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Organizational Psychology – Recruitment and Competitive Advantage

Answers the Question

What impact do applicant reactions to recruitment and hiring processes have on Brand Equity?

Introduction

There is some evidence that employment brand equity affects job seekers’ attraction to and intentions to apply to organizations. While employment brand equity seems to be an important concept, the real effects of brands on recruitment outcomes needed to be clarified.  Researchers have clearly identified the dimensions of employment brand equity and explored how employment brand  equity is created. While there is some evidence that recruitment activities affect job seekers’ perceptions of employment brands, very little attention has been given to the potential effects of organizational brand building activities (e.g. corporate marketing and advertising), although it has been proposed that there might be spillover effects of organizational marketing on job seekers’ perceptions of the organization as an employer.

The research streams of organizational identity, corporate reputation, or- ganizational image, corporate culture, corporate branding and corporate communica- tions provide a lot of related concepts and definitions which are relevant to employer branding. Especially corporate reputation and orga- nizational image have to be considered when approaching the topics of employer branding and employer attractiveness.

The Brand equity perspective examines potential dimensions of employment brand equity, and the effects of organizational brand-building activities on employment brand equity and recruitment outcomes.

A knowledge economy emphasising the need for talented employees combined with significant demographical and sociological changes in society, poses new challenges for organisations. Within this complicated context characterising today’s labour market, organisations need to increase focus on employer brand strategies to attract the talented and highly skilled employees.

However, in the eagerness of creating a unique employer brand and attract the talents needed, the organisations risk building expectations they are not able to fulfil after the talents enter the organisations.

Brand Equity

Key Terminology

  • Recruitment - the process of attracting, screening, selecting, and onboarding a qualified person for a job. At the strategic level it may involve the development of an employer brand which includes an ‘employee offering’.
  • Employer Brand Equity - the package of functional, economic and psychological benefits provided by employment, and identified with the employing company
  • Person-Environment Fit - the degree to which individual and environmental characteristics match
  • Organizational Image - Mental picture that springs up at the mention of a firm’s name. It is a composite psychological impression that continually changes with the firm’s circumstances, media coverage, performance, pronouncements, etc.
  • Pre-socialization - the informal adoption of norms or behaviour appropriate to a status not yet achieved by the individuals concerned, so providing them with experience of a role they have yet to assume.
  • Employer Reputation - an opinion about that entity, typically a result of social evaluation on a set of criteria. Reputation may be considered as a component of identity as defined by others.
  • Employee Value Proposition (EVP) – the balance of the rewards and benefits that are received by employees in return for their performance at the workplace.

In Brief 

An organization’s efforts to recruit job seekers are similar in many ways to the organization’s efforts to attract consumers to purchase their products or services. Specifically, job seekers and consumers both develop positive or negative perceptions about companies and jobs based on their exposure to messages communicated by an organization.

Despite various definitions and differing approaches to employer branding, there is common agreement on the fact that employer branding includes selected concepts from brand management which are transferred to HR management and recruitment.

According to Branham employer branding is “applying traditional marketing principles to achieving the status of Employer of Choice… the process of placing an image of being a great place to work in the mind of the targeted candidate pool.”

This image of being a great place to work is generally referred to as employer image. The term is often used interchangeably with the concept of employer attractiveness in scientific and practitioner literature.

When classifying HR management according to levels into strategic, tactical and operational management, employer branding can be attributed to the category of strategic HR management, since it is focused on the strategic goals of the company as a whole. In comparison, tactical elements are focused on groups of employees and jobs while operational elements are aimed at single employees and jobs.

Most of the current employer branding research is based on the instrumental-symbolic framework, which is taken from brand management literature.  Functional or so-called instru- mental brand benefits describe the objective, tangible and physical attributes of a product which are linked to people’s need to maximize rewards and minimize punishments. Symbolic benefits relate to the subjective, abstract and intangible attributes and are linked to people’s need to maintain their self-identity, to express themselves, or to enhance their self-image

In the employer branding context, instrumental attributes refer to the job or the organization in terms of objective and concrete attributes, such as salary or leave allowances, whereas symbolic attributes describe the subjective, intangible, and abstract aspects of an organization or job, and are often related to perceptions about the prestige of a firm. In the organizational context, they convey symbolic company or job information via imagery and trait inferences assigned to the organization by current or potential employees.

In order to induce positive associations and hence a favorable employer image, em- ployer branding involves the creation of a unique employer value proposition (EVP)8, which encompasses the employment advantages and benefits (instrumental attri- butes) as well as key organizational values (symbolic attributes)

What does this mean for Organization Development?

Importantly, potential employees are affected by elements such as marketing, organisational communication, organisational reputation, employer branding, word of mouth, and the media. All elements of which an organisation is able to affect in some way and thereby interact with potential employees in constructing these employer associations. By integrating the employer brand as a vital part of the organisation’s overall communication strategy and anchored in the overall organisational strategy, an organisation may be able to influence the pre-employment context.

Employer branding is a strategic process which entails incorporating employer brand communication, messages, and symbols in everything the organisation does, meaning that the company logo, advertisements, online communication, internal communication and management, employer branding etc. should reflect the desired employer brand messages.

Organisations might be able to, indirectly, increase the employer brand exposure and thereby interact with potential employees in the construction of employer associations. Further, this enables the organisations to impact what expectations are build towards the employment relationship and thereby attempt to avoid expectations they are not able to fulfil after organisational entry.

If organisations, on the contrary, choose to let the coincidental experiences described above, by not integrating the employer brand strategically, they risk potential employees building false expectations, forming untrue or negative employer associations and thereby not being able to attract the employees needed to ensure future organisational success. Therefore, a strategic integration of the employer brand process is required when building recruitment, selection, on-boarding and reward processes.

The second implication concerns managing word of mouth which is a significant factor in building employer associations, especially when it comes to company visits, career related events, and having acquaintances working at an organisation.

Organisations can apply this knowledge into the management process of the employer brand as well as into existing HRM policies and practices. At the very core lies the fact that satisfied employees will portray the organisations positively and dissatisfied employees will portray the organisation negatively. Therefore, to ensure a coherent employer brand process an organisation can benefit from examining and communicating the employee journey throughout the organisation. By offering the employee an honest and coherent employer brand experience throughout his/her journey in the organisation, an organisation can potentially impact the word of mouth communicated internally and externally.

Finally Employer brand equity affects how the organisation impacts the formation of the psychological contract surrounds the honesty or accuracy of the employer brand communication.

The employer brand and other forms of organisational communication impact the formation of the psychological contract. For example; pre-socialization beliefs are likely to affect and employees psychological contract after organisational entry. Thus, organisations must ensure that the communication offerings presented before organisational entry corresponds with the actual employment offerings.

Organisations must strive to display an accurate image of the organisation and its offering to avoid running the risk of creating unrealistic expectations, which will lead to disappointment and possible intentions to leave. Thus, acknowledging the importance of an accurate employer brand will aid organisations to avoid the possible dilemma of breached expectations as presented in the introduction.

Therefore, displaying an accurate and coherent image of the organisation in both internal and external communication is a prerequisite for impacting the formation of the psychological contract positively.