Impact of Employer Branding on Employee Performance

Acknowledgement

Apart from the efforts put by me, the success of any project depends largely on the encouragement and guidelines of many others. I take this opportunity to express my gratitude to the people who have been instrumental in the successful completion of my Thesis.

I am heartily thankful to my Thesis Guide- Prof. Robin Thomas, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of this subject.

The guidance and support received from all the members who contributed and who are contributing to this research, was vital for the success of this Thesis. I am grateful for their constant support and help.

OBJECTIVE:

• To study the impact of Employer Branding on Employee Performance in the organizations in today’s scenario.
• Also, to study the impact of effective Employer Branding on perceptual and objective areas of Performance Management.

ABSTRACT

Employer branding is the development and communication of an organization’s culture as an employer in the marketplace. It conveys the organization’s “value proposition” – the totality of the organization’s culture, systems, attitudes, and employee relationship along with encouraging its people to embrace and share goals for success, productivity, and satisfaction both on personal and professional levels.

Employer branding represents a firm’s efforts to promote, both within and outside the firm, a clear view of what makes it different and desirable as an employer. In recent years employer branding has gained popularity among practicing managers. The importance of managing employee perceptions has given rise to the contemporary notion of Employer Brand. This is essentially the brand the employer projects to existing and potential employees via the chain of communication touch points ranging from recruitment intermediaries through to line managers.

However one of the major issues in Employer Branding is how to measure an employer brand, what value does the employer brand have? Ultimately, a strong employer brand should contribute to the performance and success of the organization.

The workforce is the real driver of profits in today’s business world. Employer Branding helps in recruitment and retention of the best of talents. It has it’s impact in many areas of Human Resource Management like Employee Loyalty, Employee commitment, Employee retention and one of these areas which should get highly affected by this concept is Employee Performance. The strength of an organization’s brand has a significant impact on the performance of its employees. A strong Employer Brand has a significant influence in the employee’s performance and that a strong product brand can essentially support the development of the employment brand. These days companies make a lot of investments in this concept of Employer Branding, thus studying the extent of its impact on Employee’s Performance in these organizations has become a vital need in today’s scenario.

THE SCOPE/COMMERCIAL VIABILITY OF THE STUDY

* To study the concept of Employer Branding and it’s evolution over a period of time.

* To study what it takes for an organization to build a magnetic Employer Brand.

* To study the causes that lead organizations to focus more on this concept of Employer Branding.

* To study the extent to which this process of Employer Branding helps the organizations to improve Employee Performance and what impact it has on other areas like Employee Loyalty and Employee Retention.

* To study Employee’s Brand Based Equity and its impact on Employee Performance.

* To study the benefits gained by the organizations as well as the obstacles faced by the organizations in the development and implementation of this process of Employer Branding.

* To study the ways by which the impact of Employer Branding Process can be measured with Employee Performance being a major area of focus.

METHODOLOGY

The conceptual study of the thesis will be done through literature reviews. Descriptive research design will be used to get an idea of the implementation of this concept. Also, Causal research design will be used to understand the relationship between the variables under study to reach reliable and valid conclusions. The method of Probability sampling will be used to carry out the required surveys. Hereby, the method of Stratified Random Sampling will be used. The use of these methods and Research Designs would make the study more concrete and reliable.

SOURCES OF INFORMATION

· Secondary data collection will be done through websites, literature study, journals, magazines and articles.

· Primary data collection will be done through interviews of professionals and subject experts. Also, the questionnaires will be used to carry out the surveys of the Target Audience.

* The target audience would be the H.R [Senior Level] and Subject Experts. Study would be conducted across sectors and around Five Industries would be taken under study. Five Firms would be taken for survey purpose under each Industry. So in all, 25 H.R [Senior Level] across sectors and Five Subject Experts would be surveyed. Sample size would be 30.

Note:

The thesis has to be divided in three parts. The first part would talk about the following:

* The meaning and background of Employer Branding, the dimensions of Employer Branding, etc.

* The meaning and background of Employee Performance and how it is defined.

* How are Employer Branding and Employee Performance related.

The second part would be of Industry research which would include study of various industries taking into consideration various units under various industries. It would include data analysis and data interpretation.

The third part would include the derivations of the study. It would include key findings and learning and suggestions.

Chapter 1. Introduction to Branding

1.1 Defining a Brand

Branding has been around for centuries as a means to distinguish the goods of one producer from those of another. In fact, the word brand is derived from the Old Norse “word brandr, which means “to burn,” as brands are the means by which owners of livestock mark their animals to identify them. According to the American Marketing Association (AMA) a brand is a “name, term, sign, symbol, or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Technically speaking, then, whenever a marketer creates a new name, logo, or symbol for a new product, he or she has created a brand.

Thus, the key to creating a brand, according to the AMA definition, is to be able to choose a name, logo, symbol, package design, or other attribute that identifies a prod­uct and distinguishes it from others. These different components of a brand that iden­tify and differentiate it can be called brand elements.

A brand is therefore a product, but one that adds other dimensions that differentiate it in some way from other products designed to satisfy the same need. These differences may be rational and tangible—related to product performance of the brand—or more symbolic, emotional, and intangible—related to what the brand represents. One mar­keting Observer put it this way.

More specifically, what distinguishes a brand from its unbranded commodity counterpart and gives it equity is the sum total of consumers’ perceptions and feelings about the product’s attributes and how they perform, about the brand name and what it stands for, and about the company associated with the brand?

1.2 Why Brand?

More and more firms and other organizations have come to the realization that one of their most valuable assets is the brand names associated with their products or services. In an increasingly complex world, individuals and businesses are faced with more and more choices but seemingly have less and less time to make those choices. The ability of a strong brand to simplify consumer decision making, reduce risk, and set expectations is thus invaluable. Creating strong brands that deliver on that promise, and maintaining and enhancing the strength of those brands over time, is thus a management imperative.

Emile Durkheim in Elementary Forms of The Religious Life explains the religion of the Australian Aborigines. The concept of a church as Durkheim defines it is ‘a shared feeling of a special kind.’ It is group dynamics, the act of assembling for a common purpose, that creates the feeling of being in the presence of a spirit greater than the individual, a sacred feeling of being in the presence of a spirit greater than the individual, a sacred feeling that strikes a chord with our deepest longings. Brands, too, strike chords.

However, striking the right chord is both difficult and often costly. There are no guarantees of the result, although there is a clear difference in the growth of financial value if we compare companies that have done at least a little branding and those that haven’t branded themselves at all.

1.3 Why do Brands matter?

Creating a successful brand entails blending all these various elements to­gether in a unique way—the product or service has to be of high quality and appropriate to consumer needs, the brand name must be appealing and in tune with the consumer’s perceptions of the product, the packaging, promo­tion, pricing and all other elements must similarly meet the tests of appropri­ateness, appeal, and differentiation.

An obvious question is why are brands important? What functions do they per­form that make them so valuable to marketers? One can take a couple of per­spectives to uncover the value of brands to both consumers and firms themselves.

1.3.1 To Consumers

As with the term product, this book uses the term consumer broadly to encompass all types of customers, including individuals as well as organizations. To consumers, brands provide important functions. Brands identify the source or maker of a product and allow consumers to assign responsibility to a particular manufacturer or distributor. Most important, brands take on special meaning to consumers. Because of past experi­ences with the product and its marketing program over the years, consumers learn about brands. They find out which brands satisfy their needs and which ones do not. As a result, brands provide a shorthand device or means of simplification for their product decisions.

If consumers recognize a brand and have some knowledge about it, then they do not have to engage in a lot of additional thought or processing of information to make a product decision. Thus, from an economic perspective, brands allow consumers to lour search costs for products both internally (in terms of how much they have to think) and externally (in terms of how much they have to look around). Based on what they already know about the brand—its quality, product characteristics, and so forth— consumers can make assumptions and form reasonable expectations about what they may not know about the brand.

Brands can also play a significant role in signaling certain product characteristics to consumers. Researchers have classified products and their associated attributes or benefits into three major categories: search goods, experience goods, and credence goods. With search goods, product attributes can be evaluated by visual inspection (e.g., the sturdiness, size, color, style, weight, and ingredient composition of a product). With experience goods, product attributes—potentially equally important—cannot be assessed so easily by inspection, and actual product trial and experience is necessary (e.g., as with durability, service quality, safety, and ease of handling or use). With cre­dence goods, product attributes may be rarely learned (e.g., insurance coverage). Because of the difficulty in assessing and interpreting product attributes and benefits with experience and credence goods, brands may be particularly important signals of quality and other characteristics to consumers for these types of products.

Brands can reduce the risks in product decisions. Consumers may perceive many different types of risks in buying and consuming a product:

*Functional risk: The product does not perform up to expectations

*Physical risk: The product poses a threat to the physical well-being or health of the user or others

*Financial risk: The product is not worth the price paid

*Social risk: The product results in embarrassment from others

*Psychological risk: The product affects the mental well-being of the user

*Time risk: The failure of the product results in an opportunity cost of finding another satis­factory product

Although there are a number of different means by which consumers handle these risks, certainly one way in which consumers cope is to buy well-known brands, espe­cially those brands with which consumers have had favorable past experiences. Thus, brands can be a very important risk-handling device, especially in business to business settings where these risks can sometimes have quite profound implications.

1.3.2 To Firms

Brands also provide a number of valuable functions to firms. Fundamentally, they serve an identification purpose to simplify product handling or tracing for the firm. Operationally, brands help to organize inventory and accounting records. A brand also offers the firm legal protection for unique features or aspects of the product. A brand can retain intellectual property rights, giving legal title to the brand owner. The brand name can be protected through registered trademarks, manufacturing processes can be protected through patents, and packaging can be protected through copyrights and designs. These intellectual property rights ensure that the firm can safely invest in the brand and reap the benefits of a valuable asset.

As noted earlier, these investments in the brand can endow a product with unique associations and meanings that differentiate it from other products. Brands can signal a certain level of quality so that satisfied buyers can easily choose the product again. This brand loyalty provides predictability and security of demand for the firm and cre­ates barriers of entry that make it difficult for other firms to enter the market. Although manufacturing processes and product designs may be easily duplicated, last­ing impressions in the minds of individuals and organizations from years of marketing activity and product experience may not be so easily reproduced. In this sense, brand­ing can be seen as a powerful means of securing a competitive advantage.

1.4 Can anything be branded?

[Can organizations be branded?]

Brands clearly provide important benefits to both consumers and firms. An obvious question, then, is, How are brands created? How do we “brand” a product? Although firms provide the impetus for brand creation through their marketing programs and other activities, ultimately a brand is something that resides in the minds of consumers. A brand is a perceptual entity that is rooted in reality, but it is also more than that, reflecting the perceptions and perhaps even the idiosyncrasies of consumers.

To brand a product it is necessary to teach consumers “who” the product is by giving it a name and using other brand elements to help identify it—as well as what the product does and why consumers should care. In other words, to brand a product or ser­vice, it is necessary to give consumers a label for the product (i.e., “here’s how we can identify the product”) and to provide meaning for the brand to consumers (i.e., “here’s what this particular product can do for we and why it is special and different from other brand name products”). Branding involves creating mental structures and helping con­sumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the firm. The key to brand­ing is that consumers perceive differences among brands in a product category. As noted earlier, brand differences often are related to attributes or benefits of the product itself. In other cases, however, brand differences may be related to more intangible image considerations.

The universality of branding can be recognized by looking at some different product applications. As noted previously, products can be defined broadly to include phys­ical-goods, services, retail stores, online businesses, people, organizations, places, or ideas.

Brands extend beyond products and services. People and organizations also can be viewed as brands. The naming aspect of the brand is generally straightforward in this case, and people and organizations also often have well-defined images understood and liked or disliked by others. This fact becomes particularly true when considering public figures such as politicians, entertainers, and professional athletes. All of these different public figures compete in some sense for public approval and acceptance and benefit from conveying a strong and desirable image.

2: Introduction to Employer Branding

2.1 Defining an Employer Brand

Like a consumer brand, it is an emotional relationship, but between an employer and employee, one that radiates out from this core to other stakeholders, to the community at large, and obviously to potential employees. Employer branding is the development and communication of an organization’s culture as an employer in the marketplace. It conveys a “value proposition” – the totality of a culture, systems, attitudes, and employee relationship along with encouraging a people to embrace and share goals for success, productivity, and satisfaction both on personal and professional levels.

Employer branding is the essence of the employment experience, providing points that commence with initial employer brand awareness, and continuing throughout the tenure of employment, even extending into retirement. Employer branding is a distinguishing and relevant opportunity for a company to differentiate itself from the competition creating its branded factors as its USP for employee satisfaction and happiness resulting in retention, productivity and efficiency.

2.2 Elements/ Essentials of an Employer Brand

Few things that form an Employer Brand are:

§ AN EMPLOYER BRAND MUST ARTICULATE A PROMISE TO EMPLOYEES.

Just as every business has a customer brand, every business has an employer brand, too. Whether or not a business has ever spent any time developing it. That’s because every business needs employees. And as it recruits and retains and motivates, a business needs to clarify what it stands for. Why it must exist. What difference it can make. What it believes in. How its offerings align with its values. And if a business doesn’t define an employer brand, just ask the recruiters. They will tell the story based on their own experience. In fact, more than 90 percent of people on line looking for jobs say they must very closely or closely understand the value of working for a company, according to the 2005 poll by Yahoo! Hot Jobs.

An employer brand is a promise to employees to provide an experience that, in return, will motivate their commitment to deliver a customer brand. The real spirit of a employer brand is a combination of what a business may promise and deliver, inside and outside. Essentially, it’s about a relationship, between a business and a people.

How business generally approaches people, or talent, has actually changed a bit over the years. We can remember when business viewed employees as followers in a campaign—people who simply did as they were told. Then, as time passed, business progressed to considering employees as partners in the implementation of strategies. This led, in recent years, to a consideration of the exchange between employees and business—sort of a “we do this in exchange for this”—to express the relationship. But that was primarily a financial transaction. And over time the old ways of framing the relationship functionally became outdated. Employees began to demand a relationship that reached for something more: an emotional connection. That’s where employer brand makes a difference. An employer brand can be a magical combination of what a business values, offers, and rewards—marrying what a brand promises outside with what a experience demands inside; what a business believes in and how we fundamentally respect the people who deliver a brand.

§ AN EMPLOYER BRAND MUST SUPPORT A BUSINESS STRATEGY.

But one can’t just build an employer brand because everyone else does. It’s too important. There’s too much it must accomplish. The need must come from a business strategy. “The key to a successful employer brand is alignment with the business strategy,” says Yvonne Larkin of Diageo. Together the business and organization strategies give the employer brand a reason for being. The power of employer brand is how it connects the internal experience to the external business need. How it grounds the necessity for this internal experience in the economic realities of the buying decisions a customers make. For example, is a business in a phase of rapid growth? An employer brand is essential to a growth strategy. That’s because growth will demand that a business continue to hire the right people in the right jobs at the right time. And keep the people we currently have. This constant effort to recruit and re recruit demands that a business enjoy a reputation in the marketplace that will support ambitions for growth. An employer brand can help a business clarify what will and will not change as we grow. And what growth means to the people who choose to work for we.

Or is a business shrinking? An employer brand is essential to a strategy for stability. It can, simply, give employees something to hold on to during periods of significant turbulence. An emotional connection with employees will be tested as a business faces challenges, such as reducing a size without cutting out a heart, or shifting a direction from what employees may consider sacred.

And is a business changing? Considering or pursuing new strategies? An employer brand is essential to any change strategy simply because it provides a focal point for employees. An employer brand is a touchstone for a employees, as their willingness to emotionally connect may be tested with each action each day. The essence of effective change management is effective stability management, giving people things to protect as they adjust to things that change. An employer brand can give people that emotional anchor as they may emotionally react to how they are expected to change. It can help people sing off the same page and embrace a common vision.

§ AN EMPLOYER BRAND MUST DEFINE, FOR EMPLOYEES, WHAT A CUSTOMERS EXPERIENCE.

An employer brand will never thrive if it’s only an HR thing or a Communications thing. If its only purpose is to “make people feel better.” It will only thrive if it makes a difference in results by making a difference to customers. If it supports every touch point a customers have with a business.

Such importance is a key reason why Hallmark, as part of its internal efforts to excite employees about its consumer brand, annually gives each employee a “card pack” as a friendly way to tell others of sending greeting cards.” The card pack is just that—an attractive folder with three greeting cards inside, along with a note to the employee suggesting that they share this pack with someone outside Hallmark and their immediate family, such as “a new neighbor, the person sitting next to them on an airplane or bus, or the helpful sacker at the grocery store.” The approach clearly connects employees to consumer touch points to help share Hallmark’s mission of enriching lives. A customer who has a positive experience will be more likely to return. But that positive experience doesn’t simply happen. People make it happen. And most of these are employees of a business. A customer’s experience, regardless of the product or service a business offers, is a series of reactions and observations at each touch point: how people notice, observe, hear, experience, and talk. Every brand experience has a defining moment. An authentic brand experience will be consistent from one person to the next because employees internalize what they must accomplish at each customer touch point. And ultimately they will tell others what they think based on what their experience.

Commitment to the brand is just as important for an employee who touches customers as for an employee who never sees a customer. People who work with customers must “live the brand” in every interaction they conduct. Others, at the same time, work behind the scenes to make sure customer-facing employees have the tools and support they need for a positive interaction. Any business has people who never see a customer but who, in every interaction, represent the brand.

Regardless of where an employee works, the commitment to deliver the brand involves internalizing the promise the brand makes, developing the skills necessary to deliver the promise, and displaying the behavior necessary when implementing those skills. At every touch point.

§ AN EMPLOYER BRAND MUST DEFINE WHAT A BUSINESS NEEDS FROM AN EMPLOYEES.

All the magical things that can happen when a brand connects with customers don’t simply happen. Employees make them happen. An employer brand is more than simply articulating what the customer brand is all about. A employer brand must define what a business needs from employees to deliver the brand

Two things must happen for any employee of any business— from the smallest gas station on the corner to the largest global business—to live the brand. First, the employee must understand what the brand is all about. The employee must understand and internalize the essence of what a business is about—how that essence authentically applies to the products and services and experiences a business offers, and how the customer brand articulates this essence.

What customers expect. To successfully deliver the brand promise to customers, the employee must understand the difference a business makes to customers—through its brands as well as what employees are expected to deliver. Which is the difference between doing the job and delivering the brand?

Second, the employee must believe how the brand differentiates from what else is available on the market. It’s not enough for the employee to believe the product, service, or business is a better choice. The employee must seriously believe it is the only choice.

How the brand is aspirational. The employee must believe in the authenticity of the pictures the brand can create. The idea the brand promotes. How the brand reaches beyond a single product or service to articulate the cumulative purpose of a business behind the brand and how it connects to what people aspire to be.

How the brand is inspirational. The employee must believe in the authenticity of the brand. What a business stands for. How it differentiates from others, not just in products and services, but in fundamental integrity. How its business proposition stands apart. What is unique in how a business inspires people to connect?

How the brand is emotional. The employee must feel a sense of ownership in the brand, how the brand represents a business and anyone who works for a business. As if each employee wears the brand on his or her sleeve. And it certainly involves more than wearing a logo on a shirt. This has everything to do with the values of a business. It’s as if, to strongly believe in the brand, the employee must believe there is something at this business they simply cannot find anywhere else. This has everything to do with how the employee’s values align with the values of a business. And if everyone in a business shares and aligns with these values, the brand will grow stronger.

How the brand is functional. Finally, the employee must believe the products and services a business produces will actually work. They must believe in the functional integrity of what a business delivers.

§ AN EMPLOYER BRAND MUST DEFINE ON-BRAND BEHAVIOR.

On-brand behavior is what brand is all about.

Any business needs specific behaviors from employees to deliver its brand promise to customers. This on-brand behavior occurs when an employee acts (or delivers) in a way that is consistent with what the brand is all about. And it’s important because customers experience the brand only when employees deliver the characteristics the brand promises—when the behavior of employees supports the promise of the brand. The key to delivery of the brand is the on-brand behavior of employees at each touch point.

P&G carefully outlines the principles for creating exciting, memorable P&G experiences—in short, a summary of on-brand behavior. In materials distributed to employees, the company says, “To make the experience personal for a consumer, the employee is encouraged, for example, to anticipate, appreciate, and respond to diverse styles, needs, and motivations. To put the guest in the center of the experience, the employee is encouraged to be genuine and authentic in actions and behavior. To deliberately build a consistent delightful experience for the consumer, the employee is encouraged to define and execute a total experience from the very first moment the guest is made aware through the final follow-up. To make the guest’s experience comfortable and seemingly simple, the employee is suggested to put the guest at ease. And to respond generously and selflessly to delight, and go beyond what is expected, the employee is encouraged to always look for ways to improve an experience.”

The role of the employee to deliver the brand will differ from one business to another, simply because of the differences in what businesses offer. On-brand behavior is just as important in businesses whose employees never see a customer. Employees create what a business sells to customers. And customers experience the brand.

§ AN EMPLOYER BRAND MUST CONNECT WHAT HAPPENS OUTSIDE TO WHAT HAPPENS INSIDE.

A business has a customer brand as a place to buy—and an employer brand as a place to work. While a customer brand focuses on specific products or services available externally, an employer brand may highlight distinct experiences or opportunities available internally. An employer brand, on the inside, frames the experience a business creates for employees, so they in turn deliver the brand promises to customers. In fact, the only way an employer brand can authentically reflect a business is if it articulates an identity, mission and values. That can happen only if an employer brand builds from the inside—to incorporate an essential identity, mission, and values. But it’s not just about what happens inside a business. To fully picture the potential of an employer brand, we must focus on what happens outside—and what an employees must deliver.

§ A EMPLOYER BRAND MUST FOCUS ON EMPLOYEE CHOICE

Every day, employees make choices about where and how to work. They view each stage of their relationship with a business as a brand experience that a business delivers. Some may consider new opportunities they believe may better meet their personal expectations. Some may wonder “What’s in it for me?” if they contribute to the demands of the job and a business. Some may decide to depart a business about which they hold memories of what they experience—and they likely will share those experiences with others still actively connected to or certainly considering a business as an employer. That’s why a business needs to use its employer brand no matter what it is doing or w