Corporate reputations, images and identity: how theory can help practitioners

I’m just about to begin a two-week stint running some courses and doing presentations on HR’s contribution to branding and reputation management in Australia and China. As always, I’m on the lookout for interesting material from academics to help me provide some insights into these important topics; hanging around airports and spending time on long plane journeys gives you plenty of time to do just that. So I brought with me the new edition of the Corporate Reputation Review (Volume 11, number3 for those interested). This special edition brings together leading people in the field of organizational identity to write about their emerging frameworks and data. In this increasingly arcane field, this special edition produces some gems. Though the papers are difficult to decipher, even for academics versed in the language of social identity and social actor theory, they yield some blindingly obvious-in-retrospect insights that cause me to re-think some of my ideas on employer branding, some research and consulting work we are doing in the field of employees’ images of healthcare organizations, and the nature of the HR.

The first is an examination of the well-worn distinction in the literature on reputation management between organizations’ needs to be simultaneously different and legitimate in terms of their organizational identities, the characteristics of which are their central, enduring and distinctive attributes (CEDs). Brayden King and Dave Whetten (the latter always a great bet for new insights) suggest that this ‘paradox of identity’ can be thought of in a rather different way than has hitherto been the case. Traditionally, this tension has been seen in terms of organizations attempting to solve seemingly incompatible needs for being different (i.e. branded) from competitors in product and labour markets but also being similar (social legitimate) to their comparators (e.g. being socially responsible, adhering to legal and governance standards, etc).
King and Whetten’s insight – rather obvious when you think about it - is that these needs are linked by the notion of ‘accountability standards’, which define norms of both appropriate behaviour (legitimacy) and esteemed performance (reputation).

Thus, when an organization seeks to become or remain a member of a business/ industry category, say a healthcare provider, it has to meet the minimum expectations of external and internal ‘audiences’ for patient care and the delivery of public value – the necessary, legitimacy-based conditions for membership. However, to become an esteemed member, it has to meet the ideal or aspirational standards of that group of businesses/ industry (reputation). The two, of course, are linked in the form of a continuum from minimum standards to ideal standards. And, because they are linked, changes in one have an impact on the other and vice versa. So, for example, as our expectations of the minimum standards of an employer change in relation to what might be expected, say, of an ‘employer of choice’, this leads to a ratcheting-up of our expectations of the ideal standards of an employer of choice - in other words, employer branding becomes a moving target. Similarly, as organizations compete harder to become employers of choice, such competition leads to a ratcheting-up of minimum standards. The probable results of this last dynamic is that the previously held ideal of an employer of choice becomes the the minimum table stakes, because audiences focus on, and increasingly use as their benchmarks, these prominent players in their industry and exclude reference to others.

Applying this line of thinking to the legitimacy and reputation of the HR function itself, you might be better able to understand how excellence in HR is no longer just associated with meeting the standards associated with cost control and service delivery to internal stakeholders, its two traditional and necessary functions (see Martin, Reddington and Alexander, 2008). Nor, we argue, is it good enough for HR to meet the aspirations of being ‘strategic’ (i.e. to contribute to corporate needs for innovation, customer satisfaction, productivity through high performance work systems, etc) , which has now become the prototypical expectation for HR excellence. Instead, HR needs to focus on the long term reputation and legitimacy of the organization itself by contributing to corporate branding, corporate governance and risk management, corporate social responsibility and ethics, and the creation of intellectual capital. These are all intangible assets, which, according to the well-known economist John Kay (2005), are the reason ‘why some nations are rich and others remain poor’.

The downside of this process, however, is that the market and competition over organizational and even professional identities leads to ever more risky behaviour, in much the same way that competition in financial services has seen firms develop riskier products and riskier HR strategies (talent management and bonuses). What will HR need to do next to help organizations become an employer of choice, and to become a function that rates high in the credibility stakes with CEOs?

The second article is by Kristin Price (who tragically died recently) and Dennis Gioia, both of whom featured in a recent blog. This time, their specific contribution is to raise the question: how can organisations improve their images in the marketplace for images – that is, among customers, employees, the media, prospective employees, shareholders, governments and the like? Building on their previous work on the notion of organizations having multiple, intended and unintended images, they propose the notion of the self monitoring organization. This concept is borrowed from the literature on individual differences. So just as high self monitoring individuals have to be vigilant about the multiple images of themselves (their own self concept, professional images, family members’ images etc), so high self monitoring organisations use a range of strategies and individuals to further the organization’s interests in reconciling self image with others’ images (the press, employees, prospective employees, shareholders, etc). Most of these are well known – brand ambassadors or even bloggers who are high in self-monitoring and become the eyes and ears of the organization, newcomers not yet socialised into the system, boundary spanning functions such as marketing, communications and, yes, and outward looking HR function, social networking and leadership liaison functions, which interact with outsiders, etc.

Two critical points emerge from this paper. The first is to expect multiple images in organisations and leadership difficulties in understanding them, especially if they aren’t high self monitoring as a group. The second is the problem of managing organizations with purposively different intended images, for example, a merger between two quite different companies even in the same industry. Both of these problems can be solved, to a degree at least, if organizations become high in self monitoring. As an afterthought, it in self-monitoring that Web 2.0 can make an enormous impact in helping act as the eyes and ears of the organization – another connection between technology and branding.

Family Owned Business

My company is a family owned manufacturing business. The owner's son manages the place while the owner has moved to another state. The son hires a friend of his and promises to pay him more than the set amount that entry level employees make. This friend had no prior experience to warrant being paid more, nor has the company ever paid any employee in this position more than another in this same position (as a starting pay). In the past, this boss has also hired all 5 of his children and paid them more than anyone else. Is this legal? Is it ethical? I'm stuck in the HR/ payroll position and feel like I should advise the owner, which of course will bring about problems with this boss, who is not my direct boss. What to do?

I am not a lawyer. I do not offer legal advice. I do not pretend to offer legal advice. I don't even watch Law and Order any more, so I'm not even up on the nuances of NY criminal law. Not that this would matter in this situation.

Not being friends with the boss is not a protected class. This, in my way of thinking, means that you don't have any claim of discrimination if the boss pays his BFF more than he is paying you, or rather the other entry level workers. You may see it as stupid, he may see it as being generous to an old friend.

Hiring your children is not illegal either. Nor would paying them more than other employees be anything less than expected. Is it stupid? Probably. (Although, I wonder if it would be illegal to pay them extreme amounts of money in an attempt to transfer assets to them without IRS problems. Hmmmm, too bad I'm not an accountant either.)

As you are probably already aware, salary information like this gets around very fast although no one is willing to admit that they said the boss's friend/child is getting more money than everyone else. It ruins morale and if in addition to being overpaid, the boss's friends and children aren't stellar performers, it's going to increase turnover.

So, this is why it matters to you. It doesn't matter how much the boss pays someone or who he hires. (Does not matter. Does not matter. Repeat that.) It matters how the workplace is affected.

Should you go to the owner? Only if you regularly report to the owner. If not, then it's a phone call out of the blue to say that sonny-boy is a screw up. They either already know or they are in denial, so what good will it do? You don't even report to the boss, let alone his parents.

You should voice your concerns--to your boss. Your concerns are with employee morale, pay consistency and productivity. If the first and the last are not a concern--frequently people in family owned businesses expect the boss's children/friends to be given special privileges and while they may grumble about it, it doesn't really have an effect on performance--then don't bother. Now, if clueless friend gets promoted out of an entry level job without proper qualifications, then as an HR person it is your responsibility to lay out the problems with this approach.

If you have a regular working relationship with Sonny you may mention your concerns about morale to him. He may think he's a great guy who is helping people while you see him destroying the business. Now, if the owner happens to give you a call and ask what is going on, you can express your concerns, but don't call them up.

HR and the Governance Agenda

As part of our corporate reputations and HR agenda, I've been working on a chapter with a close colleague for a new book edited by Suzanne Young on governance. The chapter will focus on the links between HR and the governance agenda, but will do so from a public sector perspective, where governance issues are equally important.

Part of the reason for the book chapter stems from the current economic crisis, which, in part at least, is a crisis of governance. A few years ago, we wrote a case study on the financial services industry, which was sub-titled 'An industry fit for the future?' In that case we questioned the role of incentives in creating an industry driven by new business and new products rather than by servicing existing customers. Well, the forecast implied by the question in the title was along the right lines, with incentives, greed and lack of governance playing a role in most explanations of what has happened. So the challenge has to be raised, to paraphrase Bert Spector's classic paper on Enron, was HR the 'unindicted co-conspirator' in the demise of financial services?

To return to the public services, our work with some senior HR directors in the NHS in Scotland has led me to think about the links between how HR governs itself, and how that plays into the so called 'three pillars of governance' in healthcare - staff governance, clinical governance and financial governance. It has also led me to think about just how central an issue this is since governance seems to be about balancing innovation and risk in all three pillars and in the HR function itself. How HR organizes itself and is incentivised to be simultaneously creative and risk-conscious can have an enormous impact on how well employees experience their organisations as employers of choice, embracing principles of fair treatment, a say in decision-making, development, a good working environment and supportive leadership (staff governance). In turn, this has obvious consequences for clinical governance, which is concerned with balancing innovations in healthcare with patient safety, especially in so far as staff are fully trained and committed to caring/ prevention goals.

However, where HR at senior levels can really make their mark is at the corporate (read financial) governance level, providing advice and help in the selection, development, performance management and incentivisation of boards. As we have seen in the financial services sector, the culture of an industry and the organisations that represent it are shaped by leadership actions and the values they espouse. Consequently, HR and people management has a key role in to play in promoting their organisations as representatives of 'higher values' rather than just 'hired hands'. So, resurrecting the arguments of Karen Legge, my position is that HR needs to think less about being strategic partners (pace Ulrich) and more about more about becoming managers of reputations - for being simultaneously different (the branding agenda) and legitimate (the governance, ethics and CSR agenda). Any thoughts?

Knowledge Poll

Because We Like to Give Advice

I am interviewing for an HR/Information Assistant position this Thursday (October 30). I really really want to get this position, as I am very interested in working for Human Resources. However, I do not have any prior experience in HR, and have heard that it is difficult to get into the department without prior experience. Is there any advice you could provide for someone like me, who really wants to prove to the employer that I am serious about this job, and that I am the perfect candidate?

It is difficult to get a job without experience, but we all did it at some point. I'll ask my readers to give additional advice to you, but here's mine: Don't pretend you can do something when you can't.

I would far rather have someone say, "I have no idea how to do x, but I'm a fast learner and I'm willing to try anything. I'm sure I could learn to do it. In fact, in my last job I [learned x] and became the department expert." So much better than, "yeah, I can do that," and then you really can't.

Also, I'm not sure what an Information Assistant is (but can I have one?), but an HR assistant is an entry level job where you aren't expected to know everything, but you are expected to jump in and try and learn. Also, we expect that you will never make a mistake. (Ha! We know you will, but we will try to prevent you from making mistakes that will show up on the CEO's desk.)

What other advice do you have for this future HR person?

The Problem With HR

In the comments on Policy Problem Just Another HR Lady Wrote:

I would like to just comment that every profession (not just HR) has individuals who are low-performers or who are not the right fit for the job. Because HR deals with every single person in the organization at every level, HR low-performers or those who make mistakes/errors/missteps are much higher profile in the company than someone who only deals with one department.

And with that she sums up a very real problem. Every employee at every level has contact with HR and sometimes with very low level HR people. Add to this that HR isn't the highest paid profession and sometimes you get some real problems.

Any mistake we make is magnified--because it involves people. Let me tell you about a memorable mistake in my past. Once upon a time, I was responsible for running the year end salary increase program--for the entire, very large company. This was in the dark ages, so at the end of the whole thing we sent every manager a piece of paper with a list of their employees and the employee's official increase. Attached to that were individual notification sheets for each employee with their names and new salaries. Did I mention this was a very large company? Did I also mention this was all done on PAPER? Oy.

So, we're handling tens of thousands of sheets of paper. Stuffing them into envelopes and sending them out. It was quite a process. And we made a mistake. No one really knows who--everyone in the department, from admin to VP helped out on this stuffing process, so it could have been anyone. But, we made a mistake and ONE Vice President (note how I said, one out of thousands) got an extra sheet stuck to his list. The extra sheet happened to be for one of his direct reports, so it wasn't as if he saw anything he didn't already have access to. It was just a mistake. And unfortunately, it happened at the top.

Of course, the world came to an end and there were meetings and process re-designs and it was a mess and if you ask me if I ever want to do that again the answer is a resounding no. It made us look terrible and no one recognized that our error rate was well below 0.0002%. You ask me if any other department would get reamed for that error level. Even worse all of HR looked bad, even though staffing, employee relations, benefits, etc. didn't even make the mistake. My group did.

My point is, of course, that we do have to be better. We need to know more than we do. We need to be more accurate than we are. We just need to be better employees.

Which makes sense. After all, if we're in the people business we should be the best people.

Branding and Reputations: the Needs for Equivocality, Flexibility and Adaptability

It’s been my week for working on reputation management and employer branding. Along with colleagues in the Centre, I’ve just finished off a couple of draft reports on employer branding and reputation management for two of the largest health boards in Scotland, given a presentation on the topic to the senior executive team of another health board, and about to give a presentation on corporate reputations to a specialist conference on the subject in Rome in a few hours. So it was extremely helpful to have received a mail from a good colleague of mine, Kerry Griggs, from Charles Sturt University in Australia, who is working with me in this field. Kerry pointed me in the direction of an insightful academic piece in the Journal of Management Inquiry by Kirstin Price, Dennis Gioia and Kevin Corley from the USA entitled ‘Reconciling Scattered Images’, which has helped me make sense of the scattered images we have unearthed in our own health service research and revise some of our model building on employer branding, coming out in two books early next year by Ron Burke and Cary Cooper and by Paul Sparrow.

Price et al discuss organizational images from three perspectives. These are projected organizational images (self presentation), refracted images (how outsiders read specific aspects of an organizational image) and intercepted images (how particular employees and leaders interpret images, often based on the way insiders think outsiders see them). So far, nothing much new here, aside from new terms. However, it is what they make of these, often competing, images that help me make sense of organizations such as the NHS. They argue that these images are ‘best seen as ‘virtual commodities modified and exchanged’ in a marketplace for ideas about an organisation. Thus people hold multiple images of organisations, often at odds with the official one that organisations such as the NHS would like to dominate the marketplace for ideas about health providers. As an example, our research (on, in their terms, projected, refracted and intercepted images) has unearthed four competing and complementary images among health service employees in rank order of the 'volume' (a measure of frequency and intensity with which they were expressed during group interviews): as organisations dominated by financial governance, power and politics; as professional bureaucracies structured along strong clinical identities, as employers of choice; and as a patient-centred, caring organisations. Interestingly, while the first two images dominated, the last two were not widely held or consistently expressed during our interviews.

Price et al's key insight is that organisations such as the NHS need to be flexible and adaptable in identity management to cope with the dynamic environments in which they operate. In this way they become sustainable in the long run – the dynamic capabilities argument. Organisational image architects (and academics) need to think in terms of ‘image equivocality’ to mitigate the scattered images problem. Roughly translated this means they need to build in flexibility (relevant to time and context), consistency (non-contradictory images) and inclusivity (relevant and authentic to most employees and users). How organisations such as specific health care providers achieve this is dependent on their ability to create images that maintain employees’ appreciation of its needs for adaptability (say in moving care towards the community and away from hospitals, and in meeting ever stringent financial resourcing) while not producing cynicism and mistrust through projected duplicitous images (e.g. those emphasising patient care that health service workers sometimes find difficulty in buying into, given their perceptions of senior management's main concerns). Such projections have an awful tendency to come back to haunt them.

Political science tells us this is best achieved by creating images that constituents can write what they want into them, while still remaining consistent with their overall mission and values. Which is why we are advocating public value as a equivocal image for health services providers. This notion, part of another of our research programmes on healthcare discussed on this blog, seems to fulfil the criteria of flexibility, consistency and inclusivity because it is ‘what the public values’, an idea broad enough to be flexible,consistent and inclusive but also a compelling one. What the public values may change over time with ratcheted expectations of healthcare providers; it may also change over time to incorporate an economic as well as caring mission. However, it remains a consistent goal for many healthcare employees seeking to gain meaning from their work while being fairly rewarded and provided for, and being allowed to hone and utilise their professional skills. For example, new public sector financial stringencies will lead to investment problems for all healthcare providers in the UK, while demographic trends point to major problems in recruiting clinical and non-clinical staff from traditional labour markets. A public value image allows healthcare to reflect these environmental changes by being at the heart of economic development as well as a caring society - providing good knowledge-intensive jobs in regions that need them and in providing employment for disadvantaged groups who are often those most in need to healthcare as a consequence of their marginalisation (see the results between unemployment and health). These economic goals are easily reconcilable with a healthcare and prevention mission, and place Scotland’s healthcare providers at the heart of economic growth.

Is this a projected image that we can all write into it what we want to, while remaining consistent with the traditional values of the NHS?