding on Productivity-Related Outcomes of an Organization

27

a well-developed strategy and those with a partially-developed or undeveloped strategy. In


relation to all outcomes, those organizations in the former category have been shown to
achieve at a considerably higher level than others, particularly in enabling better product
and service quality and creating a work environment for employee satisfaction and
commitment. From a recruitment perspective, these organizations are most significantly
successful in attracting applicants with the required skills and abilities, while minimizing
voluntary employee resignations is the least successful of the outcomes. Nonetheless, the
level of employee retention in companies with a well-developed employer branding
strategy is still much higher than those with a lesser strategy implementation.

Conclusion
The data gathered for this research indicates that a well-developed employer branding
strategy enables an organization to achieve significantly higher employee productivityrelated outcomes than with a partially-developed or undeveloped strategy. Identifying the
factors instrumental to the process affords an increased awareness of why this occurs,
particularly in respect the role of senior management in developing and driving the
branding strategy, as well as understanding that its impact is largely ineffective until the
brand image is fully developed and embedded in the internally and externally-focused
identity of the organization.
To be more precise in determining the nature and extent of the outcome improvement
derived from employer branding, a set of quantitative measures are needed. Although the
available literature provides an assortment of approaches, there is little in the way of a
definitive framework. Further, research in this area would be very valuable.
In addition, the process of embedding employer branding within an organization needs
further exploration. Even though employer branding may be practiced, there appears to
be a critical level of implementation at which it becomes effective. Both cross-sectional
and longitudinal studies are needed as well as case studies from a range of industries,
organizational types and sizes and countries.
Limitations of the Study: All the data obtained by questionnaire and interview was drawn
from one country, Sri Lanka, and therefore the findings may not be applicable in other
national settings.
In relation to the sampling of respondents two points need to be mentioned.
Firstly, as employer branding is still largely in its early stages of development in
Sri Lanka, the number of companies surveyed which had a well-developed employer
branding strategy was considerably smaller than those with a partially-developed strategy
and those with no perceived strategy at all.
In addition, the sample was made up of companies not individuals. It was not possible
to control who the participants from each company were. This depended on the policy
of the company and the identity of the original contact person in each. While company
directors, CEOs and senior managers were among the respondents, the majority were from
middle and lower level management.
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Finally, measurement of outcomes was based on perceptions of respondents rather than


specific quantitative data.

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