2.Branding_a New Performance Dicourse for HR

doi:10.1016/j.emj.2004.12.011

European Management Journal Vol. 23, No. 1, pp. 76–88, 2005

� 2004 Elsevier Ltd. All rights reserved.

Printed in Great Britain

0263-2373 $30.00

Branding:A New PerformanceDiscourse for HR?

GRAEME MARTIN, Heriot Watt University

PHILLIP BEAUMONT, University of Glasgow

ROSALIND DOIG, Heriot Watt University

JUDY PATE, University of Glasgow

In this paper we explore the potential for HR pro-fessionals to draw on the branding literature as anew performance discourse, which increasingly isbelieved by organizations such as the UK-basedChartered Institute of Personnel and Development(CIPD) to be a key area of interest for their mem-bers. We believe that such an interest is more thana passing fad because of three important trends: theimportance of corporate and global branding, thedevelopment of the services-based economy in alladvanced economies, and the growing importanceof intangible assets and intellectual capital assources of strategic advantage. In making our case,firstly, we outline some of the emerging evidenceon the branding-HR relationship. Secondly, webring together diverse sources of literature frommarketing, communications, organizational studiesand HRM to produce a model of the links betweenbranding and HR and set out some propositionsthat may serve as a future research agenda andguide to practice, and illustrate these with somecase study research. In doing so, our overall aimis to help HR specialists make a stronger claimfor inclusion in the brand management processand, by extension, into the core of strategic deci-sion-making in many organizations.� 2004 Elsevier Ltd. All rights reserved.

Keywords: Branding, Human resources, HR per-formance, Corporate reputation strategy

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Introduction

Despite some differences over time and among coun-tries, the human resources (HR) occupation hasencountered major problems in legitimising its rolein business (Sisson, 2001), especially when comparedto other managerial functions such as finance andmarketing. Typically, measures such as relative occu-pational pay levels and seats on the board of direc-tors (Millward et al., 2000) show HR to be one ofthe poor relations in organizational decision-makingin the UK, and much the same accusation has beenleveled in the USA (Strauss, 2001). This lack of pres-tige has led advocates of HR (or, in its earlier incar-nation, personnel management) to make differenttypes of claims ‘‘to eat at the top table’’ of companyboards. As a result of these views, there has beenan attempt in recent years to demonstrate the contri-bution of HR to the ‘‘bottom line’’ (Bassie et al., 2002;Huselid, 1995). Given the apparent strength of thisline of research, its ‘‘compelling evidence’’ (Cully etal., 1999) and its appeal to HR specialists, it comesas something of a surprise to some researchers andpractitioners that CEOs and their boards remain tobe convinced of the ‘hard case’ involving the contri-bution of HR to financial performance, at least in theUK (Guest et al., 2003) and the USA (Strauss, 2001). Itshould be noted, however, that such doubts amongsenior board members may have less to do with themessage of effective people management as a key suc-cess factor, which appears to have been accepted bythem judging from their continued positive responseto the appeals of the culture-excellence movement.Instead, it has probably more to do with the messen-gers (i.e. HR professionals, academics and consul-tants), their marginal role in their respective

ropean Management Journal Vol. 23, No. 1, pp. 76–88, February 2005

BRANDING: A NEW PERFORMANCE DISCOURSE FOR HR?

organizations and with their respective clients, andtheir traditional form of training and knowledgebase, which generally lack a ‘hard’ edge (Strauss,2001). As Storey (2001) and others have pointed outin the UK context, HR is often believed by seniormanagers to be too important to be left to HRspecialists.

HR professionals appear to be ‘damned if theydon’t’, and ‘damned if they do’. As some critics pointout, appeals to the finance director or financial orien-tation of Anglo-Saxon boards of directors, based onevidence such as financial indicators and share-holder value, can be criticized for their focus onthe short term and the failure to take into accountthe competing and legitimate claims of other keystakeholders (Legge, 2000). In short, there is a failureto embody the longer-term sources of sustained com-petitive success of organizations, such as knowledgecreation, intellectual capital (Leonard, 1998), productand process development, customer relations andquality (Pfeffer, 1998), and strategic change (Ulrich,1997).

One increasingly important claim for contributing tosustained corporate success is to build bridges withthe marketing function and to draw from its litera-ture and practice on branding (Martin and Beau-mont, 2003). The importance of brands and brandbuilding is easily justified by reference to their valueto companies such as IBM, Microsoft and McDon-alds, with a recent report estimating the Coca Colabrand at just under $70billion (Anon, 2002). In suchcompanies, corporate branding is the cornerstone oftheir business strategy and serves as the single mostimportant filter for assessing organizational changeand key decisions, even in organizations that retainstrong lines of business or product brands. Thusbuilding, or just as often defending, a brand has be-come a major concern of organizations in industriesas diverse as financial services, brewing and infor-mation technology, in the private sector. In additionto the for-profit sector, increasingly public sectorand voluntary sector organizations are coming torealise the importance of branding, with, for exam-ple, universities, primary care services, charitableorganizations and high profile law enforcementagencies such as the London Metropolitan Policeinvesting significant resources in buildingbrands and trust relations with their clients andcustomers.

In all three sectors, it is generally acknowledged bypractitioners, consultants and by marketing aca-demics that having employees ‘aligned’ with thebrand is vital, especially those employees whose ac-tions directly affect customer/client relations andperceptions (see, for example, People in Business,available online at http://www.pib.co.uk). Yet, forreasons which are largely unexplained (Martinand Beaumont, 2003), this is an issue on which

European Management Journal Vol. 23, No. 1, pp. 76–88, February 2005

the HR literature is almost silent, with few directreferences to the branding-HR relationship includedin the core US or European HR texts or in journalarticles.

The Changing Labour Market:The Employer of Choice and

Employer Branding

Despite the historically weak links between the mar-keting and HR functions, there is a growing realisa-tion by companies and by HR professional bodiessuch as the CIPD and the US-based Society ofHuman Resource Management (SHRM) that aligningthe external, corporate image of organizations withinternal employee identity or engagement providesa key opportunity for HR to earn greater voice inbusiness. This is especially so given the importanceto many international companies of global brandingand the role that branding and branding communica-tions plays in strategic decision-making and suchfunctional alignment can be viewed as part of theglobalisation process. Perhaps even more compel-ling, as organizations in most parts of the developedworld have to compete more vigorously in the ‘warfor talent’, especially for increasingly rare and expen-sive knowledge workers (Cairncross, 2003), becom-ing an ‘employer of choice’ is a central HR andbusiness imperative (Pfeffer, 1998). Such a strategyis heavily dependent on an organization developinga strong ‘employer brand in the marketplace to attractpotential recruits and to retain existing staff. Becom-ing an employer of choice, developing an ‘employeevalue proposition’ and establishing an employer brandare founded on a recognition and development of thevaluable inner reservoirs of human capital – theknowledge and experience that flow through organi-zations, and relational capital in the form of cultureand high levels of employee identification. The fu-ture role of HR in contributing towards sustainingthe long term success of organisations lies inuncovering and maximising these resources (Spar-row et al., 2004). We briefly discuss these relatedideas below.

The Employer of Choice Thesis

The employer of choice thesis is intimately connectedto the ‘new psychological contract’ and ‘new career’literature (Rousseau, 1995; Guest, 1998), which devel-oped in the 1990s to explain the emergence of newtransactional relationships in certain industries inthe US and UK. In part as a reaction to these newstyle psychological contracts and in part as a reactionto the recruitment problems in the ‘new economy’,some employers argued that there was a need forthem to become employers of choice to retain their

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http://www.scottishenterprise.com/sedotcom_home/about_se.htm?siblingtoggle=1


pre-existing levels of trust, commitment and identity,especially given their difficulties in maintaining oldstyle job security guarantees under conditions ofuncertain markets (Cappelli, 1995, 1998). Such argu-ments have led employers to think more closelyabout the connections between employee satisfactionand retention, hiring, customer satisfaction, brandingperformance and financial performance.

Thus, according to consultants such as Ahlrichs(2000) and Ashby and Pell (2001), becoming an em-ployer of choice is a deliberate business strategy,which has driven some large US and UK employersto benchmark themselves against others in rankingsof the ‘‘Best Place to Work’’, published by Fortunemagazine in the US and the Times in the UK.Although such ideas and strategies have their rootsin a decade of unprecedented economic growth inthe US, when recruitment and retention becameamong the most important business issues for Amer-ican employers (Stein, 2000), they appear not to havediminished in importance since the economic down-turn in the US following the winter of 2000/2001.And given existing favourable economic conditionsand the demographic problems facing many westerncountries (Drucker, 2001), it is unlikely that such con-cerns will diminish in the foreseeable future.

For some organizations, following an employer ofchoice strategy means little more than more sophisti-cated and sensitive recruitment practices, such asimproving recruitment design, online recruitment,sensitive induction, retention analysis, cafeteria com-pensation and benefits and ‘‘growing your own’’ tal-ent (Tarzian, 2002). For others, however, it means anew, more contextually sensitive, version of theold-style, relational psychological contract (Cappelli,1998) in which long-term commitment from employ-ers, demonstrated through the organization’s goals,values and trust initiatives, is matched by high-com-mitment and low turnover responses from employ-ees. Or else they can mean matching thepsychological contract mix depending on whatemployees seek at different stages in their careers.Such a psychological contract is characterized byhighly competitive remuneration and benefits, oftenincluding elements of contingent pay, interesting,challenging and varied projects, a commitment totraining and development tailored to individualneeds, flexible working arrangements, and a motivat-ing work environment (Martin and Beaumont, 2003).The benchmarking exercises associated with an em-ployer of choice strategy, such as those appearingin Fortune magazine, is related to the extent to whicha firm has an appealing employment proposition oremployer brand.

Employer Branding

Over the past few years, the concept of employmentbranding has entered into the lexicon of HR special-

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ists and particularly consultants, with firms such asVersant in the US, People in Business and Interbrandin the UK offering specialist employer branding ad-vice on how to engage employee loyalty and buildorganizational commitment. Perhaps the most com-plete study to-date of employer branding is the USConference Board’s work (Dell and Ainspan, 2001),which surveyed and undertook follow-up interviewswith executives in 137 major US companies. Thisstudy found that employees were becoming a muchmore important target for corporate image makers,although they did not necessarily use the term‘employment branding’. 40% of respondents reportedusing the methods of corporate branding in their at-tempts to attract, retain and motivate employees.Other evidence has reported a fast growing interestamong European companies, such as Philips andDeutschebank, in the idea of employer branding(Anon, 2001). Such an interest is closely associatedwith the concept of brand risk, which results frominvestors perceiving a threat to their brand. It hasbeen strongly contended that it is poor employee per-formance that can bemost damaging to a brand imageand reputation (McEwan and Buckingham, 2001).

It is due to this requirement for a consistent internalmessage that IHRM in particular has begun to rede-fine its role in an increasingly globalised market set-ting. A prerequisite for corporate success on a globalscale is the ability to create an identity that cutsthrough national boundaries and resonates with localcultures. IHRM occupies a key strategic and politicalposition in reconciling the potential tension betweenthese two facets through its ability to act as a cohe-sive force and conduit for communication withinthe organization. The growing significance of con-cepts such as ‘employer branding’ within corporatestrategic thinking provides the international HRfunction with a means of coordinating its processeson a global scale around this as one of several unify-ing themes. (Sparrow et al., 2004).

Connected with this idea of ‘employer branding’ isthe associated practice of ‘talent management’ whichgrew out of the necessity to secure and retain talentedstaff in the heat of boom-time late 1990’s America andis documented in an extensive report entitled The WarFor Talent (Michaels et al., 1997). Further studies foundthat the differentiating factor between top andmedio-cre performing firms was the priority placed on indi-vidual talent and the fostering of such talent byorganizational leaders (Joyce et al., 2003). The eco-nomic and organizational advantages of successfultalent management are substantial and consideredcritical in the context of international businesses.IHR professionals can act as a significant coordinatingforce in this area also, contributing a wealth of knowl-edge and expertise to global leadership teams.

An employer brand has been defined as the ‘‘com-pany’s image as seen through the eyes of its associ-ates and potential hires’’ and is intimately linked to



the ‘‘employment experience’’ of ‘‘what it is like towork at a company, including tangibles such as sal-ary and intangibles such as company culture and val-ues’’ (Ruch, 2002, p. 3). The internal brandingprocess, the means by which an employment brandis created, consists of creating a compelling employ-ment image or proposition, communicating it toemployees, convincing them of its worth and, inthe rather evangelical words of one set of authors,

...reputations are increas-

ingly formed by the

business press, such as the

rankings of the best places to

work and industry press rat-

ings of organizations.

‘linking every job in the organi-zation to delivery of the brandessence’ (Bergstrom et al.,2002). Like the minimalist ver-sion of employer of choice,much of the content of employ-ment branding programmesemphasizes the traditional HRactivities of attraction, recruit-ment, communications, moti-vation and retention. Thiswork is at its most helpful fromthe point of view of practitio-ners in adapting the ideas ofbranding from marketing andcommunications, and applying
them to the recruitment and selection phase and indeveloping and communicating value propositionsfor employees (Ruch, 2002). The strength of the em-ployer branding concept is that it aims to deal withthe complex task of harmonizing internal belief withthe external brand message. Otherwise, there is littlethat is different from the HR strategy and organiza-tional culture change literature in the form of adviceto HR practitioners from this body of ideas. Reminis-cent of the ‘strategy-as-compelling-narrative’ ap-proach, which has become popular in the strategicmanagement literature (Barry and Elmes, 1997), thekey questions to which employer branding addressesitself are as follows:
v What is the compelling and novel story that wecan tell people about working here?

v How do we tell the story to potential and existingemployees in a way that convinces them of thereality of what we have to offer?

Linking HR and Branding: The Importance

of Corporate Reputation Management

In our recent report for the CIPD (Martin and Beau-mont, 2003), we drew on a number of bodies of liter-ature and practice from human resource, marketingand strategy fields to develop an initial frameworkfor mapping out the links between HR and branding.In this article we focus on explaining the central te-nets of the corporate reputation literature to furtherdevelop our ideas and help us define more clearlythe various concepts often discussed in the literatureon the subject.


The Corporate Reputation Literature

HR academics may have overlooked the branding-HR relationship because at one level at least it canbe labelled as little more than ‘old wine in new bot-tles’. From our reading of much of the marketing lit-erature on branding, it seems to have caught up,rather belatedly, with the ‘culture-excellence’ litera-ture that dominated much of management and orga-nizational thinking and practice during the 1980s and

1990s (e.g. Peters and Water-man, 1982; Colville et al.,1999). This focus on culture asa source and driver of successhas resurfaced periodicallyduring the last two decadesand has influenced many ofthe ‘business guru’ writers,such as Pascale (1991), Kotterand Heskett (1995), and aca-demics such as Martin (1992).

Though many academics andpractitioners have been criticalof the culture-excellence litera-ture, nevertheless, we believe

that the managerially-oriented, and somewhat ‘opti-mistic’ flavour of this work has had an unquestion-able influence on the rhetoric and practice of manyorganizations: in doing so it provides the intellectualinspiration for the current interest among practitio-ners in branding and also the context for the emerg-ing body of research and writing on corporatereputation. This stream of work on corporate reputa-tion is relevant, both theoretically and practically, fordeveloping our interest in the links between brand-ing and HR. In our opinion it helps provide a lan-guage and a degree of conceptual clarity that islacking in the extant branding and HR literature.

Corporate reputation research has its own interdisci-plinary journal, body of scholars, a Corporate Repu-tation Institute and a literature that brings togethermarketing, organizational studies, communicationsand strategic management (Davies et al., 2003). Theacademic interest in corporate reputation grew outof the branding literature in the 1990s and the earlierwork by Albert and Whetten (1985) and others onorganizational identity. What has characterised thiswork is its focus on the reciprocal relationship betweentwo core concepts – external image and internal organiza-tional identity. It is argued that corporate reputation isformed by significant interactions between an organi-sation’s representatives and the outside world.Building on this notion, there are three dimensionsto the formation of a reputation (see Schultz et al.,2002). First, informal interactions among stakehold-ers, for example through sales meetings, employeestory-telling or accounts from satisfied or dissatisfiedcustomers. These incidents strongly influence anorganization’s reputation or external image but arelargely uncontrollable. Second, reputations are

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increasingly formed by the business press, such as therankings of the best places to work and industrypress ratings of organizations. Third, such reputa-tions are formed not only by existing stakeholders,such as current customers and employees, but alsoby potential stakeholders, such as possible recruits,shareholders and other funders, government organi-zations and the community at large. Thus we havedefined a corporate brand reputation in terms ofthe results of the interaction between the objectiveand subjective evaluations of existing and potentialstakeholders, a broader concept of what is tradition-ally meant by corporate brand image.

Modelling the Relationship between HRand Branding: A Corporate Reputation

Approach

Drawing on this discussion of the corporate reputa-tion literature and the core concepts of internal iden-tity and external image (see Figure 1), we can beginto map out a relationship involving the links betweenHR and branding. It is clear from Figure 1 just howimportant employee views are in constructing orga-nizational identities and image. Employees constructan identity of their organizations directly throughtheir experience and also through their impressionsof what external stakeholders think about their orga-nizations, i.e. through the interaction between theirown subjective impressions and the ways in whichoutsiders talk about their organizations. The viewsof past and potential employees are also relevant inbuilding brand images and reputations. Based onour previous work in this area (Martin et al., 1998),we have chosen to define organizational identity interms of two related bodies of literature. The first isthe perceptions employees have of their psychologicalcontracts – what they expect, what is on offer andwhat is actually delivered, including fairness and justtreatment (Pate and Martin, 2002). The second is the

Internal Identity

•Extent employee and employer values are congruent•Extent expectationsare fulfilled (psychological contract)

HR policies

Cross functionalteam

ScottishEnterprisecase

Stories/ imagefrom employees

Standard Lifecase

Internal Identity

•

•

Figure 1 Mapping Internal Indentity and External Image

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work by Davies et al. (2003) on stakeholder percep-tions of the organization’s personality, a construct bor-rowed from the psychology literature to describegeneric organizational personality types. This latterconcept is of interest because perceptions of organi-zational ‘personality’ by external and internal stake-holders can be shared using the same constructs.Thus an organization can be seen as agreeable andtrustworthy, enterprising, chic, competent, mascu-line, ruthless or informal, or some combination ofthese types by customers and employees alike. Tothe extent that organizations wish to incorporate oravoid these personality types in their external andinternal images and identities, the same questionscan be asked of all stakeholders. Using the same con-structs and same questions internally and externallyallows for a genuine test of a key aspect of alignmentthat is not possible when testing for identificationthrough employee engagement or commitmentscales alone (Davies et al., 2003).

Our model suggests how HR practices can workthrough organizational identity and brand image toestablish strong brand reputations. These HR prac-tices include:

v the balance of the psychological contract betweenideological (the extent to which people are beingasked to commit to a higher order cause), rela-tional (old style security and careers) and transac-tional (pay, employability etc) elements;

v the existence of an employer of choice policy; andv a employment proposition, which contains a

novel, compelling and credible message.

In Figure 1, we have also highlighted the importanceof having a brand team to establish a unified andcredible organizational perspective of the brandimage and identity. On the face of it, diversity inthe team and in their views is an important factorin this process, and we propose that such a teamshould include members from different functional

External Image

Developed through•Informal interactions among stakeholders•Business press•External stakeholderPerceptions and judgements

Perceptions

Organisation

Personality

•

••

Organisation

Personality



backgrounds. These backgrounds should includemarketing and HR, as well as communications andoperational staff. However, the mix of these cross-functional teams needs to be carefully worked out,since individual performance within such teams isinfluenced by a range of factors, including their per-sonal identity, their functional backgrounds andteam members demographic differences (Randeland Jaussi, 2003).

Our models suggest three primary propositions,which we ask HR specialist to reflect on in order tosee how they can make a specialist contribution.These propositions are general in nature but maybe developed, refined and added to through furtherresearch. The key propositions are:

1. A strong and positive internal identity and brandwill improve the external image and reputation ofan organisation.

2. Internal identity can be established through theachievement of a positive psychological contractand the existence of sophisticated HR policies.

3. A branding message, which affectively results inexternal and internal identity, will be facilitatedthrough the establishment of a comprehensiveand coherent cross-functional branding team.

Branding and HR: A Hot Topic in Practice?

To this point the discussion has centered on the aca-demic underpinnings of the connection betweenbranding and HR and it would appear to be animportant emerging theme in the literature. In theremainder of this paper we draw on a variety ofavailable data, including on-going case study workto see whether: (1) organisations are generally awareof the employer branding notion; (2) whether someare specifically practising it and; (3) whether thispractice is centred (or not) around any of our threepropositions, thus providing an opportunity to refineand elaborate on thee propositions, and/or developadditional (or new) propositions.

Anecdotal Evidence on the EmergingHR-Branding Relationship

At a number of recent practitioner conferences,including one recently co-organised by two of theauthors of this article, the question was asked ‘towhat extent is the link between HR and brandingimportant’? If anecdotal evidence from the practi-tioner world is any form of reliable pointer, the an-swer is strongly couched in the affirmative. First, aswe have noted above, there has been a growth inconsulting services and conferences on the topic ofHR and branding. For example, there are a numberof specialist consultancy firms solely devoted to em-ployer branding or include employer branding as an


important feature of their portfolio, e.g. Versant, Peo-ple in Business and Interbrand. In addition, many ofthe large consulting firms have been rapidly buildingexpertise in this area, e.g. PriceWaterhouseCoopers.Second, evidence from a recent survey of the workof HR departments in global firms for the CIPD(Sparrow et al., 2004) highlighted employer brandingas one of the biggest issues facing international HRmanagers. Third, headline cases are becomingwidely disseminated. Good examples include SAAB(Bergstrom et al., 2002), and Agilent Technologiesand Abbey National (Martin and Beaumont, 2003).Fourth, job advertisements are beginning to appearfor brand project managers, who can address boththe external and internal issues of branding. Forexample, in the last year or so a number of majormultinational enterprises (MNEs) have begun toappoint employer brand managers in their UKoperations, who span the marketing and HR roles(personal communication with Richard Mosely,Managing Director, People in Business, 4/8/04).These anecdotal examples underscore the growingacceptance of the pivotal role employees play inreifying the brand through a close identification withthe goals of the organisation and a strong personalcommitment to its values. Such recognition bringswith it the possibility of radical alterations in the fu-ture shape of the HR profession. It is this awarenessof factors such as the coalescence between product,employer and employee branding and its resultantinclusion of HRM within previously closed spheresof influence such as strategic planning that hassparked the debate over HR-Branding and its signif-icance for the profession.

Survey Evidence on the Emerging HR-BrandingRelationship

Aside from such anecdotal evidence, data is emerg-ing that indicates a greater awareness among seniorgeneral managers and HR staff of the importanceof internal as well as external branding. We have al-ready cited the US Conference Board Report (2001)and should note a recent PriceWaterhouseCoopersreport on adding value through employees, whichmakes explicit reference to employer branding.Two recent UK-based surveys also support the grow-ing importance of the HR-branding relationship. Thefirst is an unpublished Economist Panel Survey onemployer branding, undertaken in April 2003, prob-ably the first such survey conducted by a Europeanorganization. This survey of more than 900 seniormanagers and HR of companies in the UK, USA,Continental Europe and Asia which form the Econo-mist survey panel is quite revealing, and we set outthe headline findings in Table 1 below.

In addition, there is preliminary evidence from ourown survey of fifty-five CIPD Scottish Partnershipmembers conducted for the HR and Branding confer-

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Table 1 Recent Survey Findings related to HR and Branding

Headline Findings from Economist Survey (April, 2003)

v 62% of HR staff of the 900 plus firms surveyed were aware of the employer branding concept

v Greater awareness outside of UK (US, Continental Europe and Asia) and among larger organizations

v Respondents saw employer branding as an ‘expression of a company’s distinctive employment experience’ rather than

as a recruitment aid or subset of corporate advertising

v HR staff were more likely to have responsibility for employer branding than marketing staff, but key responsibility lay with

senior management to develop strong employer brands

v HR staff were expected to take the lead in driving employer branding in the future, along with marketing and communications

specialists


ence in November 2003. This is a small conveniencesample (hence no detailed outline of relevant charac-teristics of the organisations is provided). This gaveus the opportunity to ask questions concerning theextent to which HR managers were involved in thebranding process and their preparedness for such acontribution. The findings indicated that:

v Branding was seen as important to overall strat-egy by a significant majority of respondents.

v Branding was seen in equal measure either as avehicle for change or as little more than a logo.

v Employees were seen as important by a majorityin supporting brand image.

v A large majority of respondents didn’t believe thatemployees saw brand image/communication asembodying a compelling message.

v Marketing or Specialist departments were mainlyresponsible for brand image in respondentorganizations.

Box 1: Linking Branding and HR at Standard Life In

Standard Life Investments, which is headquartered inautonomous organization within the Standard Life grointernational investment house. Since then it has achievdon, Montreal, Boston, Hong Kong and Dublin and repremploys around 650 staff. Part of the company’s succesbrand image in the investment market, which has beetheir combined efforts with the ‘business’ managers tostrong employer brand. Such has been their contributio1997 and the development of a strong internal brand iaward in 2001 for the company with the most innovati

The key driver for HR’s contribution to the establishmeto recruit and retain talented people, particularly the hicore of the business and acknowledged to be the most iment houses. These people are the equivalent of the stsalaries to match. Recruiting, engaging and retaining thport them has been a critical issue, especially since Standof the main labour market in London. Sitting alongsideof the company to create a more ‘professional’, team-balevels of trust, instead of the previously hierarchical cuance heritage. So, for example, the previous twenty grment for overtime and detailed job descriptions andoutput and high trust regime in which there is very

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v HR staff were typically involved a little or onlysometimes in branding decisions, but believedthat they should have bigger involvement.

v There was evidence of the existence of brand teamthat included HR in about a third of cases.

v Respondent organizations routinely measuredexternal brand image in about a third of cases,but were more likely to measure employee cul-ture/identity/engagement.

v Very few respondents had qualifications relatedto branding or experience in marketing, thoughthey did not see such education or experience asa problem in them making a significant contribu-tion to the internal and external branding process.

To further explore the actual practice of HR brand-ing, we are currently researching a number of cases.The role of these cases is to test the veracity of ourpropositions and to help refine them, or indeed tohighlight new issues thus far not considered. We

vestments

Edinburgh, Scotland, was launched in 1997 as anup of companies with the aim of becoming a majored impressive results and has major offices in Lon-esentative offices in Beijing and Seoul, and currentlys has been based on establishing a strong corporaten fully supported by the HR team in Edinburgh inbuild high levels of employee engagement and an to the creation of the external brand image sincedentity, that they won a prestigious HR Excellenceve HR practices.

nt of such a corporate reputation has been the needghly paid investment fund managers who are at themportant competitive differentiator between invest-ars in English Premier League soccer and can earnese 150 stars, and the 500 or more people that sup-ard Life is committed to its Edinburgh base, outsidethis ‘talent management’ driver has been the desiresed culture, based on ‘adult’ relationships and highlture which they inherited from their mutual assur-aded job structure has been eliminated, as has pay-evaluations. These have been replaced with an

little close monitoring of work but individualized


pay, in which the variable pay element ranges from 15% of based salary for junior administrative staff to200% for the investment fund managers.

The HR team has worked with business colleagues in investment and marketing since 1997 to create astrong ‘internal’ or ‘employer’ brand, which is treated as the key to matching client experiences and expec-tations with the company’s promotional and advertising strategy and its external image. This began withfocus group interviews with customers on determining the external brand values, which were fed backto employees in numerous workshops to help them understand how clients saw the organization, how theywanted to see it and what employees would need to do differently to support the brand. Early on in thisprocess, they realized that achieving this aim would require a heavy investment in promoting ‘engagement’,which they defined in terms of loyalty and psychological commitment to the company. Following someearly investigative work, they commissioned the Gallup organization, a major international survey com-pany, to conduct an investigation into the levels of engagement amongst employees. A survey tool calledQ12 was amended by the HR team to include eight of their own questions, which has subsequently becomeknown as Q20 and has been the principal means of measuring progress in employee engagement since 1998.This measure has the added advantage of allowing the company to externally benchmark its employeesagainst other organizations in financial services and against similar companies worldwide. Since the firstsurvey Standard Life have shown a steady improvement in those employees defined as ‘actively engaged’from 12% in December 1999 to 33% in February 2003, with those defined as ‘actively disengaged’ decliningfrom 14% to 7% over the same period. According to Gallup external benchmarking figures for the financialservices industry, this has moved Standard Life Investments from around the 50% percentile to the topquartile of companies in terms of employee engagement. In addition, the company has noted a reductionin turnover levels from 12% in 1999 to 5% in 2002 and have calculated a saving of £0.5 million.

According to senior HR staff, these measurements have been critical in helping them make their case forcontinued inclusion in the corporate reputation process with business managers who are used to financialmeasurement. However, these measures are only the starting point in the conversation about how to furtherdevelop the team-based culture and individuals, all of whom undergo a ‘strength-finder’ career develop-ment review and a 360 degree appraisal. HR staff stressed the importance of integrating the internal andexternal image of the organization in these interviews and the role of continuous communications in devel-oping a positive corporate reputation. They also stressed the importance of senior management involvementin this process, with Sandy Crombie, the head of Standard Life Investments in 1998 and now CEO of themain board of Standard Life, taking an active role in the external and internal brand-building process.


summarise the early findings from two of these illus-trative cases in the boxed illustrations below.

The Standard Life Investments case highlights theimportance that many organizations are attachingto talent management, especially in recruiting andretaining key employees. It also illustrates the impor-tance the company attaches to developing a strongemployer brand and in becoming ‘employer ofchoice’ in managing their corporate reputation. Akey aspect of establishing corporate reputation isachieving strong internal identification through em-

Box 2: Marketing and HR Working Together at Scott

Scottish Enterprise (SE) is the major national economicager of which reports directly to the Scottish Executive asuch as economic growth, industry development. At£500million per annum. According to its websiteprise.com/sedotcom_home/about_se.htm?siblingtogglehigh-quality services to:

v help new businesses get underway;v support and develop existing businesses;


ployee engagement strategies. Through such HR-based strategies Standard Life Investments havesought to establish positive relational psychologicalcontracts based on high trust, which are key factorsimportant in retaining ‘star staff’. This investmenthas resulted in significant improvement in exter-nally-benchmarked rankings and reduced turnover,two key measurements that HR use to justify theircontributions to the business.

The Scottish Enterprise case highlights a differentproblem (from case 1) of bringing together a number

ish Enterprise

development agency for Scotland, the senior man-nd, through them, the Scottish parliament on issuespresent, SE employs 1500 people with a budget of(available online at http://www.scottishenter-

=1), its key priorities are to provide a range of

83



v help people gain the knowledge and skills they will need for tomorrow’s jobs; andv help Scottish businesses develop a strong presence in the global economy – building on Scotland’s rep-

utation as a great place to live, work and do business.

SE developed from 14 relatively autonomous local enterprise councils (LECs) that had served the regions ofScotland during the 1980s and early 1990s. Whilst having a common charter, each of these LECs had theirown ways of doing business, their own cultures and own external images. As such, there was a great deal ofconfusion in the business community and among the general public about the role of the LECs. For example,it was possible for individual businesses to seek assistance from two LECs and be made quite different of-fers of service and grants. In addition, the majority, though not all, of the LECs interpreted their role to effec-tively exclude service to the large organizations in their respective communities, instead preferring to seethemselves as the champions of the small and medium-sized enterprise (SME) sector. As a direct result,the LECs suffered in terms of corporate reputation among the key 150 companies in Scotland, which wasreflected and reinforced by damaging attacks by certain sectors of the business press that saw no useful rolefor public sector organizations in essentially private business.

In 2000, a new Chief Executive, Robert Crawford, put into place a major exercise of corporate change to ad-dress these problems and to incorporate into SE ‘Careers Scotland’, a previously autonomous branch of theScottish Executive. This new, larger version of SE was intended to provide a single shared service for eco-nomic development for Scotland 1, and for vocational training, career development and international busi-ness development. As part of this change programme, SE sought to reorganize internally to bring the LECsunder more close control but, at the same time, allow them substantial autonomy in carrying out their re-gional economic development and training roles. Such reorganization was also to be accompanied by a deci-sion to make substantial reductions in staff numbers and to introduce efficiency savings in the operatingbudget by £50 million. The senior directors of SE took the initial line that this strategy would need to beaccompanied by a strong corporate brand image and to have the LECs support that corporate image inevery aspect of their operations. To test their thinking, they set up a ‘Values and Brand’ team comprisingtwo marketing staff, two HR staff and five operational staff, each with different backgrounds. Diversityof backgrounds of team members was seen to be essential in configuring the team to reflect the make-upof the SE network. The task they were given was to research the need for a corporate brand image andto develop a brand strategy, for the period 2002–5, if they sensed that external image and internal identitywere a problem. They were also asked to work and liaise with an HR-led group, which was researching intothe need for culture change in the organization.

Early research commissioned by the team in 2000 showed the extent of the problem faced by Scottish Enter-prise in presenting a coherent brand image. Two hundred and seventy two logos and one hundred and sixtywebsites were being used throughout the network of LECs. This lack of corporate coherence was reflected inmore subjective assessments of the multiplicity of sub-cultures and employment practices used throughoutthe network. The people-management dimension of the problem was made especially difficult given thesimultaneous decision by SE to reduce staff numbers from 2000 to 1500 to make efficiency savings of £50million.

Following the research phase, which had confirmed the initial expectation that a unified corporate brandimage and values framework would need to be created for the transformed SE, the team began to realisethat they didn’t have the expertise to develop the strategy on their own. Consequently they sought advicefrom a leading academic in the field and from a leading consulting organization to help them develop thebrand strategy. By January, 2002, the team, in conjunction with the consultants, had developed a coherentbrand strategy and implementation plan, comprising the following elements:

v Brand Concept and Values.v Brand Personality Tone and Style.v Brand Strategy Objectives and Targets 2002–05.v Brand Architecture and Guidelines for the Promotion of Products and Services (including a comprehen-

sive Visual Identities Audit, the development of an online Intranet Brand Guidance tool and the creationof SE’s first comprehensive Visual Style Guide).

v Brand Monitoring and Evaluation Framework.v Living the Values Staff Programme.v Internal Communications Plan.v External Communication Priorities Guidance.


84 European Management Journal Vol. 23, No. 1, pp. 76–88, February 2005

Since January, 2002, there has been a major effort to implement this strategy, with cascaded workshops de-signed to communicate the brand values as part of the ‘Living the Values’ staff programme, and major exer-cises in consultation with external stakeholders and employees throughout the network on the external andinternal brand image and identity. One of the key features of the SE programme has been the systematicimplementation of the brand monitoring and evaluation framework, culminating in an annual brandstrength report. This report tracks progress against objectives though quantitative and qualitative researchon the external and internal aspects of the SE brand. The report is used as starting point for an annual ‘con-versation’ with the SE board and throughout the network more generally on how to develop the externalcorporate image and internal identity. In 2003, the following results were reported, which give some indi-cation of the progress that has been made within SE:

v Internal measures from the annual staff survey, showed that the composite ‘score’ on questions relatingto employee understanding of the SE vision, purpose and objectives had increased substantially by 16%.Currently, 84% express agreement or strong agreement with statements referring to understanding of thevision.

v Business customer satisfaction ratings were increased by 3% to 83%.v The 272 logos previously in use had been reduced to 9 throughout the network.v The 160 websites reduced to 3 channel sites, all supported through the one SE server.v An annual marketing budget saving of £6.42 million (32%) was made in 2002/03 and the marketing

department was on target to save £5.1 million in 2003/04.

From an HR perspective, the annual staff surveys from 2002 and 2003 provided additional data that showedthe extent to which the corporate internal identity had been developed.

Percentage of staff agreeing or strongly agreeing with statements related to the new values frameworkbetween 2002 and 2003

Statement 2002 2003 % Difference

I am aware of the SE values 70 90 20I fully understand what the SE values mean to my work 61 74 13I am fully committed to the SE values 61 71 10I ‘live’ the values when performing my work 42 59 17


of organizations, some of which had little identifica-tion with the corporate body and another organiza-tion which was newly acquired. This lack ofintegration, coupled with the lack of a unifyingbrand image, did little to help the external corporatereputation of Scottish Enterprise. The ‘living thevalues’ initiative has resulted in increased identifica-tion with corporate values and has laid a better foun-dation for a more positive external image andreputation among the Scottish business communityand other key stakeholders. Like the Standard LifeInvestments case, this study highlights the impor-tance of continuous measurement and evaluation tothe whole process.

To The Sceptical Reader:

Future Research Needs

As highlighted earlier in the paper, some readersmay feel that the branding and HR literature hasmore than a little resonance with the cultural excel-lence literature of the 1980s; indeed there may evenbe an element of deja vu. The distinctiveness of theconcept of employer branding rests on connecting


employee internal identification with the organiza-tion and the external brand image. Nonetheless,perhaps there are lessons to be learned from theexperience of the cultural-excellence movement.The cultural management material was essentiallycriticized on two grounds. First, from a criticalorganizational theory perspective, it was seen as asophisticated control mechanism designed essen-tially to manipulate employee attitudes. Second, itassumed that the change process was quick andrelatively easy given that the shape of organisa-tional culture was essentially under the control ofsenior management only and hence the time-framefor cultural change programmes were unrealistic.As a result of this misguided perspective a ‘band-wagoning’ effect seemed to have taken place inwhich the early movers who had seriously em-braced the concept became overwhelmed in numer-ical terms by the later movers who understood andapplied the notion much less well; early moversembraced the concept fully while later moversunderstood and applied the notion less well, withthe result that the principle suffered chiefly throughpoor implementation.

85


To avoid repeating this sort of experience in the fu-ture it is essential to have a systematic programmeof both survey and case study work to establishwhether firstly the notions and propositions underly-ing the employee branding notion offer anything thatis conceptually new and distinctive for example, inboth conceptual and empirical terms it would beessential to demonstrate concepts integral to the em-ployer branding notion, such as organisational per-sonality (based upon perceptions) add explanatorypower over and above the more traditional constructof organisational climate and secondly whether suchprogrammes have positively and significantly im-pacted on employee attitudes and behaviour in a sus-tained manner. For example, in relation to the latterone can envisage four ‘tests’ for such an impact: theextent to which employees identify with organiza-tional goals; the degree to which values are internal-ized; the level of organizational commitment andsense of psychological ownership (Sparrow and Coo-per, 2003). The extent to which these four issues areempirically borne out in reality are major measuresof the success for branding and HR to be judgedarguably against in the future.

Conclusions

In this paper we have argued that HR professionalscould benefit in terms of their professional identitiesand career progress if they aligned themselves moreclosely with functions that are central to the creationand maintenance of corporate reputations. The mostobvious such function is marketing, with its insightsinto brand management. The evidence on the impor-tance of branding to organizations in all sectors of theeconomy suggests that establishing a strong externalimage is a key element of organizational strategy.However, the various strands of the managementand marketing literature has begun to stress theimportance in aligning internal employee identifica-tion with the corporate image, especially given therole played by employees in the service and knowl-edge based sectors of modern economies.

We have drawn on the evidence on employer brand-ing and the concepts derived from the corporate rep-utation literature to develop a conceptual model ofthe links between branding and HR. Three proposi-tions can be derived from this model, which mayserve as the basis for future research and for practicalstrategies for organizational decision-makers. Ourinitial, case-based research in the field, which hasexamined a number of attempts to establish a strongemployer brand and external image, provides somesupport for these propositions. These cases especiallystress the key roles of measurement in establishingthe case for employer brand management and theroles of cross-functional teams, which include HR,

86 Eu

in establishing a corporate reputation strategy insideand outside of the organization.

However, advancement of the HR occupation’s sta-tus by linking it with the brand management or cor-porate reputation process has to demonstratepositive and objectively verifiable links between theparticular expertise they bring to the ‘party’, in termsof their specialist and unique understanding of theemployee identification process, employer brandingand how it can be aligned with external image build-ing. It is within such a context that HR may have toredefine its role in an increasingly globalized market-place. The logic for doing so lies in the prerequisitesfor corporate success among MNEs, the most impor-tant of which is the ability to create a corporate brandimage and internal identity that cuts through na-tional boundaries and resonates with local cultures.HRM occupies a key strategic and political positionin reconciling the potential tension between thesetwo forces through its ability to act as a cohesiveforce and conduit for communication within theorganization. The growing significance of conceptssuch as ‘employer branding’ provides the HR func-tion with a means of coordinating this process on aglobal scale as one of several contexts influencingthe future direction of HR, including talent manage-ment, knowledge management and changing infor-mation and communications technologies (Sparrowet al., 2004).

Note

1. Except the Scottish Highlands and Islands, which was thoughtto be unique enough to require its own economic developmentagency.

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http://www.versantsolutions.com

GRAEME MARTIN,Heriot Watt University,Edinburgh Busi-ness School, Edinburgh,EH14 4AS. E-mail:g.martin@ hw.ac.uk

Graeme Martin is Profes-sor of Human ResourceManagement at Edin-burgh Business Schoolwith interests in the fieldbetween HRM and organ-isational change.

PHILLIP BEAUMONT,University of Glasgow,School of Business andManagement, GlasgowG12 8QQ. E-mail: [email protected]. ac.uk

Phillip Beaumont is Pro-fessor of EmploymentRelations at GlasgowUniversity with researchinterests in the manage-ment of knowledge work-

ers, impact of HR practices in organisationalperformance and the diffusion of HR practices inMNCs.

ROSALIND DOIG,Heriot Watt University,Edinburgh BusinessSchool, Edinburgh, EH144AS. E-mail: [email protected]

Until recently, RosalindDoig was Research Assis-tant at Edinburgh Busi-ness School.

JUDY PATE, Universityof Glasgow, School ofBusiness and Manage-ment, Glasgow G12 8QQ.E-mail: [email protected]

Judy Pate is Lecturer atthe University of Glasgow.Her research interests liein the areas of psychologi-cal contact, organisationalidentity and intra-organi-sational networks.


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