284 Corporate Reputations, Branding and People Management employees are made aware of on a daily basis. It is also sufficiently detailed in expressing what happens when things go wrong, so that cus- tomers and employees know what to expect and how to behave. Employees, for example, are asked to deliver ‘positively outrageous service’ in fulfilling the mission and brand promise. Communication is at the heart of Southwest Airlines’ strategy. Their ‘people department’ (not HR department) use the recruitment and selec- tion process to recruit ‘team players’ whose values and attitudes fit the brand; they also use the human resource development process to clarify and reinforce the values, culture and ‘Southwest Spirit’, using a range of media such as ‘Keeping the Spirit Alive’ videos and other collateral. The performance management and rewards systems are also used to communicate the brand through incentive pay, including stock options and profit sharing. Interestingly, by linking pay directly to flights, they ensure pilots understand the need for cost efficiency. Pfeffer (2005) reported that Southwest Airlines have by far the lowest costs per mile of any comparable airline in the world because pilots have a clear line of sight between how they fly the plane, where they park it, customer service and profitability. Finally, the company is prominent in using the public relations media to communicate to employees the importance of the mission, and by entering nearly every competition available that reinforces the message of people driving customer service (e.g. Top Performing companies awards, Fortune’s most admired companies, most socially responsible company awards etc.). It is also noted for its advertising to potential employees (and customers) through its ‘Southwest is a symbol of Free- dom’ campaign, which is translated into eight individual freedoms for employees, including learning and growth, to be themselves, etc. In addition to formal communications, Southwest recognize the importance of informal communications between employees, managers, colleagues and customers. How employees act and talk about the company helps create its culture, which is made more formal through its Culture Committee structure. These committees operate in each Southwest location to examine the problems of culture management and develop solutions. Like many US companies, Southwest has an ‘open- door policy’ to enable rapid communications between managers and the workforce, which sits alongside the more formal union–management bargaining structures. Employees are also invited and expected to share letters from customers about good and bad service, and to provide Chapter 8 Corporate communications and the employment relationship 285 solutions where required. However, as Miles and Mangold point out, these solutions are not expected to be delivered at the expense of employees’ freedoms. According to Miles and Mangold, an employee’s psyche is where the knowledge and willingness to project a brand image resides, which Southwest recognize in their use of a covenant between the company and its employees. This covenant (similar to our use of the psycho- logical contract) provides a clear understanding of what employees can expect and what is expected from them. The extent to which there has been a delivery on the ‘deal’ from the employees’ perspective is deter- mined not only through the appraisal systems, but through informal conversations and lunches with the CEO, Colleen Barrett, for ran- domly selected employees. The employee brand image – the image that employees project to other employees and potential recruits – is determined by communi- cating the brand image consistently and frequently to all employees using the methods previously outlined. Second, Southwest makes every attempt to deliver its covenant to employees. All communications, for- mal and informal, are expected to be ‘on-brand’ to align the employee brand with the desired brand image, both of which stem from the mis- sion and values of putting people first. Source: Based on Miles and Mangold, 2005; Pfeffer, 2005 From the consultancy sector, among the most insightful con- tributions to the field is by Simon Barrow and Richard Mosley (2005), directors of People in Business. They have been cred- ited with inventing the term ‘employer branding’ and have long experience in applying marketing expertise to HR. The core proposition of their approach is the integrated brand model, which closely resembles the one by Gary Davies and his colleagues on reputation management (see Chapter 2). Figure 8.3 offers a summary of their ideas. Employer brand positioning, according to Barrow and Mosley, depends on creating a realistic analysis of the external and internal brand propositions, only aligning them if there is a broad agreement between the two through a core proposition. Reflecting what we have discussed so far, they argue credibility is at the heart of all good external and internal communications, but the messages also have to be aspirational, embracing a distinctive focal point and ‘big idea’. And, following our initial discussion of old versus new communications and sustainable corporate stories, they have to be consistent and enduring throughout. Also reflecting our discussions of new developments in strate- gic HR architectures and workforce segmentation, they advo- cate targeting customer and employer brand propositions for different audiences (see Figure 8.4). One of the main argu- ments for doing so is to strike a balance between conformity and diversity; between fitting people to values and fitting values to people. This is the same argument raised in Chapter 6 in our discussion of segmenting by lifestyles, exemplified in the Tesco case. So while it is necessary to define the overall position of an employer brand, it is also necessary to build in flexibility into the workforce by having distinctive employee value propositions for different types of employees with customized messages and packages for each career segment. 286 Corporate Reputations, Branding and People Management The brand people purchase The brand people work for Customer brand proposition CORE PROPOSITION Employer brand proposition Benefits Differentiators Reasons to believe Common focal point Mission, values and character Benefits Differentiators Reasons to believe Shaping a positive brand experience to capture and retain customers, and drive brand advocacy Ensuring brand integrity Shaping a positive brand experience to attract and retain talent, and drive brand advocacy Figure 8.3 An integrated brand model (adapted from Barrow and Mosley, 2005, p. 111). The example they use to illustrate this customization is drawn from the Microsoft website, which has distinct employee value propositions for each career group, though all reflect the core employer brand logo ‘realize your potential’ (http://www. microsoft.com/uk/careers/peoplefirst.mspx). You might want to explore this site to understand how employee value propos- itions work in practice. What might happen if the balance between conformity (to the corporate message) and diversity (in fitting employer value propositions to the needs of the busi- ness) is illustrated in the little example in Box 8.5 concerning talent management in the British Army. Chapter 8 Corporate communications and the employment relationship 287 Specific customer and employer brand propositions Definitions of target audience Novel, compelling and credible value propositions Benefits: why each should choose and advocate the brand Different employee segments Different customer segments Figure 8.4 Employee value propositions and segmentation (based on Barrow and Mosley, 2005). Box 8.5 Talent management in the British Army Consider this example from the British military, which provides evidence of a potential problem in striking a balance between a strong corporate message and targeted employee value propositions. In 2004 the UK Ministry of Defence and Army chiefs announced their intentions to rationalize the British Army for operational reasons to turn it into a 288 Corporate Reputations, Branding and People Management more streamlined fighting force. In doing so, they proposed a merger of a number of regiments that had a long and distinguished history. These included merging a number of well-known Scottish Regiments, which had formed a significant part of Britain’s fighting force for two centuries and which would form the largest single regiment in the British Army. Supporters of these regiments, including many existing and former officers and Scottish politicians, put up spirited resistance to the pro- posed mergers, at one point describing them as an ‘act of lunacy’. Part of their argument was based on the strong emotional ties between these regiments and the regions that they were drawn from, which formed their traditional recruiting grounds. They argued that the strong family ties between these regiments and the local region would be damaged irreparably. Despite these arguments, the Scottish regiments were merged to form the Royal Regiment of Scotland. In October 2005, however, the news media broadcast a story, based on research, which showed recruitment to the army in Scotland was at dangerously low levels, some 10% below target and 18% lower than in previous years. These poor recruitment figures were forecast to have an important impact on the fighting potential of the British Army at a period when it was being called on to support a number of conflicts in different parts of the world, including Iraq and Afghanistan. One Scottish politician summarized the argument against the merger: What the Government and defence chiefs fail to appreciate is that there is no affinity nor goodwill towards the Royal Regiment of Scotland from the people of Scotland – that is amply demonstrated with the collapse in recruiting … (Peter Duncan, MSP, quoted in the Dundee Courier, 2 November 2005) Army officials were beginning to recognize that these historically low levels of new recruits in Scotland could be attributed in part to the fail- ure to attract young people from the traditional regional recruiting grounds. They also believed it was due to other reasons connected with image, including an unpopular war in Iraq, poor image of the British generally following well-publicized incidences of bullying and mysteri- ous deaths at Deepcut Barracks, and competition from private sector security companies that have been ‘poaching’ SAS, Marines and Special Forces troops with offers of much higher pay. Their response has been to create a 147-strong recruiting team, with its headquarters in central Scotland, to mount a ‘charm offensive’. Employer brand equity Creating employers brands requires organizations to make esti- mates of how successful they have been, just as they would in creating customer brands. In Chapter 2, we explained how understanding strong brands requires a measure of relative value and used the ideas of brand equity to identify the poten- tial of a brand to add value. We can apply this idea to measur- ing the relative employer brand equity comprising four similar components. Measuring brand equity in this way can provide evidence of how deeply embedded and sustainable the corpor- ate story is in the organization (see Table 8.3). Chapter 8 Corporate communications and the employment relationship 289 Table 8.3 Measuring employer brand equity. Components What is it? Creates value by: Perceptions of An emotional link Reducing costs of psychological between the brand and gaining new contract and employees that cause employees engagement them to be attracted Creating brand to and remain with ‘ambassadors’ the organization Gives breathing space when the organization is undergoing change Awareness of Employees and Potential employees Employer brand propositions potential employees’ prefer the brand equity familiarity with brand familiar/well-known over the unknown Enables people to compose a quick mental shortlist of potential employers Perceived quality Assessment of People more likely to of the employer expected quality work for an brand that an employer organization they brand will deliver believe to be of higher quality and recommend to others Launch-pad for (continued) 290 Corporate Reputations, Branding and People Management Table 8.3 (Continued) Components What is it? Creates value by: asking employees to work in new ventures/projects, e.g. overseas Associations The images and ideas Creates interest and connected with the relevance to Employer employer brand – employees brand equity what it means to Helps differentiate employees and from competitor potential employees employers Sends signals to employees’ significant others – says something good about the employee to others Conclusions In this chapter we have attempted to show how corporate com- munications can help produce change in the quality of employ- ment relationships by shaping psychological contracts and increasing levels of individual identification and internalization of the corporate messages on reputations and brands. We have used a model of strategic change through communication applied to multinational or multidivisional companies to show how the processes of change are linked to more or less receptive contexts for change. We have also evaluated some of the ideas connected with employer of choice and employer branding programmes, concluding that, in line with our argument in Chapter 6, corporate messages usually need to be accompanied by a more segmented approach through employee value propos- itions to different target audiences to be effective. These conclusions are very much in line with research on the distinctive role of communications in managing psychological contracts (Guest and Conway, 2002). They found that three categories of corporate communications were associated with Chapter 8 Corporate communications and the employment relationship 291 different outcomes for psychological contracts. Job-related com- munications, which refer to the ongoing interaction between the employer and employee in the job, e.g. during appraisal, career development etc., and communications during the recruitment process were associated with ‘contract explicitness, lower levels of breach, fairer exchanges and management perceptions of the impact of the psychological contract on employee-related out- comes’ (p. 35). Top-down communications from management, for example mission and values statements, were rated the least effective by managers in the study, which is consistent with other evidence and with the arguments in this chapter. The study also showed that senior managements were well aware that their organizations quite frequently were unable to keep their promises and commitments, and were aware of the potential impact such breach may have on psychological con- tracts. Yet, they recognized the importance of communications and psychological contracts to the success of their organizations. Such an apparent contradiction raised the question of why they make such promises in the first place. One answer is that they do not have a good enough under- standing of the communications process, and the role of sustain- able corporate stories in creating better reputations and brands. We hope the model and discussion on employer branding, seg- mentation and employer value propositions may have helped. References Ahlrichs, N. S. (2000) Competing for talent: Key recruitment and retention strategies for becoming an employer of choice. Palo Alto, CA: Davis- Black Publishing. Argyris, C. (1993) Knowledge for action. San Francisco, CA: Jossey-Bass. Ashby, F. and Pell, A. R. (2001) Embracing excellence: become an employer of choice to attract the best talent. Hemel Hempstead: Prentice Hall. Barrow, S. and Mosley, R. (2005) The Employer Brand ® : bringing the best of brand management to people at work. London: Wiley. Barry, D. and Elmes, M. (1997) Strategy retold: toward a narrative view of strategic discourse, Academy of Management Review, 22 (2), 429–452. Bergstrom, A., Blumenthal, D. and Crothers, S. (2002) Why internal branding matters: the case of Saab, Corporate Reputation Review, 5 (2–3), 133–142. 292 Corporate Reputations, Branding and People Management Boje, D. (2006) Pitfalls in story-telling: advice and praxis, Academy of Management Review, 31, 218–224. Buchanan, D., Fitzgerald, L., Ketley, D., Gollop, R., Jones, J. L., Saint Lamont, S., Neath, A. and Whitby, E. (2005) No going back: a review of the literature on sustaining change, International Journal of Management Review, 7, 189–205. Cappelli, P. (1999) The new deal at work: managing the market-driven workforce. Boston, MA: Harvard Business School Press. Dell, D. and Ainspan, N. (2001) Engaging employees through your brand. Conference Board Report, No. R-1288-01-RR, April, Washington, DC: Conference Board. Ford, J. D. and Ford, L. W. (1995) The role of conversations in pro- ducing intentional organizational change, Academy of Management Review, 20, 541–570. Goss, T. and Pascale, R. (1991) Managing on the edge. London: Penguin. Goss, T., Pascale, R. and Athos, A. (1993) The reinvention of the rollercoaster, Harvard Business Review, 71 (Nov–Dec), 97–108. Guest, D. E. and Conway, N. (2002) Communicating the psychological contract: an employer perspective, Human Resource Management Journal, 12 (2), 22–38. Haig, M. (2001) Brand failures: the truth about the 100 biggest branding mistakes of all time. London: Kogan Page. Huselid, M. A., Becker, B. E. and Beatty, R. W. (2005) The workforce scorecard: managing human capital to execute strategy. Boston, MA: Harvard Business School Press. Konrad, A. M. and Deckop, J. (2001) Human resource management trends in the USA: challenges in the midst of prosperity, International Journal of Manpower, 22 (3), 269–278. Leary-Joyce, J. (2004) Becoming an employer of choice: make your organ- ization a place where people want to do great work. London: Chartered Institute of Personnel and Development. Martin, G., Beaumont, P. B. and Staines, H. J. (1998) ‘Managing organizational culture’, in C. Mabey, T. Clark and D. Skinner (eds), Experiencing HRM. London: Sage. Martin, G. and Beaumont, P. B. (2001) Transforming multinational enterprises: towards a process model of strategic HRM change in MNEs, International Journal of Human Resource Management, 10 (6), 34–55. Miles, S. J. and Mangold, W. G. (2004) A conceptualization of the employee branding process, Journal of Relationship Marketing, 3 (2/3), 65–87. Miles, S. J. and Mangold, W. G. (2005) Positioning Southwest Airlines through employee branding, Business Horizons, 48, 535–545. Mintzberg, H., Ahlstrand, B. and Lampel, J. (2004) Strategy bites back. London: Financial Times/Prentice Hall. Mitchell, C. (2002) Selling the brand inside, Harvard Business Review, Jan–Feb, pp. 34–41. Pate, J. M., Martin, G. and Staines, H. (2000) The New Psychological Contract, cynicism and organizational change: a theoretical framework and case study evidence, Journal of Strategic Change, 9 (1), 481–493. People Management (2005) British Airways and Gate Gourmet sign a new in-flight catering contract, People Management, 21 October, p. 7. Pfeffer, J. (1998) The human equation: building profits by putting people first. Boston, MA: Harvard Business School Press. Pfeffer, J. (2005) Creating a performance culture. Presentation at University of Strathclyde, 23 September. Ruch, W. (2002) Employer brand evolution: a guide to building loy- alty in your organization. http://www.versantsolutions.com. Schultz, D. and Kitchen, P. (2004) Managing the changes in corporate communications and branding, Corporate Reputation Review, pp. 350–-366. Sparrow, P. R., Brewster, C. and Harris, H. (2004) Globalizing human resource management. London: Routledge. Tarzian, W. (2002) Linking the hiring process to brand management, Strategic HR Review, 1 (3), 22–25. Van Riel, C. B. (2003) The management of corporate communica- tions, in J. M. T. Balmer and S. A. Geyser (eds), Revealing the cor- poration: perspectives on identity, image, reputation, corporate branding and corporate-level marketing. London: Routledge. Chapter 8 Corporate communications and the employment relationship 293 . messages and packages for each career segment. 286 Corporate Reputations, Branding and People Management The brand people purchase The brand people work. 133–142. 292 Corporate Reputations, Branding and People Management Boje, D. (2006) Pitfalls in story-telling: advice and praxis, Academy of Management Review, 31,