Employer Brand Image as Predictor of Employee Satisfaction, Affective Commitment &

Turnover
Author(s): Pushpendra Priyadarshi
Source: Indian Journal of Industrial Relations, Vol. 46, No. 3 (January 2011), pp. 510-522
Published by: Shri Ram Centre for Industrial Relations and Human Resources
Stable URL: https://www.jstor.org/stable/41149467
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 Employer Brand Image as Predictor of Employee
Satisfaction, Affective Commitment & Turnover

Pushpendra Priyadarshi

The race for an employer to be Background

seen differently has only intensi-
fied in recent years mainly due to Employer branding has captured con-
the availability of multiple oppor- siderable attention in recent times. Aca-
tunities and scarcity of good demicians and practitioners have reported
quality talent in the emerging evidence of organisations expending con-
markets. Employer branding is siderable resources on development of
fast emerging a potential tool not employer brand programme indicating its
only to communicate the potential value (Backhaus & Tikoo 2004). Em-
employees but also to the exist- ployer branding as a concept is an ex-
ing employees that the value tension of relationship marketing prin-
proposition of the current em- ciples (Christopher, Payne & Ballantyne
ployer supersedes their competi- 1991, Kotier 1992, Morgan & Hunt
tors. Participated by 240 execu- 1994), which identify the need to build
tives from various organsiations acquisition and retention strategies across
the study shows the importance of a number of critical stakeholder markets
managing employer brand image through closer relationships. One of the
for existing employees through most basic understandings about brand
highlighting the difference be- comes from the definition provided by the
tween the existing and preferred American Marketing Association which
levels of employer attributes. It defines a brand as "a name, term sign,
further highlights the relation- symbol, or design, or combination of them
ship between employer brand at- which is intended to identify the goods
tributes and job related attitudes and services of one seller group or group
showing how these attributes im- of sellers and to differentiate them from
pact them. those of competitors" (Backhaus & Tikoo

Employer branding as a concept is

Pushpendra Priyadarshi is Assistant Professor I an extension of relationship mar- i
(HRM) at Indian Institute of Management, Lucknow keting principles
226013. E-mail: pushpendra@iiml.ac.ini

510 The Indian Journal of Industrial Relations, Vol. 46, No. 3, January 2011

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 Employer Brand Image as Predictor of Employee Satisfaction

2004). The term employer branding is Resource consultants Hewitt Associates

used for the application of branding prin- suggests five steps to developing a strong
ciples to human resource management. employer brand: (1) understand your
The concept is being increasingly used organisation, (2) create a 'compelling
for attracting prospective employees brand promise' for employees that mir-
while engaging the present employees to rors the brand promise for customers, (3)
the organisation. develop standards to measure the
fulfilment of brand promise, (4) ruthlessly
In a seminal work on employer align all people practices to support and
branding, also one of the earlier defini- reinforce brand promise, and (5) execute
tions on the subject, Ambler and Barrow the measure (Berthon et al. 2005). Ac-
(1996) defined employer brand in terms cording to Ritson (2002) companies with
of benefits, calling it 'the package of strong employer brands can potentially
functional, economic and psychological reduce the cost of employee acquisition,
benefits provided by employment and improve employee relations, increase
identified with the employing company'. employee retention and even offer lower
Further, employer branding or employer salaries for comparable staff to firms with
brand management involves internally weaker employer brands.
and externally promoting a clear view of
what makes a firm different and desir- The present study focuses on the
able as an employer. According to image audit step of the employer brand-
Backhaus and Tikoo (2004), employer
ing process because it is the basis on
branding is essentially a three step pro- which other steps develop. Given the key
cess. First, a firm develops a concept of role of image audit step, it should incor-
the particular value it offers to prospec-porate important stakeholder beliefs
tive and current employees. This valueabout the characteristics of an attractive
proposition provides the central messageemployer. Therefore, the purpose of this
that is conveyed by the employer brand.study is to examine the relative impor-
It is of key importance that this value
tance of different aspects of employer
proposition derives from a thorough au-brand
dit of the characteristics that make the
firm a great place to work. Once theReview of Literature
value proposition is determined, the sec-
ond step in employer branding consists Despite employer brand gaining con-
of externally marketing this value propo-siderable popularity in HR practitioner
sition to attract the targeted applicantliterature (e.g., Frook 2001) empirical
population. The third step involves car- research is still relatively inadequate
rying the brand "promise" made to re-(Cable & Turban 2001). Backhaus &
cruits in to the firm and incorporating itTikoo (2004) and Davies (2007) echo the
as part of the organisational culture. In asame sentiments and feel that the advent
sense the last step consists of internally of the employer brand as concept has
marketing the employer brand. Human been recent in academic field and its theo-

The Indian Journal of Industrial Relations, Vol. 46, No. 3, January 2011

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 Pushpendra Priyadarshi

retical foundation is gradually being de- scarce as most of them focus on poten-
veloped even though it is being consid- tial applicants. Our research captures the
ered and applied by practitioners for employer brand image of the current
sometime now. employees and its consequences.

Resource based view (RBV) pro- Although the study of organisational

vides the foundation of the concept of attraction has revealed some insights,
employer branding assuming human capi- there remains much to be learned (Bar-
tal brings value to the firm, and targeted ber 1998). One stream of extant research
investment in human capital should en- investigates organisational characteris-
hance firm performance (Barney 1991). tics and their effects on attraction to the
This framework has special significance organisation. Structural attributes such as
at a time when financial markets are in- decentralised decision making (Turban &
Keon 1993) and reward system (Bretz
creasingly recognising human capital as
a source of value for firms and share-et al, 1989), are shown to influence per-
holders (Cairncross 2000). Michaels etceptions of attractiveness. Gatewood et.
al. (1993) found that perception of an
al. (2001) propose the explicit develop-
ment and communication of employee organisation's image is a significant pre-
value proposition (EVP) to attract anddictor of decisions to pursue employment
retain talented employee. with that company. Using brand in the
context of employment, employer brand
loyalty was found by many to be a useful
Recruiting right type of talent be-
concept to be applied. Brand loyalty is
I comes critical, as does the em-
the attachment that a consumer has to a
ployer brand image in the recruit-
ment market.
brand (Aaker 1991). Applied in the con-
text of employment, employer brand loy-
alty is shaped by behavioural element
In the service industry, employees
relating to organisational culture and at-
play a critical role in developmenttitudinal
of element relating to organisational
brand image (de Chernatony & Segal-identity (Backhaus & Tikoo 2004). But
horn 2003, Me. Donald, de Chernatony
unlike in the case of a product, in em-
& Harris 2001, Bitner, Boom & Mohr ployment brand loyalty switching over to
another
1994). Therefore, recruiting right type of brand cannot be done so fre-
talent becomes critical, as does the quently
em- and comes at higher cost (Davies
ployer brand image in the recruitment2008). In a way employer brand loyalty
market (Ewing et. al. 2002). What is even
forges greater commitment level result-
more critical is whether this image that
ing in increased retention of the talent.
they carried as an applicant is sustained
Among benefits, a strong employer brand
attracts better applicants (Collins &
with their stay in the organisation (Knox
& Freeman 2006). Research studies in
Stevens 2002, Slaughter et al. 2004) and
shapes their expectations about their
the area looking for continued associa-
tion of these employees in particular employment
are (Livens & Highhouse 2003).

512 The Indian Journal of Industrial Relations, Vol. 46, No. 3, January 2011

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 Employer Brand Image as Predictor of Employee Satisfaction

One role of brand is to create and en- ment and turnover of the employees.
hance satisfaction and satisfaction pre-
4. To examine whether employer brand
dicts future behaviour towards the brand
image determined satisfaction, affec-
(Mittal & Kamakura 2001). Job satisfac- tive commitment and turnover.
tion plays a very important role in creat-
ing customer satisfaction (Heskett et alSample
1997) and understanding of the various
attributes of employer brand image can The respondents of the study con-
help facilitate customer satisfaction. sisted of professionals, mainly engineers
working in technical and non-technical
functions, in two telecom companies in
Employer brand loyalty is shaped
National Capital Region (NCR) Delhi.
I by behavioural element relating to
Nearly two hundred and forty profession-
organisational culture and attitudi-
als were contacted for the study out of
nal element relating to
which hundred and twelve responded
organisational identity.
(46.67%) to the survey of which ninety
two responses were found suitable for
Research Focus
the study. The average age of male re-
spondent was 28 years and for their fe-
The main objective of the study is
male counterpart it was 25 years. While
to understand employer brandmore
image
thanof75 % of the respondents were
an organisation from the perspective
Hindus of
the study was represented by
existing employees. The researchmajorques-
religious categories. 60% of the
tion that the study is designed to answer were males as against 40%
respondents
is 'Does employer brand image impact
females. Nearly 45% of the respondents
job related attitude of employees work-
had less than 5 years of work experience
ing there? If yes, the following objec-
while nearly 30% had more than 10 years
tives are identified to guide our under-
of experience.
standing of the nature of relationship
between employer brand image and job
Measures:
related attitude:

Demographic Data Sheet: The de-

1 . To understand employer brand image mographic data sheet was prepared by
(EBI) in its various dimensions. the author containing details of age, edu
2. To describe the existing employercation, religion, gender and work experi
ence of the respondents to obtain relevan
brand image, the image aspired and
information.
significant difference, if any, exist-
ing between the two.
Employer Brand Image: The study
3. To understand the nature of relation- used the instrument for employer brand
ship between employer brand image image designed by Knox & Freeman
and job satisfaction, affective commit-(2006). The instrument required the re

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 Pushpendra Priyadarshi

spondents to rate the 20 attributes of To test the underlying structure of

employer brand image according to their the work values, an exploratory factor
current status and importance. The cur- analysis was undertaken. The factor analy-
rent status, presented by whether they sis of these work values were performed
perceived their present organization dis- with the aim of collecting the same infor-
played this attribute, was rated on a five mation but in a reduced number of vari-
point scale ranging from strongly disagree ables. The final outcome was a more par-
(1) to strongly agree (5). Importance, simonious structure of work values. The
reflecting their perception of the attribute principal components method was used and
being important to the organization or not the factors were obtained by employing the
was rated on a five point scale ranging standard criterion of the latent root and ro-
from highly unimportant (1) to highly im- tation Varimax with Kaiser Normalisation.
portant (5). They were then asked for Only those items having factor loading
their ratings of these attributes for their greater than 0.4 were included in the con-
present employers. struction of the new factors.

Table 1: KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .764

Bartlett's Test of Sphericity Approx. Chi-Square 806.523
Df 190

Sig. .000

Prior to factor
ponent, and the item analysis,
loadings are shown
in Table 2. The factors
Meyer-Oklin (KMO) were named con- me
pling adequacy sidering the list and
of items under the
each com- Bar
sphericity ponent were pursued
and the respective loadings of the
of the data. The KMO was 0.764, items. Thus the various dimensions of
which was greater than 0.5. The employer brand image emerging were as
Bartlett's test of sphericity had a chi- follows:
square value of 806.523, with signifi-
cance lower than 0.000. Both statisti- Factor 1 : Organisational Environment
cal data supported the use of factor
(Eigenvalue = 3.51; Mean Value: 3.996;
analysis for these items. Latent root/
Cronbach's Alpha: .828)
eigen values were applied as the crite-
ria for selecting the right number of
factors (Kim and Mueller 1994, HairFactor
et 2: Organisational Fame & Flex-
al. 1995, Norusis 1994). The rotation
ibility
converged in seven iterations.
(Eigenvalue = 2.69; Mean Value: 3.87;
Cronbach's Alpha: .72)
The result of the component analy-
sis, the respective item under each com-

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 Employer Brand Image as Predictor of Employee Satisfaction

Table 2: Factor Analysis Details

Factors Short Description Factor Mean Cronn- Cumu-

Loading bach's lati ve
Alpha Vari-
ance

Factor 1 Freedom of initiative .72 3.99 0.83 17.53

Organisational Employs colleagues having things
Environment Dynamism in business .63
Informal Culture .69
Rotation of Job and Role .55
Investment in T & D .62
Meritocracy .58
Concern for employees .56
Factor 2

Organisational Size of the organisation .53 3.87 0.72 30.98

Fame and Prestigious Employer .75
Flexibility Scope for creativity .81
Stress-free work environment .59
Factor 3

Variety in Variety in daily work .84 3.927 0.76 44.12

Job and Diversity of colleagues .63
Work Work as per standard schedule .60
Setting Usage of academic degree .6 1

Factor 4

Compensation High salary .67 3.56 0.74 56.96

and career Opportunities for career progression .64
Opportunities for international Travel .86
Opportunities to live and work abroad .59

Factor 3: Variety in Job and Work

factors accounting for 56.96 percent vari-
Setting ance. 'Organisational Environment' came
out as the first dimension having highest
(Eigenvalue = 2.63; Mean Value: 3.927; mean value (M = 3.996) among all the
Cronbach's Alpha: .76) four identified factors and it accounted
for nearly 18 percent of variance. Free-
Factor 4: Compensation and Career dom to take initiatives supported by in-
vestments in employee development; dy-
(Eigenvalue = 2.57; Mean Value: 3.56; namic business approach coupled with
Cronbach's Alpha: .74) informal business culture which also re-
spects merit seemed to be driving what
Factor analysis of employer brand signifies as the overall environment of the
image for the organisation resulted in four organisation. This clearly marked the at-

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 Pushpendra Priyadarshi

Job Satisfaction was measured by

tractive proposition for the employees.
The second dimension was
Cammann et al. (1983) three-item scale.
'Organisational Fame and Flexibility'
A sample item is, "All in all, I am satis-
which had a mean value of 3.87 and ac- fied with my job" (á = 0.84). Respon-
counted for 13.45 percent variance. dents It responded to all items for the above
consists of organisational attributes re- scales using a seven-point Likert-type
scale with anchors (1) strongly disagree
lating to organisational reputation and size
having stress free environment where to (7) strongly agree.
employees have scope for creative ex-
pression. 'Variety in Job and Work Set- Affective Commitment: Organiza-
ting' was the third factor (M = 3.92) tional commitment was measured by the
which was signified by attributes like six-item affective commitment scale used
by Rhoades et al. (2001). A sample item
variety in daily work and diversity of col-
leagues and accounted for 13.14 percent is, "I feel personally attached to my work
variance. Compensation and growth wasorganization" (á = 0.90). Respondents
the fourth dimension and got its name replied to all items for the above scales
from the attributes like long term careerusing a seven-point Likert-type scale
and high compensation. This dimension with anchors (1) strongly disagree to (7)
accounted for 12.84 percent variance and
strongly agree.
had the mean value of 3.56.
Intention to quit was measured by
Colarelli's (1984) three-item scale. A
'Organisational Environment9
came out as the first dimension sample item is, "I am planning to search
for a new job during the next twelve
having highest mean value (M =
months" (á = 0.82). Participants re-
3.996) among all the four identified
sponded to all items for the above scales
factors and it accounted for nearly I
using a seven-point Likert-type scale
18 percent of variance.
with anchors (1) strongly disagree to (7)
strongly agree.

Table 3: Difference between Current & Preferred Status

Factors Mean Std. Deviation

Organisational Environment Existing 3.99 1.04113

Preferred 5.45 .86376

Organisational Fame and Flexibility Existing 3.86 1 .26636

Preferred 5.13 1.08083

Variety in Job and Work Setting Existing 3.92 1.07771

Preferred 5.38 .97671

Compensation and Career Existing 3.55 1.1 8853

Preferred 5.35 1.07304

516 The Indian Journal of Industrial Relations,

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 Employer Brand Image as Predictor of Employee Satisfaction

Table 3 describes the perceived im- present study will have to provide vari-
age of the organisation as also about their ety in work and suggests a difference on
preferred image and the difference, if any, all the organisational attributes.
between them. The result shows maxi-
mum importance accorded to organis-
The result shows maximum impor-
ational environment followed by variety
tance accorded to organisational
in work and work setting, opportunities
environment followed by variety in
and growth in career and organisational
work and work setting, opportuni-
fame and flexibility. As also the discrep-
ties and growth in career and I
ancy observed was highest among all the
organisational fame and flexibility.
attributes studied. Organisation in the

Table 4: Employer Brand Image and Job Satisfaction, Affective Commitment and Turnover:
Correlations and Descriptive Statistics (N=92)

MSD12345 67

Organisational 3.99 1.04

Environment

Organisational Fame 3.87 1.27 .48**

and Flexibility
Variety in Job 3.93 1.08 .56" .42"
and Work Setting
Compensation and 3.56 1.19 .36" .38" .41"
Career

JS 3.79 .93 .02 -.21* -.06 -.11

AC 3.63 1.38 -.20 -.2Г -.16 -.29" .52" -

IQ

♦♦Significant at the 0.01 level (2-tailed).

♦Significant at the 0.05 level (2-tailed).

Table 4 depicts
hence the attentionmean, stand to
deviation and ating
correlations opportunities amon
variables studied.
cultivate Theinformal compone c
and roles etc.
perceived employer brand It was also observed that imag
found to be correlated,
existing organisational famethe value r
and flexibil-
from 0.36 to 0.56, suggesting
ity was negatively related to both satis- conv
validity the of
faction measure.
(r = -.21) and commitment (rThe= - ex
organisational environment
.21) of the employees. It is not surpris-was fo
be negatively ing
related to affectiv
that this factor was positively related
mitment (r = -.20) suggesting
to intention to quit (r =.21). The employ- that
ing organisational environment
ees did not find the work having enough r
the commitment level
variety neither of being
their degrees the em

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 Pushpendra Priyadarshi

utilised, positive correlation with intention compensation and career growth corre-
to quit (r = .40) could be seen there. The lated negatively (r = -.29) to affective
existing opportunities for long term ca- commitment and positively to intention to
reer or international assignment was not quit (r = .22)
satisfactory as factor four representing

Table 5: Summary of Multiple Regression Analysis Predicting Respondents' Job Satisfaction,

Affective Commitment and Turnover

Dependent Variables

Job Satisfaction Organisational Fame -.15 .07 -.21 4.12* .04

and Flexibility

'ffective Commitment Compensation and -.33 .12 -.29 7.98** .08

Career

Turnover Variety in Job and .39 .09 .40 17. 17***. 16

N=92; *p<.05, **p<.01, ***p<.001

Multiple regression analyses were ibility was the only attribute found to be
performed to explore the causality be- relating to it (â = -.2 1 ; /K.05) albeit nega-
tween employer brand image and the tively. The other attributes viz.
three dependent variables namely, job organisational environment, variety in job
satisfaction, affective commitment and and work setting and compensation and
intention to quit the organisation. We career were not found to be significantly
tested for the direct effects of the vari- impacting job satisfaction. Commitment
ables in the regression model. In general, in today's context is one of the most criti-
the probability of Type I error increases cally desirable attitudes expected from
with the number of predictors used in the an employee. When we ran regression
analyses. Hence to reduce the likelihood equation to find out whether there was
of the Type I errors, a set of predictors any causal relationship between four at-
were introduced in to the regression tributes and commitment we found com-
equation and examined the significance pensation and career to be significantly
levels of individual variables only if the but inversely relating to commitment (â
entire set made significant contribution = -.29; /K.01). No evidence was found
to the regression equation (Cohen & for the other three attributes to be im-
Cohen 1975, Taylor & Bergmann 1987). pacting commitment. Intention to quit is
The results of various regression equa- a measure to know whether the em-
tions has been summarised in Table 5. ployee intend to leave the job. The re-
When regression equation was run on gression
job equation pertaining to turnover
proves that out of the four attributes,
satisfaction, out of four employer brand
variety and job and work setting was sig-
attributes, organisational fame and flex-

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 Employer Brand Image as Predictor of Employee Satisfaction

nifìcantly related to turnover of the em- The existence of the relationship be-
ployees (â = .40;/?<.001). tween employer brand attributes and job
related attitude of an employee was con-
Discussion firmed by the study. The study also
showed that there could be distinct ways
We identified measures to capture
in which various facets influence job re-
employer brand image and job satisfac-
lated attitudes and hence required dif-
tion, commitment and turnover as ferential attention. Second, the study very
organisational attitude. We found mixed clearly indicates that organisational fame
results as different facets of employerand flexibility was related to job satis-
image impacted all three organisationalfaction of the employees. Fame and flex-
attitudes. There is dearth of academic ibility accounted for some variance (4%),
work in the context of brand image im- what is significant is that employees felt
pacting the attitude of employees (Lievensthe organisation to be short of desirable
2007). The employee's perception of his/ prestige as also wanting stress free work
her employer's image is shaped by per-environment and scope for creativity.
sonal and professional experiences andThe negative relationship between
this in many ways determines his attitudeorganisational fame and flexibility could
and consequently his behaviour. Hence it be attributed to the discrepancy between
becomes important that an employer ex-existing and preferred levels of
amines, at regular intervals, the factors organisational attribute. This result how-
which are critical for retaining and engag-ever, is partly supported by Davies (2008)
ing the employees. The focus of earlierwhere satisfaction was determined by
studies has been mainly on prospectivefriendly and supportive attributes of an
candidate and the present study bringsorganisation. According to the findings of
out pertinent issues concerning brandthis study dimensions like, organisational
image and its impact on job related atti- environment, compensation and career
tude of existing employees. Lievensand variety in work setting were per-
(2007) recommends that internal auditsceived not to be contributing to job satis-
provide an organisation with richer and faction. Understanding the importance of
more comprehensive picture of their im-satisfaction with respect to increased
age which may eventually result in en-motivation and higher performance lev-
suring that a good candidate not only ap-els (Iaffaldano & Muchinsky 1985) and
ply but also stay working there. grater customer satisfaction (Ryan et. al.
1996) only reinforces the importance of
When regression equation was run addressing fame and flexibility issues in
organisations.
on job satisfaction, out of four em-
ployer brand attributes,
Organisational commitment is defined
organisational fame and flexibility
as identification and involvement with the
was the only attribute found to be I
relating to it. firm, including acceptance of
organisational goals and values, eager-

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 Pushpendra Priyadarshi

ness to work hard, and desire to remain rate image was found to be a significan
with the firm (Crewson 1997). The study predictor of decisions to pursue employ
used affective commitment as a second ment with the company. In this case th
consequent variable and found compen- image had specific reference to variet
sation and career facet of the employerin job and work setting.
attributes to be negatively related to it.
Limitations
Findings of the study are in line with
Backhaus & Tikoo (2004) who have
elaborated on employer brand loyalty and This study was conducted in selected
found it akin to organisational commit-Indian organisations and the results are
ment. 8 % variance in affective commit- contextual. More studies required for
ment was found to be determined by thegreater generalisation particularly in the
perception of existing employees of ca-
context of image audit for organisations
reer and compensation. Clearly the em- facing stiff challenge of attrition.
ployees did not perceive the organisationGneralisability for this study, its second
providing long term career option and weakness, is again restricted by the non-
compensation. Further, the employers in random nature of the sample used for the
this study needed to convey symbolicsurvey. Even though we used top two
benefits, typically innovativeness andtelecom companies (according to no. of
prestige (Lievens & Highhouse 2003), as
subscribers) the sample was small in size
organisational attribute to create distinc-
and had limited representation. We sug-
tiveness from other employers. gest and expect that future research in
employer image audit would have wider
Intention to quit is a measure used torepresentation from telecom companies
examine whether organisational at- to provide us with more clear understand-
tributes contribute to an employees' de-ing.
cision to quit an organisation and this
constituted our third measure. Cable and
Implications for Management
Judge (1996) attributed applicants' unbal-
anced information and unrealized expec- This study provides critical inputs
tation as the main reason of dissatisfac- about internal image audit and how does
tion and turnover of employees. Varietyit influence job related attitude. The
in job and work setting attribute in our Indian telecom sector has seen
study emerged as the factor positivelyphenomenal growth in the past few yea
contributing to intention to quit. Having and has attracted lot of talent who looks
16% variance for turnover the forward to long term career prospects
but awith
organisations failed in providing workmore private participation
retaining talent
setting where employees had diversity of and providing value has
become
colleagues, variety in daily work and equally
their critical for them. In a way
degrees being properly utilised.this
Thestudy
find-shows how various
ings here are in line with a organisational
study by attributes determine job
satisfaction,
Gate wood et. al. (1993) where corpo- affective commitment and

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