Minchington (2005) describes employee branding or internal branding as "the image projected by employees through their behaviours, attitudes and actions".
Employee branding is an indirect branding effect in which the company employees portray their company's employer brand. According to Harquil (2005) employee branding shapes employees' behaviour so that they project the brand identity of their organization's products through their everyday work behaviour.
In any competitive business environment companies have to take advantage of every opportunity to be successful. One of the ways that companies try to do this is through a company brand strategy (Kotler, 2003). Spark (2004) believes 'the value of a brand correlates directly to the value of the business'. The concept of a brand has however undergone a huge development in recent years and now defines the relationships with all of the company's key stakeholders, including employees (Spark, 2004).
However, many organisations do not think about the role that their employees can play in company branding. This can vary from the level of customer service achieved to the influence on the stakeholder opinion but all in all employee behaviour will impact on the brand perception and will ultimately affect the bottom line (Beagrie, 2003; Fram and McCarthy, 2003; Mitchell, 2002; Simms, 2003). A higher level of employee brand loyalty is related to higher levels of employee job satisfaction (Fram and McCarthy, 2003).
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Payne et al (2001) note that 'organisations should have the goal to re-orientate the entire business to face the market. When done properly, it can generate higher levels of employee brand loyalty, which can translate into incremental sales and increased profits, whilst simultaneously differentiating oneself from the competition' .
According to Aurand et al (2005), employees have a better attitude toward the brand of the company and are more likely to incorporate this image into their work when HR have a level of involvement in the internal branding process.
There are a number of characteristics that have been looked at to allow companies to successfully obtain employee commitment to living the brand of the organisation. Performance management is one of these key factors. Philpott and Sheppard state the purpose of performance management 'is to establish a culture in which individuals and groups take responsibility for the continuous improvement of business processes and their own skills and contributions'. Welbourne (2003) suggests that incentives and rewards need to be brought into line with the accomplishment of company, departmental and also personal goals. This is supported by Mullich (2003) who adds that each employee needs to be assessed, graded and given feedback on how they have performed against their own targets and the company's goals. Performance management is the main way of evaluating employees and giving them feedback. There is a close link between the employment relationship and obtaining employee commitment to living the brand of the organisation, the suggestion is that conducting successful performance management needs to be evident, for employee branding to be a success.
Furthermore, according to Armstrong (2000) they integrate measurement and reward criteria into their overall performance management system to track, evaluate and reward employee commitment to living the brand of the organisation.
Mullich (2003) adds that employee branding can only occur when employees can see that their efforts fit together with the company's corporate goals. Mullich argues that people talk about aligning employee, departmental and corporate goals, but few companies actually do it. In order for the brand to come alive for employees, they need to have a secure understanding of who the internal customer is. The products and services companies offer is how they would define themselves, says Mullich, but companies are actually defined by the productivity, quality and service of their workforce, that is to say the performance of their employees. Mullich believes a true identity begins from within a company itself, so if employees cannot project the message that the company is trying to express, that message will not be clear to customers. Furthermore Mitchell (2002) notes that employees must know everything customers know about the company, long before customers now. Employees should be treated like customers in order for them to buy in to the company's brand.
Employee loyalty is another important aspect in employee branding, as 'loyal employees make up the core of a successful business, managing the company, designing products and services, selling new business and interacting with customers everyday' (Larsen, 2003). According to Larson (2003) and Robbins (2003), the companies that are successful at employee branding have an internal employee branding programme which builds employee loyalty through: informing, motivating, energising and engaging employees. Loyal employees also pass on a more positive effect on sales and profits, as a result of others coming into contact with a company's internal brand champions (Fram & McCarthy, 2003).
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According to the CIPD, the research on employment branding is concerned with the need for employees to 'live the brand'. They argue that it is critical for the HR function to develop a compelling story for existing and potential employees about working for the organisation.
The companies that are successful in employee branding also compete for talented employees and focus on their needs (Czaplewski et al., 2001). According to Czaplewski et al. (2001), when companies look to attract new employees, they should be more concerned with hiring people with the right attitude rather than the right skills as attitudes are difficult to change, whilst skills can always be learnt.
Employers of choice are those companies that do the best in attracting, developing, and retaining people with business related talent. They achieve this status through inventive and exciting benefits for both employees and their organisations alike (Copeland, 2000).
James (2000), Mitchell (2002) and Beagrie (2003) argue that in order for employee branding to be successful, it has to be made a key business objective; this starts with senior management. Senior managers have to offer a clear vision worth pursuing, which emphasises the 'bigger picture' to employees. This is further supported by According to James (2000) and Mitchell (2002) who reiterate that these companies make employee branding a key business priority. Furthermore, according to Clifton (2002), successful internal branding strategies always begin with a good management team which completely understands its people. Clifton says that companies that are successful at inspiring their employees to get involved in their employee brand are already halfway there. Kirby Webster (2004) focused on the sandwich chain 'Pret A Manger' where prospective employees of Pret A Manger are asked to work for a day in one of the company's outlets. At the end of the day the employees of the shop are asked to make a decision as to whether the new recruit will "fit in". This gives the current employees more authority and also leads to brand pride and loyalty amongst workers.
According to Beagrie (2003) internal marketing is also a point to be looked at and can also be considered the vital part of communication for the employment relationship. Therefore internal marketing is the right way to obtain employee commitment into living the brand of the organisation. Beagrie also suggests that employing the same type of influential communication that companies place on market products and external services is the best way to do this. Mitchell (2002) supports this view, and proposes that internal and external marketing should be linked to ensure that employees hear the same message that their customers do. However, Simms (2003) argues that undertaking a joint human resources and marketing approach, where employees are aligned with the brand positioning, and have the policies and processes in place to implement them is the best solution. Companies that succeed at internal marketing treat the consumer and employee brand as two sides of the same coin and put together their communications accordingly.
Furthermore, internal marketing has a number of other HR and organisational benefits, including; improved retention rates, high levels of employee satisfaction, wider acceptance of any change programme and reduced absenteeism (Beagrie, 2003). Internal marketing can consequently create increased levels of employee brand loyalty that can translate into higher sales and therefore profit. Therefore, internal marketing may have a key role in obtaining employee commitment to living the brand of the organisation.
According to Williams (1989), company culture also needs to be considered on an on going basis and are prepared to effect changes when necessary. According to Bendapudi and Bendapudi (2005) 'living the brand' of the organisation means that an employee must behave in a way that is representative of that company's culture. They suggest that companies should 'â€¦consider employees their living brand and devote a great deal of time and energy to training and developing them so that they reflect the brand's core values'. Williams (1989) found that getting employees to live the brand is a major organisational initiative. Ind (2004) also found that many companies had to change their culture in order to obtain employee commitment and buy in to the brand.
Henkel et al (2007) showed that an informal management and style made a stronger impact on the brand consistency of employee behaviour than formal management styles. They suggested that managers should create an environment that allows staff to find their own individual ways of projecting the company brand to customers. Managers should spend time giving explanations and discussing the targets of behavioural branding.
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However, Mitchell (2002) believes that in order to have successful employee branding, companies need to create an emotional connection with employees to make the brand come alive and persuade them to align their values and behaviours with that of the company's brand. Das (2003) proposes this is driven by six factors: reward, recognition, relationships, opportunity, environment and leadership. Das says this will consist of three key elements: 'say' (where employees speak positively about where they work); 'stay' (not only do employees stay, but show this by wanting to contribute to the good of the group) and 'strive' (where an employee goes the 'extra mile' in contributing to the organisation).
Furthermore, Hankinson (2004) suggests there are four components to the internal brand; functional (the purpose of the business), symbolic (the values of the business), behavioural (managerial practise) and experiential (the culture of the workplace). However, this study referred to the charity sector so may not be applicable to the other sectors such as manufacturing.
Nonetheless, Murray (2004) writes 'the challenge is to move from an ill-defined understanding of "how we do things around here" to a sharp, clear statement of how we want things done. It is not rocket science, but it takes work and the full backing of top management. In fact, if top management is not thoroughly committed to developing and enforcing stated company values, don't even start.'
Murray suggests there are three inputs that need to be looked at; a definition of the key factors of success, an assessment of the values of top management and an employee survey. A definition of key factors involves looking at the companies own industry and asking at this point in time, what must we do to be successful? For an assessment of the values of top management, the company values statement will fail if it is not enforced and top management must enforce it. If the values that management are enforcing are not their own, they will not enforce them, this backs up what Bendapudi and Bendapudi (2005) found. An employee survey would be a good idea for a big Company but as Tensator are a small company it would probably not be applicable.
Therefore, having looked at the literature, there are a number of common themes which need to be looked at in successful employee branding. These are; performance management, employee loyalty, making employee branding a key business priority, communicating a clear set of values to employees, competing for talented employees and focus on their needs, an informal management style, company culture, forming an emotional connection with employees and internal marketing.
As seen, rewarding employees for engaging in the employee brand is paramount to the success of the brand.
Research shows that employees prefer working for companies that have great reputations. "Satisfied customers are better to deal with, and satisfied employees give better service. At the end of the day, while customers appreciate better quality products and services (i.e., a great brand), employees derive satisfaction from being part of an enterprise that is associated with an enviable market reputation." (Srivastava, 2004). Parish (2007) further illustrates this point with statistics from the banking industry: 68% of employees leave because of poor employee attitude. Forty-one percent of customers are loyal because of a good employee attitude and 70% of customer brand perception is determined by experience with people. Employee branding also includes the benefits that a Company offers.
Steve Miller, a business and management trainer, warns: 'We've had it easy over the past 10 years, but the next two years at least will see businesses cutting costs like never before. My advice to HR professionals is simple, cut the costs of your current reward package by at least 15% to help protect your organisation from the commercial pressures it will face over the next two years'. (in Blyth, 2008). However, others argue that it is a crucial time to invest in benefits; during times of financial crisis (Pegg, 2009, Washington, 2009).
The CIPD reward management surveys show that there are wide range of perks and benefits on offer to employees, from the traditional (such as paid leave or occupational sick pay) to newer ones (such as on-site massages, concierge benefits and bicycles). The same research showsÂ a large number ofÂ organisations looking into voluntary (where employers provide third-party goods and services at a discount) and flexible benefits schemes (formalised systems that allow employees to vary their pay and benefits package in order to satisfy their personal requirements).
According the CIPD 'Employee benefits should be provided to support the business goals of the organisation by attracting and/or encouraging the behaviours and values that it needs to be successful - attract, recruit and engage.'
The CIPD have found that individuals are attracted, retained and engaged by a range of non-financial and financial rewards and that these can change over time depending on their personal circumstances. It is important for businesses to find out what attracts, retains and engages employees and then explore how they can best meet these needs.
Furthermore, Armstrong et al (2009) suggest that a business needs to establish and execute a reward strategy which clearly communicates and integrates the aims of the various reward elements and lets employees know what they can expect to receive and why. It is essential that this strategy is written, communicated and understood throughout the organisation.
Carraher (2011) found that both pay and benefits are important for employees. Pay looks to be important for attracting employees and benefits are important for keeping them. However, this research is limited as it was conducted in Eastern Europe and may not be applicable to the UK.
Furthermore, Spark (2004) believes 'the value of a brand correlates directly to the value of the business.' Recently, branding has developed so that they are not just visible or emotional symbols. Instead, they define the relationships with all of the company's key stakeholders, including employees.
Antikainen et al (2010) found that rewards and benefits are better received if employees have input into what they are. This is also backed up by Meyer (1997) and Schein (1990).
According to Ferguson et al (2009) companies should learn to recognise and reward only their best employees. The best performers will deliver the goods in the economic experienced at the moment and, when the economy improves, companies do not want to see these top performers heading off to greener pastures. An example of this is an American company; Circuit City. In March 2007, Circuit City replaced 3,400 of its "highest-paid" store employees with cheaper workers. They then later posted a first-quarter loss and many blamed the job cuts for this downturn. It looked like the highly paid sales people had been very good at their jobs; they sold to more cautious customers whom their less knowledgeable replacements failed to win over.
So all in all, there are a number of considerations to be made when implementing a new reward or benefits scheme;
Employee benefits should be provided to support the business goals of the organisation, businesses need to find out what attracts, retains and engages employees and then explore how they can best meet these needs, employees have input into what they are and companies should learn to recognise and reward only their best employees. Furthermore, when the strategy is in place, employees but let their staff know what they can expect to receive and why.