J Bus Ethics

DOI 10.1007/s10551-014-2502-3

Antecedents and Consequences of Employer Branding

Mukesh K. Biswas • Damodar Suar

Received: 23 June 2014 / Accepted: 9 December 2014

Ó Springer Science+Business Media Dordrecht 2014

Abstract This study reviewed and analysed the phe- Introduction

nomenon of employer branding. We began with a review of
recent research in employer branding. Next, drawing the The professional world views talents as a primary com-
theoretical knowledge from OB, HRM, and marketing, a petitive enabler of a business. Indeed, talent scarcity is
framework is developed depicting the antecedents of second to competition in threatening business success
employer branding and its impact on the company perfor- (Chambers et al. 1998). Many employers, therefore, adopt
mance. For this, primary data were collected administering various strategies to maintain a healthy talent pool. One
a questionnaire survey on 347 top-level executives in 209 such strategy, employer branding (EB), is a critical tool for
companies in India, and secondary data were collected on talent acquisition, development, and retention (Backhaus
financial performance. The results revealed that realistic and Tikoo 2004; Barrow and Mosley 2005; Gaddam 2008;
job previews, perceived organizational support, equity in Mandhanya and Shah 2010; Martin et al. 2011). EB helps
reward administration, perceived organizational prestige, to create a company brand that can be marketed to talents.
organizational trust, leadership of top management, psy- Although branding is a well-developed concept in mar-
chological contract obligations, and corporate social keting literature, perspectives on EB are still evolving
responsibility influence employer branding, which in turn (Backhaus and Tikoo 2004; Corporate Leadership Council
impact non-financial and financial performance of compa- 1999). On EB, while practitioners’ focus on employees
nies. Furthermore, leadership of top management is the attractiveness to an employer (Berthon et al. 2005; Bendara-
most potent predictor of employer branding. Greater viciene et al. 2013; Lievens and Highhouse 2003; Maxwell
deviation of the existing state from the ideal state of and Knox 2009), scholarly works remain conceptual and
antecedents adversely affects employer branding. Man- result-oriented (Backhaus and Tikoo 2004; Lievens et al.
agement can use this framework for developing strategy 2005; Martin 2009; Wilden et al. 2010). EB associates with
towards implementation of employer branding. employees’ employment experience within a company—
from applying for a job to leaving (Backhaus and Tikoo 2004)
Keywords Employer branding
Antecedents
and to comparing that company with the employee’s new one.
Consequences
Company performance This study focuses on furthering the conceptualisation of
Backhaus and Tikoo (2004) and Edwards (2010), which
seeks inclusion of HRM and OB theories. Therefore, it is
necessary to review product and corporate branding and
their application to EB in order to provide a comprehensive
picture of antecedents and consequences of EB.
M. K. Biswas (&)
D. Suar
Indian Institute of Technology Kharagpur,
Kharagpur 721 302, West Bengal, India Conceptual Framework
e-mail: [email protected]
D. Suar A review of the literature since Ambler and Barrow (1996)
e-mail: [email protected] introduced EB reveals that it has become an important

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word in management lexicon. The CIPD (2007) points out influence EB (Tuzuner and Yuksel 2009). While firmo-
four main reasons for the rise of EB: (1) the power of graphics include company age and location, attractive
branding, (2) the increasing focus on employee engage- components encompass scope for promotion, challenging
ment, (3) the war for talent, and (4) the impact of HR tasks, innovation, market success, career development,
practices on business. The idea of EB derives from cor- compensation package, work environment, work-life bal-
porate branding under the similar working principle: cre- ance, and firm reputation (Tuzuner and Yuksel 2009). In
ation of brands that are noticeable, relevant, and unique fact, the marketability of attributes of a company is
while positively impacting shareholders (Foster et al. 2010; ‘employer value propositions (EVP)’ (Corporate Leader-
Mosley 2007; Moroko and Uncles 2008). ship Council 1999; Sartain and Schumann 2006). EVP
Branding of products and services to consumers is an includes financial and non-financial offerings to targeted
ongoing process of communication about image or repu- employees (Corporate Leadership Council 2004). As
tation (Levitt 1980). This communication can relate to an product branding enables marketers to understand their
employer (Ambler and Barrow 1996), to persons and pla- customers, EB provides a platform to HR managers in
ces (Uggla 2006), or to an organization (Davies 2008). understanding employees. Although studies do not advo-
While corporate branding addresses positive and negative cate single EB model working for all companies, studies
associations of stakeholders with the business (Balmer carried out by agencies like Hewitt Associates (2000) and
2001; Hatch and Schultz 2009), EB addresses existing and Universum (2012) indicate the possibility for a single
potential employees. The distinctive element of a brand model. The scrutiny of EB processes can help in identi-
differentiates product manufacturers and service providers fying such a model.
from their competitors. EB, therefore, is the process of The EB process requires the employer internally and
building an identifiable and unique employer identity that externally promoting a clear view (Backhaus and Tikoo
differentiates the company from its competitors (Backhaus 2004; Cable and Turban 2003). For this, EB should involve
and Tikoo 2004). The employer, as a brand, represents an a more integrated internal mix, consisting of three groups:
intangible asset for a company. It refers to senior managers (1) the top management group—support, empowerment,
of the company and does not represent a single category of vision, leadership, and conducive environment, (2) the
employees (Martin et al. 2005). Moreover, EB is a business business processing group—staffing, process changes, and
philosophy in which all functions have a role to play incentive systems, and (3) the cross-functional group—HR,
(Minchington 2010). Because attraction and retention of corporate communication, and marketing (Ahmed et al.
talent have become a top priority, branding employment 2003). Studies suggest that the functions of marketing and
experience to current and prospective employees is HRM within a company need to work together strategically
imperative. EB manages the awareness and perceptions of for effective EB (Ambler and Barrow 1996; Barrow and
many stakeholders which can in turn facilitate recruitment, Mosley 2005; Edwards 2010; Moroko and Uncles 2008).
development, retention of employees, and employees’ This synergy can be accomplished with congruence com-
performance vis-à-vis company productivity (Sullivan munication about the product or service as well as corpo-
2004). rate and recruitment promotion (Moroko and Uncles 2008).
In creating an employer image, EB focuses on the func- Applying the segmentation-targeting-positioning (STP)
tional, economic, and psychological benefits of employment framework, EB can achieve its objectives by segmentation
and identification with the company (Ambler and Barrow on the basis of age, seniority, job type, employee lifecycle,
1996). To this end, interpersonal communications between tenure, and physical location (Moroko and Uncles 2009).
existing employees with prospective employees matter EB rightly aligns with the resource-based view, which
(Knox and Freeman 2006). In addition to communicating advocates that investing in human capital can result in
brand promises, EB involves long-term management of competitive advantage (Backhaus and Tikoo 2004). As per
employment experience (Backhaus and Tikoo 2004; Mosley the resource-based view, resources must be valuable, rare,
2007). Attributes that affect the employment experience are: imperfectly imitable, and poorly substitutable for sustain-
(1) employment, (2) company’s success, (3) construed able competitive advantage (Barney 1991). Everything can
external image, and (4) product/service characteristics be copied except the company’s unique talent capital.
(Maxwell and Knox 2009). The attractive attributes include a Businesses will live and die based on their ability to attract
complex array of employment experience features, including the right talent for the job (Leonard 2000). Also, EB pos-
financial reward packages, fulfilment of socio-emotional itively influences company profitability through increased
needs, and other tangible and intangible benefits (Edwards employee satisfaction, employee identification with the
2010). company (Schlager et al. 2011), awareness among various
The expectations of potential employees including fir- stakeholders (Sullivan 2004), customer satisfaction (Bar-
mographics and attractive components of a company row and Mosley 2005), and employee performance and

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commitment (Backhaus and Tikoo 2004; Edwards 2010; information about the job. This initial contact could happen
Gaddam 2008). during a presentation at a campus recruitment event or in
EB refers to managing employer–employee relationship. interview. Realistic job previews provide information about
It includes the employee’s employment experience right the job to potential applicants (O’Nell et al. 2001). As per
from the start of the relationship in order to facilitate the social exchange theory, a party which supplies benefits to
retention of talented workforce. Although past studies have another party, and the other party reciprocates (Blau 1964;
identified many antecedents and consequences of EB, Homans 1958). This implies that a candidate is ought to
empirical progress in this area is limited. The caveats are know the positive and negative aspects of the job for
delineated below. understanding the role he/she is about to take (O’Nell et al.
2001). These practices can reduce training and turnover
Constructs of EB costs by weeding out people who do not want the kind of
job that the company has to offer (Backhaus and Tikoo
The tri-components of EB include: (a) employer brand 2004; Wanous 1992).
equity, (b) brand loyalty and employee engagement, and Individuals are more attracted to a job presented with
(c) attraction and retention of talents. First, according to realistic previews than to a traditional recruitment message
marketing literature, ‘brand equity is a set of assets and (Coleman and Irving 1997). Also, employers make their
liabilities linked to a brand that add to or subtract from the company more compelling by communicating appropriate
value provided by the branded product or service to the and specific brand messages rather than general informa-
company and its customers’ (Aaker 1991). Employer brand tion to the recruitment market (Wilden et al. 2010).
equity is an intangible asset about the employer brand Because realistic job previews relate to lower levels of
association and employer brand awareness among existing attrition (Phillips 1998), employers need to provide real-
and potential employees (Ambler and Barrow 1996; istic job previews to talents so that no unrealistic expec-
Minchington 2010). Brand associations determine brand tations develop among them. A well-designed realistic job
image. Furthermore, employees’ level of knowledge about preview to potential employees enhances the EB.
the employer’s brand reflects employer brand awareness. Perceived organizational support represents employees’
Having strong employer brand equity adds more attrac- general perception regarding how a company values their
tiveness to the employer brand. Positive employer brand contributions and shows concerns for their well-being
equity provides a ‘‘differential advantage’’ over competi- (Eisenberger et al. 1997). When employees perceive that
tors in (a) attracting potential applicants, (b) encouraging the organization values their contributions and well-being,
employees to continue with the company, and (c) acquiring they feel obliged to reciprocate (CIPD 2011), demonstrate
talents at comparatively low prices (Ambler and Barrow higher performance, more innovation, and lower absen-
1996; Backhaus and Tikoo 2004). teeism and turnover (Eisenberger et al. 1997; Meyer and
Second, employer brand loyalty is a commitment that Allen 1997). When employees acknowledge that the
employees make to their employer (Backhaus and Tikoo company provides support to them, EB improves.
2004). The more employees are engaged, the strong is the Equity in reward administration implies, ‘the ratio of
attendance, thereby increasing profit per employee and the employee’s inputs to outputs is equal to the ratio of the
creating high return on investment (RoI). Highly engaged comparison person’s input to output’. Inputs are employ-
employees remain with the company for a long-time, and ees’ education, experience, effort, ability, responsibility,
the company thus maintains a low turnover rate. Third, seniority, gender, knowledge, and skills (Konopaske and
considering employees as customers and ‘employment Werner 2002). Outputs are pay, benefits, promotions, sta-
experience’ as the ‘product’ being offered for their con- tus, and recognition, (Konopaske and Werner 2002).
sideration and purchase, then ‘customer satisfaction’ would Equity theory (Adams 1963) suggests that employees
reflect the ‘strength’ of EB. EB, creating an ‘image’ of the perceive inequity when they compare their outcomes or
employer, attracts and retains talented people which are one rewards they receive, and they believe that they should
of the top ten non-financial performances of the company have received on the basis of comparison of a referent other
(Ernst and Young 2000). Companies with higher involve- (Adams 1965). This is in line with distributive justice
ment in EB are generally well managed and have employees theory suggesting that individuals compare their alloca-
who are motivated, continually learning, and growing. tions with that of a referent other and assess whether they
are inequitably overpaid or underpaid (Homans 1961).
Antecedents of EB Otherwise, equity exists. The theory pleads for equity in
reward allocation based on performance.
The first point of contact between an employee and Similar to the pricing of the services to customers,
employer occurs when the employee is provided with equity in reward provides a baseline for the brand. Lack of

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equity decreases employees’ performance, cooperation actions are not consistent with his/her publicly stated val-
among colleagues, and quality of work (Pfeffer and ues (Cha and Edmondson 2006).
Langton 1993). Companies having established EB use EB thus relates to leader’s philosophy. When we talk
equity in rewards to reveal the company culture to current about the TATA Group, we think of Ratan Tata, Infosys,
and potential employees (CIPD 2010). Employees always Narayanamurthy, and Apple, Steve Jobs. No amount of
prefer to work for a company in which they will be treated investment optimises the benefits of EB unless leaders
and rewarded fairly. In fact, paying the highest salary in themselves can deliver the EB promises and cascade them
markets may not increase retention, but being competitive throughout the company (Minchington 2005). Although an
and fair does (Taylor 2002).Thus, administering fair and EB strategy relies heavily on the HR department for its
appropriate rewards can enhance EB. shape and execution, EB propositions cannot be brought
Perceived organizational prestige results from many into reality without clear consent and proactive support
information sources, including reference groups’ opinions, from top leaders. Visible directions set by leaders are
words-of-mouth, public relations, external controlled important in showcasing the desired behaviours and culture
information, and internal communication regarding the to employees. Employees like to work for companies that
outsiders’ perception about the company (Smidts et al. have trusted, careful, and result-oriented leaders. Compa-
2001). According to social identity theory, an individual nies that try to encourage employees to understand and
has several self-identities depending upon his/her associa- engage with their EB will invariably fail if their leaders are
tion with the corresponding groups (Tajfel and Turner not actively living the brand themselves.
1986). Perceived organizational prestige is the social value Individual perceptions about the organization develop
assigned by employees to their identity with the employer. into psychological contracts (Delcampo 2007). These per-
Applicants’ perceptions about the prestige of the com- ceptions are not only expectations, but also implied
pany have symbolic benefits (Backhaus and Tikoo 2004). promises (Rousseau 1995). They include what employees
Employees’ unfavourable perception of the company expect from their employer, what is on offer, and what is
image can further their distress (Dutton et al. 1994), and actually delivered. Based on social exchange theory (Blau
they may leave the company. The higher the reputation of a 1964), psychological contract includes the unwritten
company, job seekers more favourably perceive the job beliefs held by the employee and the employer about what
attributes and feel a sense of pride in working for the each should offer the other as well as what each is obli-
company (Edwards 2010). gated to provide in the exchange relationship that operates
Higher quality leader–member exchange explains the between them (Rousseau 1995). Psychological contract
friendly working relationships between supervisors and obligation forms the basis of an employment offering and
subordinates typified by inter-personal trust and support adherence to it motivates employees to perform better
(Bauer and Green 1996; Liden and Graen 1980). Specifi- (Miles and Mangold 2004). Employees are the first to know
cally, managers who promote organizational trust foster whether a company is delivering on its brand promises.
(a) voluntary compliance of subordinates with their direc- When employees perceive a violation in the psychological
tives, (b) employee commitment towards organizational contract, negative consequences follow, such as reduced
goals, and (c) employee willingness to go the extra mile productivity, diminished loyalty, dysfunctional behaviour,
(Barney and Hansen 1994; Connell et al. 2003). Also, decreased trust, emotional exhaustion, job dissatisfaction,
external people always seek positions in a trustworthy and intention to quit (Robinson and Rousseau 1994;
company. Thus, organizational trust can enhance EB. Rousseau 1995). Thus, maintaining the psychological
The leadership at the top is a symbol for any company in contract obligation can promote EB.
managing reputation, and leaders’ actions are more Corporate social responsibility (CSR) includes com-
important symbolically than operationally (Davies and pany’s actions that benefit society beyond its own interests
Chun 2010). The leader acts as a major source of infor- (McWilliams and Siegel 2001). CSR involves a company’s
mation about the company to financial markets, media, commitment to ethical behaviour, economic development,
local/national government, customers, general public improvement in quality of life for employees, and the local
(Davies and Chun 2010), and to current and prospective community (Moir 2001). Engaging in CSR activities not
employees. Recently, the leader’s tasks and roles have only fulfils a company’s external obligations viz. regulatory
become more demanding due to accounting scandals (e.g. compliance and demands of various stakeholders, but also
Satyam scandal), stories of lavish perquisites, and pay serves own interests, such as competitive edge and favour-
hikes. Leaders often become a matter of gossip not only for able stock market performance (Klein and Dawar 2004).
employees but also for outsiders. Outsiders come to know CSR practices mould attitudes of surrounding commu-
about the leaders of the company from its employees. nities towards the company, enhance corporate reputation,
Employees quickly brand any leader as a hypocrite whose and attract job seekers (Albinger and Freeman 1996; Marin

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and Ruiz 2007; Turban and Greening 1997). Employees the marketing literature, this recognition is often termed as
also perceive greater congruence between themselves and ‘problem recognition’ through which one evaluates the dif-
the company when the company is highly involved in CSR ference between the desired state and the actual state. Market
activities. Hence, they seek positions in CSR active com- researchers use the concept in order to improve a particular
panies and avoid working for companies that harms the product. Problem recognition is otherwise finding the devi-
society. ation of the actual from an established benchmark. Managers
Based on above discussion, the following multi-part adopt strategies to minimise this deviation. It is important for
hypothesis is proposed, and a research question is raised. a company to first establish a benchmark. This enables the
company to understand their current state, adopt strategies
Hypothesis 1 (a) Realistic job previews to applicants,
for improvement, and do cost-benefit analysis. Thus, the
(b) perceived organizational support, (c) equity in reward
marked difference of existing state of antecedents from the
administration, (d) perceived organizational prestige,
desired state of antecedents of EB will adversely affect EB.
(e) organizational trust, (f) leadership of top management,
Accordingly,
(g) psychological contract obligation, and (h) corporate
social responsibility will positively associate with EB. Hypothesis 3 The greater the ‘perceived difference’
between the desired and existing values of EB antecedents,
Research Question 1 Which will be the most important
the lower EB will be.
antecedent of EB?
To sum up, as shown in Fig. 1, positive relationships are
Consequences of EB proposed between antecedents and EB, and negative asso-
ciations between difference between desired and actual
A study of EB policies in 100 top US companies reveals values of antecedents and EB. The study also aims to identify
that EB policies correlate not only with stable and highly the most important antecedent of EB. Furthermore, EB is
positive workforce attitudes (Fulmer et al. 2003) but also postulated to directly influence companies’ performance.
influence a company’s performance (Backhaus and Tikoo
2004; Moroko and Uncles 2008). A company’s perfor-
mance is its actual output as measured against its inputs. It Method
can be non-financial and financial. While non-financial
performance is subjective and qualitative, financial per- To test the hypotheses and answer the research questions, a
formance is objective, quantitative, and specific (Mishra questionnaire was administered in sample Indian companies.
and Suar 2010). Non-financial performance of EB can be
quantified using various HR parameters, viz. employee
Sample
satisfaction, numbers of quality applicants, average time to
fill positions, applicants’ conversion rate, turnover rate,
The CMIE-Prowess (2005) database and Bombay Stock
attrition statistics, and numbers of employee referrals. Non-
Exchange (BSE) companies’ directory enabled selection of
financial performance also includes managers’ perception
sample companies. Two criteria considered for inclusion of
of EB in terms of how it improves business results and
companies in the sample were (a) a minimum capital
quickly helps to fill vacant positions.
investment of 250 million (Indian rupees) and (b) a mini-
Return on talent is appropriate for assessing the financial
mum number of 100 employees.
impact of EB (Lowell 2007). However, none of the com-
One thousand companies were randomly selected in both
panies in India have recorded the ratio. Therefore, a sur-
the service and manufacturing industries. With prior consent
rogate measure for valuation can be return on assets
of company executives, the questionnaire was emailed to 500
(RoAs). Because EB is a long-term process, it is imperative
companies. After three reminders over a period of 3 months,
to consider the average RoAs for more than a year. A three-
only 42 (20.10 %) companies returned the completed ques-
year average is a suitable span of time for long-term pro-
tionnaires over e-mail. Thereafter, questionnaires were sent
cesses. Hence,
to another 300 companies by post with return envelopes
Hypothesis 2 The stronger the EB, the better will be the attached with postage, where the researchers either knew a
company’s (a) non-financial and (b) financial performance. contact person or referred one. This enabled to receive only
27 (12.92 %) complete questionnaires within a period of
Actual State Versus Desired State 4 months. Due to low return rate, the researcher personally
contacted 300 companies at their corporate head offices, both
In any business process, it is crucial to recognise desired state by taking prior appointments and without appointments.
in order to maximise the overall efficiency of a process. In This enabled to get complete questionnaires from 140

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 M. K. Biswas, D. Suar

1 Realistic e9 e10 e11

e1 job previews
1 1 1

Perceived Employer brand loyalty

1 Employer brand Attraction and
e2 organizational &
equity retention of talents
support employee engagement
e12
H1a+
1 Equity in 1
EB1 EB2 EB3
e3
reward administration H1b+

Non-financial performance
H1c+
1
Perceived
H3a+
e4 organizational
H1d+
prestige e13
Employer branding 1
H1e+
1 H3b+
Organizational
e5
trust H1f+
Financial performance
H1g+ 1
1 Leadership of
e6
top management H1h+

e14
Psychological
1
e7 contract
obligation

1
e8 Corporate social
responsibility

Fig. 1 Antecedents and consequences of EB for investigation

companies. The return rate of all questionnaires through 14.49 years (SD = 6.94), and the mean years of service in
e-mail, postal survey, and direct contact was 20.9 % current company were 7.82 (SD = 6.04). These demo-
(209 = 42 ? 27 ? 140) of the companies. The respondents graphics indicated that more mature employees responded
were assured of the anonymity of their responses plus they to the survey.
would receive the complete report of this research on request. Organization was the unit of sample. The sample had 90
Of the 209 companies, 347 executives responded to manufacturing and 119 service-oriented companies. Man-
the questionnaire during 2011–2012. Seventy-four com- ufacturing companies were identified based on their
panies each had the single respondent, 132 companies delivery of tangible material products and product-related
had two respondents, and three companies had three services; these included manufacturers of industrial and
respondents. Although the researchers sought to have consumer goods, publishing companies, and civil builders.
three respondents from each company, one or two Service-oriented companies included consultancies, insur-
executives from the companies were included because ance, higher education, banking, healthcare, and public
many senior managers declined to participate, and the services. Further analysis categorised 46 government-
agreed executives had (a) strategic or (b) strategic and owned and 163 private-owned companies. The respondents
operative roles (Table 1). were HR executives or marketing managers responsible for
Data were collected from 17 places of 10 states, out of branding the employment experiences of employees. They
35 states and union territories in India (Table 1). The held strategic decision-making roles, such as CEOs and
majority of the respondents were male executives general managers (29.1 %); operative roles, such as
(82.7 %), indicating low representation of women in senior recruiting officers and talent managers (19.6 %); or both
management positions in Indian and multinational com- strategic and operative roles (51.3 %), having lower posi-
panies. The mean total experience of all respondents was tions than general managers.

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Antecedents and Consequences of Employer Branding

Table 1 Sample profile talents’ include ‘‘Increases the attraction of the talents to
Characteristics Descriptive
the company’’ and ‘‘Stops talents from moving away to
statistics other organizations’’. The items assessing ‘employer brand
loyalty and employee engagement’ include ‘‘High recom-
Gender
mendation of the company for other people to join’’ and
Male (%) 287 (82.7) ‘‘Increases commitment and involvement of employees’’.
Female (%) 60 (17.3) Response categories for each item were on a five-point
Total experience (M (SD)) 14.49 (6.93) Likert scale ranging from ‘strongly agree’ (5) to ‘strongly
Years of service in the present company (M (SD)) 7.82 (6.04) disagree’ (1).
Sector (N (%))
Manufacturing 90 (43.1) Antecedents of EB
Service 119 (56.9)
Ownership (N (%)) Perceptions regarding the realistic job previews were
Public 46 (22.0) assessed developing a five-item scale from Champnoise
Private 163 (78.0) and Masternak (2004). The sample items include ‘‘Real-
Regions (N (%)) istic information about the job in job advertisements/
East 78 (37.3) recruitment message’’ and ‘‘Communication of both
South 41 (19.6) favourable and unfavourable information about the job at
West 34 (16.3) the recruitment stage’’.
North 56 (26.8) An eight-item scale was adapted from Eisenberger et al.
Management levels (2001) to measure perceived organizational support. The
Strategic 101 (29.1) scale had two reverse keyed items. Sample items include
Strategic and operative 178 (51.3) ‘‘Company values employees’ contribution to the well-being
Operative 68 (19.6) of the company’’ and ‘‘Company cares about employees’
well-being’’.
Five items drawn from CIPD’s reward survey (2009)
Measures assessed equity in reward administration. The sample
items include ‘‘Pay needs to be at the right level to ensure
The questionnaire sought responses to socio-demographic that people want to come to work for the company’’ and
variables, constructs of EB, and antecedents and conse- ‘‘Performance-based compensation’’.
quences of EB. To suit the Indian business realities, item Ten items were adapted from Mael and Ashforth’s study
wordings were changed after pre-testing of the question- (1992) to measure perceived organizational prestige.
naire in 10 companies. The seven-page survey instrument Sample items include ‘‘Employees of this organization are
contained 104 items. As shown in the conceptual model, 94 highly sought after by other organizations while recruit-
items measured the 12 constructs (except financial perfor- ing’’ and ‘‘Potential employees’ perception of getting
mance), and the remaining 10 items assessed the company social approval if they join the organization’’.
profile and the respondent profile. To explore the gaps The five-item scale of Paine (2003) measured organiza-
between the desired and actual value of dimensions influ- tional trust that included integrity, dependability, openness,
encing EB, respondents inserted the desired score (impor- honesty, and concern for employees. Sample items include
tance) in the blank space on the left-hand side and the ‘‘Employees’ perception of employer as having high integ-
actual score on the right-hand side of each item. The dif- rity’’ and ‘‘Employer being open and upfront with employees’’.
ference between the desired score and the actual score Leadership of top management was measured by an
assessed the gap in antecedents of EB. 11-item scale derived from Minchington (2010) with a
reverse keyed item. Sample items include ‘‘Leadership
Constructs of EB behaviour matching employees’ expectations’’ and
‘‘Leaders having a good understanding of global markets’’.
Twenty one items were developed to assess the three Nine items were adapted from the study of Roehling
dimensions of EB (Ambler and Barrow 1996; Backhaus et al. (2000) to assess the employer’s obligations towards
and Tikoo 2004). Sample items measuring ‘employer employees in maintaining psychological contract. Sample
brand equity’ include ‘‘Increases the awareness of the items include ‘‘Concerns for employee personal welfare’’
company’s presence among potential employees’’ and and ‘‘Open, honest, two-way communication’’.
‘‘Company gets high preference in initial slots in campus Fourteen items were adapted from the earlier developed
placements’’. Items measuring ‘attraction and retention of scale of Mishra and Suar (2010) to assess corporate social

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 M. K. Biswas, D. Suar

responsibility towards stakeholders. Sample items include All constructs had adequate internal consistency (Cronbach
‘‘Equal employment opportunity action plan’’ and ‘‘Help- alpha), greater than 0.70 (Nunnally 1978) except ‘realistic
ing the community through charitable donation, contribu- job previews’, which had an alpha of 0.65 (Table 2).
tions for educational and cultural activities’’. Nonetheless, this value remained above 0.60, the recom-
Respondents indicated the ‘desired value’ for each item mended cut-off value for social science research (Peter
on a five-point Likert scale ranging from ‘highly essential’ 1979).
(4) to ‘not at all essential’ (0). Similarly, they indicated the The unidimensionality of constructs was tested using
‘actual value’ for each item ranging from ‘excellent (best confirmatory factor analysis (CFA). Items having stand-
among industries)’ (4) to ‘basically non-existent’ (0). ardised loadings \0.35 were dropped to eliminate the
poorly performing items. Accordingly, four items were
Consequences of EB eliminated. The remaining items were loaded on their
respective constructs.
Primary data were collected using a five-item scale Table 2 reports the minimum and maximum standard-
developed to assess non-financial performance. Sample ised loading, the standardised range of regression weights,
items include ‘‘Employer branding improves business the relative Chi-square (v2/df), Goodness of Fit Index
results’’ and ‘‘Employer branding increases employees’ (GFI), Comparative Fit Index (CFI), Tucker–Lewis Index
performance in the workplace’’. Responses for each item (TLI), and Root Mean Square Error of Approximation
on a five-point Likert scale varied from ‘strongly agree’ (5) (RMSEA). The CFA results indicated that factor loadings
to ‘strongly disagree’ (1). of reflective indicators on the constructs were significant at
This study relied upon secondary data for financial per- 0.001. Models with GFI, CFI, and TLI values greater than
formance of the sampled companies from the CMIE-Prow- 0.90 and RMSEA values less than or equal to 0.08 were
ess database (Prowess 2005) as well as from the companies’ acceptable. The minimum of each model was achieved.
balance sheets. The researchers considered the average The relative Chi-square was below the cut-off value of 5,
RoAs from 2009–2010 to 2012–2013 and found that they and the fit indices were all above 0.90. The RMSEA were
varied greatly. Thus, 3 years of RoAs were averaged in order less than 0.08, and only four constructs had a RMSEA of
to ascertain the companies’ financial performance. 0.09. Average variance extracted (AVE) was calculated
adding the squared standardised factor loadings of items of
Reliability and Validity a variable and dividing that by the number of items. AVE
greater than 0.50 indicates the convergent validity (Fornell
Prior to analysing the data, reliability and validity were and Larcker 1981). All constructs had convergent validity
estimated to assess the appropriateness of the constructs. including the three variables of EB except perceived

Table 2 Reliability and validity of constructs

Variable No. of No. of Cronbach’s v2/df GFI TLI CFI RMSEA Standardised Average
original items a loadings variance
items retained extracted
(Min.) (Max.)

1. Employer branding
(a) Employer brand equity 6 6 0.93 2.95 0.98 0.98 0.99 0.09 0.71 0.96 0.72
(b) Attraction and retention 7 7 0.89 3.09 0.97 0.96 0.98 0.08 0.63 0.85 0.59
of talents
(c) Employer brand loyalty 8 8 0.91 4.04 0.95 0.94 0.98 0.09 0.58 0.90 0.63
and employee engagement
2. Realistic job previews 5 5 0.65 2.43 0.99 0.94 0.97 0.06 0.56 0.84 0.52
3. Perceived organizational support 8 8 0.71 2.62 0.98 0.96 0.99 0.07 0.44 0.95 0.50
4. Equity in reward administration 5 4 0.76 2.40 0.99 0.98 0.99 0.06 0.52 0.83 0.54
5. Perceived organizational prestige 10 10 0.81 2.98 0.94 0.91 0.96 0.09 0.35 0.70 0.29
6. Organizational trust 5 5 0.79 4.57 0.99 0.95 0.99 0.09 0.42 0.93 0.53
7. Leadership of top management 11 10 0.77 2.62 0.97 0.93 0.97 0.07 0.40 0.98 0.56
8. Psychological contract obligation 9 7 0.74 2.49 0.99 0.96 0.99 0.07 0.46 1.03 0.50
9. Corporate social responsibility 14 14 0.75 2.89 0.94 0.91 0.95 0.07 0.41 0.69 0.30
10. Non-financial performance 5 5 0.87 5.13 0.99 0.97 0.99 0.09 0.61 0.88 0.61

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Antecedents and Consequences of Employer Branding

organizational prestige and corporate social responsibility. job previews and leadership of top management (r = 0.88).
The items to capture the latter two constructs had face/ Therefore, the independent variables were decompressed
content validity and high internal reliability. The additive and put in three models to predict EB. The control variables
scores of items in each construct were divided by the and EB’s relationship to companies’ non-financial and
number of items to keep the value within the range of the financial performance were intact in three models. By doing
response scale. so, the independent variables were moderately correlated.
The first model with control variables included the
explanatory variables of realistic job previews, perceived
Results organizational support, equity in reward administration, and
perceived organizational prestige to predict EB. Similarly,
Table 3 shows the descriptive statistics and the Pearson the second model with control variables included the
correlations among variables. Evidence suggested that explanatory variables of organizational trust and leadership
service industries require more involvement in EB (CIPD of top management, and still the third model with control
2007). Hence, the confounding effects of industry type variables included psychological contract obligation and
(manufacturing and service) and ownership (government- corporate social responsibility. Each variable was concep-
owned and private-owned) were removed statistically tually different from others; therefore, clubbing or deleting
before examining the hypothesised relationships. The variables were not done. In all models, the path coefficients
control variables of industry type (manufacturing = 0, from EB to non-financial and financial performance of
service = 1) and ownership (public = 0, private = 0) companies were identical and so the loadings of three
were treated as dummy variables. exogenous constructs on EB (Table 4).
The zero-order correlations revealed that the controlled In the first model, public sector units had more EB than
variables of ownership and industry type did not influence private sectors, while service sector had more EB than
EB. All of the independent variables of realistic job pre- manufacturing sector, when the effects of realistic job
views, perceived organizational support, equity in reward previews, perceived organizational support, equity in
administration, perceived organizational prestige, organi- reward administration, and perceived organizational pres-
zational trust, leadership of top management, psychological tige were partialled out. Whatever effects ownership and
contract obligation, and corporate social responsibility type of industry had, when those were controlled, realistic
positively correlated to the dimensions of EB, including job previews, perceived organizational support, equity in
employer brand equity, attraction and retention of talent, reward administration, and perceived organizational pres-
and employer brand loyalty and employee engagement. tige positively predicted EB. These finding supported four
The three dimensions of EB were positively related with parts of the first hypothesis.
one another. All the dimensions of EB were positively In the second and third models, ownership and type of
associated with non-financial performance of the compa- industry had no significant influence on EB. When their
nies. The variability of financial performance was high, effects were controlled, in the second model, organiza-
even greater than the mean; therefore, the values of this tional trust and leadership of top management were posi-
variable were standardised, and the standardised values tively associated with EB. Similarly, in the third model
were positively associated with the dimensions of EB. when the effects of ownership and type of industry were
Although the correlations were in hypothesised direc- controlled, psychological contract obligations and corpo-
tions, they did not reveal antecedent–consequent relation- rate social responsibility positively predicted EB. In gist,
ships. For the latent construct of EB, there were eight these findings supported the multi-part first hypothesis.
antecedents, and again EB was the antecedent for compa- There were direct paths from antecedents to EB. Therefore,
nies’ non-financial and financial performance. To test such the weights of the standardised path coefficients were com-
relationships, a hybrid path analysis of structural equation pared to determine the most important predictor of EB. It can
modelling (SEM) was carried out with 15 observed vari- be seen from the standardised path coefficients in Table 4 that
ables and one latent construct using AMOS 16.0. The data leadership of top management was the most important pre-
of individuals were averaged for each company. Because dictor of EB followed by corporate social responsibility and
there was wide variability in values of financial perfor- perceived organizational prestige. Such evidence provided an
mance, the standardised values of RoAs were entered for affirmative reply to the research question.
analysis. Supporting the second hypothesis, the paths from EB to
During full model testing, it was observed that two of the non-financial and financial performance were positive,
independent variables, organizational trust and leadership suggesting that higher the EB, better the non-financial and
of top management, had an inverse association with EB. financial performance of companies (Table 4). These path
Furthermore, there was multicollinearity between realistic coefficients remained constant across the three models.

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Table 3 Descriptive statistics and Pearson correlation among studied variables
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

1. Ownership 1
2. Industry type .21** 1
3. Employer brand equity -0.07 0.01 1
4. Attraction and -0.00 0.01 0.87*** 1
retention of talents
5. Employer brand -0.01 0.04 0.89*** 0.88*** 1
loyalty and employee
engagement
6. Realistic job previews -0.01 0.03 0.63*** 0.59*** 0.65*** 1
7. Perceived 0.11 -0.05 0.55*** 0.63*** 0.63*** 0.49*** 1
organizational support
8. Equity in reward 0.11 0.10 0.47*** 0.51*** 0.60*** 0.66*** 0.41*** 1
administration
9. Perceived 0.03 -0.15* 0.62*** 0.61*** 0.61*** 0.40*** 0.53*** 0.34*** 1
organizational prestige
10. Organizational trust -0.03 -0.14* 0.50*** 0.53*** 0.37*** 0.33*** 0.53*** 0.11 0.54*** 1
11. Leadership of top 0.01 -0.03 0.65*** 0.63*** 0.64*** 0.88*** 0.52**** 0.59*** 0.60*** 0.44*** 1
management
12. Psychological 0.00 0.01 0.29*** 0.31*** 0.41*** 0.57*** 0.41*** 0.65*** 0.24*** 0.12 0.46*** 1
contract obligation
13. Corporate social -0.13 -0.16* 0.39*** 0.52*** 0.33*** 0.34*** 0.48*** 0.26*** 0.53*** 0.63*** 0.44*** 0.24*** 1
responsibility
14. Non-financial -0.08 -0.07 0.87*** 0.83*** 0.86*** 0.65*** 0.52*** 0.60*** 0.61*** 0.37*** 0.68*** .37*** 0.36*** 1
performance
15. Financial -0.01 -0.07 0.11 0.11 0.11 0.05 0.09 0.03* 0.04 0.09 0.04 -0.08 0.07 0.06 1
performance (RoAs)
16. Standardised RoAs -0.03 -0.07 0.16* 0.15* 0.16* 0.08 0.14* 0.04 0.06 0.09 0.09 -0.06 0.05 0.13* 0.69*** 1
M 0.78 0.57 3.26 3.31 3.30 2.63 2.68 2.75 2.85 2.67 2.73 2.74 2.91 3.49 3.61 0
SD 0.41 0.50 0.70 0.60 0.54 0.28 0.31 0.40 0.34 0.30 0.24 0.29 0.27 0.61 15.51 1.0
* p \ 0.05. ** p \ 0.01. *** p \ 0.001
M. K. Biswas, D. Suar
Antecedents and Consequences of Employer Branding

Table 4 Relationships among antecedents, EB, and consequences

Model Paths UE SEB SE CR p Inference

1 EB / ownership -0.17 0.07 -0.11 -2.59 0.01

EB / industry type 0.11 0.06 0.08 1.96 0.05
EB / RJP 0.68 0.14 0.28 4.87 0.001 Supported H1a
EB / POS 0.49 0.11 0.23 4.55 0.001 Supported H1b
EB / ERA 0.29 0.09 0.18 3.18 0.001 Supported H1c
EB / POP 0.72 0.10 0.37 7.45 0.001 Supported H1d
2 EB / ownership -0.09 0.08 -0.06 -1.16 0.25
EB / industry type 0.11 0.07 0.09 1.61 0.11
EB / OT 0.49 0.12 0.24 3.99 0.001 Supported H1e
EB / LTM 0.67 0.16 0.63 10.52 0.001 Supported H1f
3 EB / ownership -0.02 0.10 -0.01 -0.15 0.88
EB / industry type 0.11 0.08 0.08 1.25 0.21
EB / PCO 0.63 0.14 0.29 4.44 0.001 Supported H1g
EB / CSR 0.88 0.16 0.37 5.58 0.001 Supported H1h
Performance EB ? NFP 0.85 0.04 0.92 24.46 0.001 Supported H2a
EB ? FP 0.17 0.07 0.16 2.28 0.02 Supported H2a
EB EBE ? EB 1.0 – 0.94 – –
ART ? EB 0.85 0.03 0.92 25.13 0.001
EBLEE ? EB 0.79 0.03 0.95 28.35 0.001
UE un-standardised estimate, SEB standard error of beta, SE standardised estimate, RJP realistic job preview, POS perceived organizational
support, ERA equity in reward administration, POP perceived organizational prestige, OT organizational trust, LTM leadership of top man-
agement, PCO psychological contract obligation, CSR corporate social responsibility, NFP non-financial performance, FP financial performance,
EBE employer brand equity, ART attraction and retention of talents, EBLEE employer brand loyalty and employee engagement

It needs mention that the three variables of EB loaded value, the lower was the EB. As the antecedents deviated
significantly on EB. For each variable, the standardised from ideal values, EB decreased. These findings supported
loading was more than .90 suggesting that three variables the third hypothesis (Table 6). All the models had
of EB had high convergent validity. acceptable fit indices (CFI, GFI, NFI [0.90; v2/df \ 5).
All the three models had acceptable fit indices. The
relative Chi-square was less than 5; the CFI, the GFI, and
the NFI were above 0.90, and the RMSEA varied from 0.09 Discussion
to 0.13, beyond cut-off range of B0.08 (Table 5).
To test the second hypothesis, ‘‘distance from desired Surveying 209 companies in manufacturing and service
value’’ (DFDV) for each antecedent was estimated in order sectors in India, this study provides an understanding of the
to gauge the association between the perceived reality gap antecedents and consequences of EB. It also examines
of antecedents and EB. Mathematically, the Euclidean whether the reality gap of antecedents influences EB.
distance was calculated between the mean score of desired Contrary to belief that EB is more relevant in service
value and actual value for each antecedent of EB. sectors (CIPD 2007; Knox and Freeman 2006); ownership
P
DFDVi = (Xid - Xia)2, where Xid and Xia are the mean and industry type occasionally influence EB. Controlling
desired score and mean actual score, respectively the effects of ownership and industry type, increased
(i = 209). The response scale was different for desired realistic job previews, perceived organizational support,
value and actual value. Therefore, the difference between equity in reward administration, perceived organizational
the mean desired score and the mean actual score of studied
companies on each antecedent of EB was standardised
Table 5 Fit indices of models
[STD = (score - M)/SD]. EB was the outcome variable,
and DFDVi was the explanatory variable (Table 6). Model v2/df CFI GFI NFI RMSEA
Structural regressions for each antecedent were carried out
1 2.83 0.96 0.92 0.93 0.09
separately because the impact of the difference between the
2 3.52 0.95 0.92 0.93 0.11
desired and actual score on EB was tested. The higher the
3 4.61 0.92 0.90 0.90 0.13
difference in actual value of antecedents from the desired

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Table 6 Difference between Paths UE SEB SE CR p Inference

desired and actual values of
antecedents influencing EB EB / DFDV(RJP) -0.27 0.04 -0.41 -6.32 0.001 Supported H3a
EB / DFDV(POS) -0.18 0.04 -0.27 -4.06 0.001 Supported H3b
EB / DFDV(ERA) -0.34 0.04 -0.51 -8.27 0.001 Supported H3c
EB / DFDV(POP) -0.39 0.03 -0.59 -9.93 0.001 Supported H3d
EB / DFDV(OT) -0.28 0.04 -0.42 -6.38 0.001 Supported H3e
EB / DFDV(LTM) -0.28 0.04 -0.42 -6.48 0.001 Supported H3f
EB / DFDV(PCO) -0.22 0.04 -0.34 -5.02 0.001 Supported H3g
EB / DFDV(CSR) -0.23 0.04 -0.35 -5.22 0.001 Supported H3h

prestige, organizational trust, leadership of top manage- their employees’ contributions and caring about their well-
ment, psychological contract obligation, and corporate being. The findings are in line with earlier studies where
social responsibility increased EB. Leadership of top perceived organizational support positively associated with
management is the most potent, positive predictor of EB. lower absenteeism and higher performance (Eisenberger
Furthermore, as the antecedents deviate from their desired et al. 1986). The Mumbai terror attack on Taj Hotel saw the
values, EB decreases. EB furthers the non-financial and support of TATA’s top management towards each of its
financial performance of companies. employees. This led TATA employees to believe that their
company will always support, which is even extended to
Conceptualisation of EB outsiders as well.
Talented employees are more likely to leave if treated
EB is reflected in high scores on employer brand equity, unfairly or if the reward is not administered with fairness
employer brand loyalty and employee engagement, and (Allen et al. 2003). Practitioners adopt strategies, such as
attraction and retention of talents. The results reveal that linking employee performance to business goals, defining
although they are different constructs, they are interrelated. employee performance, assessing employee growth, pro-
Employer brand equity affects EB activity by creating viding results-based incentives, and using transparent per-
knowledge of the company among potential and existing formance appraisal tools. Therefore, companies should
employees (Backhaus and Tikoo 2004). Furthermore, these focus on fair rewards and benefits, rather than only on
findings corroborate with earlier studies that EB assists in salary.
retention of talent. The more the attraction of employees Symbolic benefits (prestige of the company) do increase
towards a company, the higher is the employer brand. when functional benefits (salary, holidays, leave allow-
Moreover, low attrition indicates employees’ willingness to ance) are similar to those offered by competing employers
continue their service in the company and thus more is the (Lievens and Highhouse 2003). Competing employers
EB. Therefore, we conceptualise attraction and retention of include those who require similar kinds of employees with
talent as necessary components for EB. Finally, marketing the same sets of skills and attributes. Employees eagerly
literature considers loyalty towards the brand to ascertain identify with companies that are positively evaluated by
the impact of a brand; employees’ loyalty to the employer outsiders (Bhattacharya et al. 1995). This fact pushes
also impacts EB (Backhaus and Tikoo 2004) and promotes management to create a positive perception of the company
employee engagement and employee productivity. image among employees by means of external and internal
communication for EB.
Antecedents and EB Caution should be employed regarding the view that
employees who are more trusting in nature tend to trust their
First, this study establishes the positive influence of real- employer more (Searle et al. 2011). Focus should be on the
istic job preview on EB that encapsulates awareness, interpersonal aspects between employees and management
attraction, loyalty, and engagement. Realistic job previews (Child and Rodrigues 2004). HR practices of information
for prospective employees create awareness of the job and sharing, employee participation, fair performance manage-
help retain employees in long-run (Phillips 1998). No ment, and training can increase employees’ trust towards the
company wants to lose employees handling important employer and help creating a branded company.
business assignments or incur high costs in finding a This study confirms that companies’ fulfilling their psy-
replacement. Companies can use realistic job previews in a chological contract enhances their brand among talents
variety of formats, including videos, advertisements, pre- (Backhaus and Tikoo 2004; Moroko and Uncles 2008). The
sentations, and brochures. Employers gain from valuing employers’ obligations include training, career opportunities,

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Antecedents and Consequences of Employer Branding

personal growth, and development of employees to promote while top management leaders play a crucial role in the
the brand. implementation of EB, they need to narrow the gap between
CSR provides intangible benefits to the company that the desired state and actual state of the antecedents of EB in
cannot be replicable including corporate image, status, order to continuously improve EB. Third, practitioners can
fame, and trust, thereby providing competitive edge periodically assess the impact of EB practices on company
(Mishra and Suar 2010). Although literatures on CSR performance to ascertain value of EB.
suggest that it is a separate activity, this study affirms it as
an important antecedent of EB. Hence, management can Conclusions
see CSR initiatives and EB strategy from the reputational
perspective; CSR contributes to employee motivation by Based on these findings, EB is the branding of employment
fulfilling an obligation for the greater good of the society. experience, as informed by various HRM and OB practices.
Top management leadership emerged as the most A proactive strategy towards EB indicates a company’s
important predictor of EB. Leaders set visible directions genuine interest in maintaining its talented workforce in
towards appropriate EB (Minchington 2010). Company addition to attracting talents from the employment market for
leaders taking keen interest in EB help them obtaining the competitive edge. A company with an upbeat employee
talent, they need for the business. Further, employees strategy will design its policies and practices for the better-
identify with a company more through its leaders’ actions ment of employees and thus place more emphasis on EB to
than through formal corporate messages and internal mar- boost the performance.
keting (Martin 2009), indicating that leaders play a crucial
role in creating a company’s image. This study confirms Future Research
the value of leaders’ efforts to craft organizational images
and acknowledges that these images affect external stake- First, although leadership is the most important antecedent
holders’ perceptions of the company. Leaders’ vision, of EB, it may differ in other cultures that need investiga-
action, attitude, charisma, knowledge, and performance all tion. Second, a comparative study of potential and existing
influence EB. Rightly, leaders are seen as employers, and managers may provide insight into the congruence or dis-
they are the most appropriate indicator of employer brand. sonance in perceptions of EB. Lastly, although a positive
The actual value of an antecedent of EB should remain influence of EB on financial performance is observed here,
in close proximity to its desired value for effective EB. future research capturing return on talents can showcase it
Companies should first determine desired values for the as an important consequence of EB.
possible antecedents and then compare them with the
actual value. Thereafter, managers can devise strategies to Limitations
bridge these gaps to promote EB.
First, it is difficult to eliminate the socially desirable
Consequences of EB responding from self-reported responses. Also, because the
study relied on cross-sectional data, strong causal conclu-
A business phenomenon is always scrutinised through the sions cannot be inferred. In addition, the critical anteced-
lens of profitability. Therefore, management is likely to ents of EB identified here are not exhaustive rather
have an eye on financial impact of EB. Unlike earlier indicative. Because employment experience is affected at
studies, this research establishes the positive impact of EB various levels—personal, interpersonal, and organizational
on RoAs. Corroborating earlier findings regarding the levels—there can be more factors influencing EB.
consequences of EB on non-financial outcomes (Backhaus Notwithstanding its limitations, while data on RoAs were
and Tikoo 2004; Engelund and Buchhave 2009), this study collected from CMIE database, data on other variables were
reaffirms that EB lowers recruitment costs, attracts more collected from branding experts of companies. Hence, the
qualified applicants, and lowers employee turnover. common method bias was arrested. Moreover, the study has
investigated EB by adopting practitioners’ perceptions
Implications while remained grounded on academic theories. It presents
a model that companies can use to promote their EB.
First, findings suggest that employers should make the job
previews more realistic, oblige the psychological contract,
provide support, maintain trust and equity in reward References
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