Human Resource Management Role Implications for Corporate Reputation

Corporate Reputation Review,Vol. 12, No. 3, pp. 229–244© 2009 Palgrave Macmillan, 1363-3589

Corporate Reputation Review Volume 12 Number 3

229www.palgrave-journals.com/crr/

ABSTRACT Corporate reputation is an intangible yet impor-tant factor that infl uences stakeholder behavior, including employees, management, customers and investors. In order to add organizational value, the human resource (HR) function must focus on actions that build employee competencies and motivation that in turn positively infl uence corpo-rate reputation. This article reviews HR roles and presents a conceptual framework that builds on research conducted by Fombrun and van Riel (2004). The framework suggests that HR can indirectly help improve corporate reputation. The author provides organizational examples and implications for HR managers. Corporate Reputation Review (2009) 12, 229 – 244. doi: 10.1057/crr.2009.17

KEYWORDS: corporate reputation ; human resource management ; role ; organizational value

INTRODUCTION Corporate reputation is a relatively stable, long-term intangible corporate asset that is important for organizational competitiveness ( Ou, 2007 ). 1 Fombrun (1996) defi nes repu-tation as a ‘ perceptual representation of a company ’ s past actions and future prospects that describe the fi rm ’ s overall appeal to all its key constituents when compared to other leading rivals ’ ( Fombrun, 1996: 72 ). Organizations devote considerable resources toward enhancing corporate reputation ( Ou et al. , 2006 ; Branco and Rodriques, 2006 ; Caruana et al. , 2006 ; Balmer, 2001 ). The public relations and corporate commu-nications disciplines emphasize how corporate

reputation effects consumer behavior ( Clardy, 2005 ; Gray and Balmer, 1998 ) and market-ing focuses on the branding and identity process ( Olins, 2000 ). The impact of the human resource (HR) function on corporate reputation is rarely reported. Notable excep-tions include studies that show its ability to recruit talented employees ( Clardy, 2005 ; Turban and Cable, 2003 ), that fair treatment of HR enhanced corporate reputation ( Koys, 1997 ) and a study that employee layoffs decreased corporate reputation ( Flanagan and O ’ Shaughnessy, 2005 ).

As an internal support function, HR can enhance corporate reputation by partnering with senior management and implementing strategic HR practices ( Lockwood, 2004 ). Lockwood (2004) argued that HR can part-ner with leadership to drive corporate repu-tation because human capital is a critical value driver of corporate reputation. Human Resource Management (HRM) capabilities can result in valuable and diffi cult to imitate strategic competitive advantages ( Flanagan and O ’ Shaughnessy, 2005 ; Boxall, 1996 ). HR managers can focus on initiatives that build employee competencies that add value to important organizational outcomes, including corporate reputation ( Ulrich and Brockbank, 2005 ; Conner and Ulrich, 1996 ; Ulrich et al , 1995 ). In addition, HR manag-ers should implement initiatives that increase employees ’ motivation to drive corporate reputation when interacting with external stakeholders (eg, customers).

HR activities can positively impact organizational reputation, but how HRM

Human Resource Management Role Implications for Corporate Reputation

Barry A. Friedman School of Business, The State University of New York at Oswego , Oswego , New York , USA

HRM Role Implications

Corporate Reputation Review Vol. 12, 3, 229–244 © 2009 Palgrave Macmillan 1363-3589230

specifi cally infl uences particular dimensions of reputation needs to be explored. The pur-pose of this article is to offer a conceptual framework to guide HR managers in their efforts to strengthen their organization ’ s reputation. The article fi rst defi nes corporate reputation, and then presents a conceptual framework of corporate reputation that in-corporates HR roles. Organizational exam-ples that illustrate aspects of the conceptual framework are then offered. The article con-cludes by providing practical guidance to HR managers in their quest to support their organizations ’ corporate reputation.

LITERATURE REVIEW

Corporate Reputation Corporate reputation is a collectively held set of beliefs built in a cumulative fashion over time by stakeholders based on the assumption that their interests will be satis-fi ed ( Gabbioneta et al ., 2007 ; Gioia et al ., 2000 ). Fombrun (1996) also emphasized that reputation is perceptual and relates to the organization ’ s appeal to key constituents. Corporate reputation may be viewed as an intangible asset and investment ( Ou et al. , 2006 ; Eberl and Schwaiger, 2005 ; Kotha et al. , 2001 ), ‘ which cannot be traded via factor markets and is sustainable in that competitors cannot quickly neutralize it ’ ( Hunt and Morgan, 1995: 842 ). There is considerable empirical research relating corporate reputa-tion to fi nancial performance ( Brammer et al. , 2006 ; Freiesleben, 2006 ; Anderson and Smith, 2006 ; Rose and Thomsen, 2004 ; Sabate and Puente, 2003 ; Cooper et al. , 2001 ). Gabbioneta et al. (2007) reported that securities analysts operating on the Milan Stock Exchange judged corporate reputation mainly on fi nancial performance, leadership quality and the organization ’ s future pros-pects. S á nchez and Sotorr í o (2007) posits that social responsibility (a dimension of cor-porate reputation) results in a competitive advantage. Competitive advantages allow

organizations to demand higher premiums for its products and services, attract more qualifi ed employees, and generate greater consumer loyalty ( Rose and Thomsen, 2004 ). Memery et al. (2005) found that corporate reputation in the form of ethical and social responsibility infl uenced consum-ers ’ buying decisions. Specifi cally, perceived food quality, human rights and environmen-tal issues were considered along with price and convenience when making buying decisions.

Bromley (2000) stated that stakeholders use various criteria to assess corporate repu-tation and therefore have different organi-zational expectations. Stakeholders are defi ned as ‘ any group or individual who can affect or is affected by the achievement of the organization ’ s objectives ’ ( Freeman, 1984: 46 ), and includes ‘ shareholders, con-sumers, business partners, governments, media, local communities ’ ( Neville et al. , 2005: 3 ). Employees expect fair compensa-tion and treatment, shareholders expect a return on their investment, and society expects organizations to protect, or at least not damage the environment. Corporate reputation has been shown to be infl uenced by the customers ’ satisfaction with perceived products and services quality ( Carmeli and Tishler, 2005 ). Corporate reputation has been shown to be related to fi nancial per-formance ( Dowling, 2006 ; Wu, 2006 ; Orlitzky et al. 2003 ; Anderson and Smith, 2006 ; Hannon and Milkovich, 1986 ). The disclosure of corporate reputation indices has not consistently affected shareholder value, possibly because investors have already in-corporated the information of such disclo-sures prior to publication ( Abraham et al. , in press ). Groenland (2002) outlined the effects of corporate reputation on various stakeholders: the trust and loyalty of custom-ers, desirable investment opportunities for investors, job security for employees and environment responsibility for society. For example, socially responsible behavior on the part of organizations can increase

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© 2009 Palgrave Macmillan 1363-3589 Vol. 12, 3, 229–244 Corporate Reputation Review 231

employee motivation and loyalty and reduce employee turnover and its associated cost ( Albinger and Freeman, 2000 ). As an inter-nal support function, HRM can indirectly improve corporate reputation as judged by external stakeholders.

The measurement of corporate reputation has been problematic with respect to valid-ity, standardization and constructs measured ( Helm, 2005 ; Larkin, 2003 ; Wartick, 2002 ; Fombrun et al ., 2000 ). To standardize the measurement process, Harris Interactive (a market research fi rm) and the Reputation Institute developed a multidimensional def-inition of corporate reputation, the Reputa-tion Quotient (RQ sm ) ( Fombrun and van Riel, 2004 ). For the purposes of this article, RQ sm will be used as it provides a compre-hensive treatment of domains that HRM can indirectly impact. Based in part on research conducted by Groenland (2002) , Fombrun and van Riel (2004) defi ne RQ as consisting of six dimensions of stakeholder assessment:

Emotional Appeal (eg, good feeling about the company) Products and Services (eg, offers products that are a good quality, value and innova-tive) Vision and Leadership (eg, has excellent leadership, well managed) Financial Performance (eg, profi tability, outperforms competitors) Workplace Environment (eg, rewards its employees, treats employees fairly) Social Responsibility (eg, supports good causes, is environmentally responsible)

Harris Interactive developed a methodology and questionnaire that measures RQ, and publishes its annual RQ index in the Wall Street Journal (see www.harrisinteractive.com ). The RQ differs from the Fortune reputation index in that the Fortune index consists of eight attributes: quality of management, quality of products / services,

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innovation, long-term investment, fi nancial soundness, social responsibility and use of corporate assets ( Fortune Datastore, 2007 ).

Based on extensive statistical analyses, Fombrun and van Riel (2004) maintain that emotional appeal is the largest driver of corporate reputation. Quality products and services, social responsibility and workplace environment dimensions drive emotional appeal. These authors note that the vision / leadership and fi nancial performance dimen-sions are not strong drivers of corporate reputation when compared with emotional appeal.

HR managers can implement organiza-tional communication, training and com-pensation initiatives that enhance employee competencies and motivation, which in turn infl uence corporate reputation. A concep-tual framework that builds on Fombrun and van Riel’s (2004) research that incorporates HR roles and corporate reputation appears below.

An HRM Role / Corporate Reputation Conceptual Framework A conceptual framework that relates HR roles and corporate reputation appears in Figure 1 . 2 Corporate history, culture, marketplace and type of organization infl u-ence the role HR plays and its potential impact on employees ’ assessment of their organizations ’ corporate reputation. The HR function may play a more infl uential role in organizations whose intellectual capital has a competitive advantage. For example, the intellectual capital of systems engineers in Google or Intel may make employee satisfaction, compensation and retention important. HR may not be as infl uential in organizations that produce commodities that do not require specialized or unique skills to produce (eg, commodi-ties). In such organizations, HR may be relegated to non-strategic administrative roles. Similarly, service organizations where employees have direct contact with



consumers may place the HR function in an infl uential role when compared with manufacturing organizations that have less interaction between employees and con-sumers. Competent employee behavior plays a pivotal role in consumer satisfaction with service encounters ( Estelami, 2000 ; Estelami and DeMaeyer, 2002 ; Heskett et al. , 1997 ). In manufacturing organizations, however, less interaction occurs between employees and consumers. HR practices such as com-pensation and training infl uence employee behavior that consumers and the general public observe and use to assess corporate reputation.

HR professionals themselves report that their role differs depending on organiza-tional type. Benedict (2008) reports that HR professionals from publicly owned for prof-it organizations were more likely than HR professionals from private for profi t organi-zations to report that they played a strategic role. HR professionals from small organiza-tions were more likely than HR profession-als from large organizations to report that they play administrative roles ( Benedict, 2008 ). HR professionals in large organiza-tions also report that they implement change agent roles more frequently than HR profes-sionals in smaller organizations ( Benedict,

2007 ). In other words, the type of organiza-tion and its background infl uences the extent that the HR function impacts corporate reputation. The HR function indirectly infl u-ences corporate reputation by implementing roles that increase employee competency, motivation and organizational identifi cation. Organizational leadership should demand more of their HR function to contribute to important outcomes, including corporate reputation ( Friedman, 2005 ). HRM roles are reviewed below.

HR Roles Ulrich (1997) proposed that the HR func-tion adds value to organizations by imple-menting four roles: strategic partner, change agent, administrative expert and employee champion. Each role is a facet of the HR function and has a measurable deliverable that aligns with the organizational mission and its operating objectives. Extant research demonstrates that HRM can increase the economic value of organizations ( Becker and Gerhart, 1996 ; Delaney and Huselid, 1996 ; Huselid, 1995 ; Huselid and Becker, 1996 ; Huselid et al ., 1997 ; Guest, 1997 ; Welbourne and Andrews, 1996 ). Hurley and Estelami (2007) hypothesized that high-er employee satisfaction levels should lead

ExternalStakeholder

CorporateReputation

Assessment

Employee Perceptions:

Workplace Environment

Products and Services

Social Responsibility

Vision and Leadership

Emotional Appeal

Financial Performance

Strategic Partner

Change Agent

AdministrativeAgent

EmployeeChampion

OrganizationBackground

Mission

Strategy

History

Values

EmployeeAttributes:

OrganizationalIdentification

Competency

Motivation

Figure 1 : Human resource role impact on corporate reputation

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to high customer satisfaction, and ultimately affect consumer loyalty and profi tability. Their research found that employee turno-ver and job satisfaction predicted customer satisfaction. Schneider and Bowen (1993) report that retail stores with lower rates of employee turnover have higher levels of customer satisfaction. Hurley (2002) reviews research that suggests employee knowledge and competence is strongly related to organizational performance.

HR role implementation can impact the extent that employees identify with their organization. Employees ’ identifi cation with their organization is an important pre-cursor to corporate reputation ( Fombrun and van Riel, 2004 ). Employees that iden-tify with their organization are more likely to engage in behavior that support the or-ganization and act as organizational ambas-sadors when interacting with the public. Wieseke et al. (2007) found that employees ’ customer orientation behaviors depended on employees ’ organizational identifi cation. Edwards (2005) suggested that organiza-tional identifi cation results in employees ’ defending the organization and acting in its best interests. Frontline employees strongly infl uence the extent to which customers view an organization as customer oriented ( Hurley and Estelami, 2007 ). Employees ’ organizational identifi cation may also be related to how favorably they believe customers, competitors and suppliers view their organizations ( Carmeli et al. , 2006 ). Mitki and Herstein (2007) tested an inno-vative training approach and found it to be an effective mechanism that builds corpo-rate identities as perceived by employees. These authors proposed that training enables organizations to rapidly assimilate the new identities, increase employee sat-isfaction, increase customer satisfaction and enhance the corporate reputation ( Mitki and Herstein, 2007 ).

Strategically implemented employee training and development programs can

enhance employee competencies. Sahinidis and Bouris (2008) found a signifi cant correlation between perceived training effectiveness and employee commitment, job satisfaction and motivation. Competent and motivated employees that identify with their organizations interact with external stakeholders (eg, consumers, investors) in ways that strengthen corporate reputation. Research supports the notion that effective HR practices increase employee commit-ment, and that increased commitment is a lead indictor of customer commitment, which in turn is a lead indictor of profi tabil-ity ( Ulrich and Smallwood, 2005 ; Rucci et al. , 1998 ; Watson Wyatt, 2001 ). Effective HRM practices are linked to employee organizational commitment ( Gaertner and Nollen, 1989 ; Kinicki et al. , 1992 ; Ogilvie, 1986 ). Meyer and Smith (2000) found a relationship between employees ’ evaluations of HRM practices and their organizational commitment. These authors review research that found organizational commitment and effective HRM practices in a number of areas, including recruitment ( Premack and Wanous, 1985 ), socialization (Ashforth and Saks, 1996), training ( Saks, 1995 ) and employee benefi ts ( Grover and Crooker, 1995 ). In the manufacturing sector, organizations with competent and motivated employees may produce higher quality products compared to their competitors that do not effectively train or motivate their workforce. Bartel (1994) found productivity increases as a function of employee training. According to the conceptual framework ( Figure 1 ), direct interaction with employees positively infl u-ences external stakeholders ’ assessment of corporate reputation. Indirect interaction with employees through superior products may increase corporate reputation. Each HR role in the conceptual framework is explored below with respect to employee impact, organizational examples and effect on external stakeholders that ultimately assess corporate reputation.



Strategic Partner In the strategic partner role, HR managers align HR initiatives with organizational goals. Strategic partners deliver executed strategies that create value as perceived by major organizational stakeholders such as employees, customers and investors ( Ulrich and Brockbank, 2005 ; Ulrich and Beatty, 2001 ). HR measures that are strategically linked to business objectives enables HR managers to form partnerships with organi-zational leadership ( Lockwood, 2007a ).

Strategic partners should focus on dimen-sions of corporate reputation that achieve organizational goals. In 2007, the Society for Human Resource Management awarded its strategic HR Management award to the Coca-Cola Company for driving corporate performance and reputation ( Fox, 2007a ). As senior vice president of HR, Cynthia McCague collaborated with Coca-Cola ’ s CEO Neville Isdell to help reverse the organization ’ s negative return on investment (ROI). In 2004, McCague surveyed, inter-viewed and conducted focus groups with management to identify the major issues for the organization and design ways to address them. Among several issues, the lack of clarity ranked among the most signifi cant barriers to the organization ’ s goal achieve-ment. In 2005, a new mission, values and objectives were established and communi-cated to employees via face-to-face meetings, company Intranet and Web-TV. This new direction was called Coca-Cola ’ s ‘ Manifesto for Growth ’ , which included the fi ve ‘ Ps ’ : people, planet, partners, profi t and portfolio. This new vision included three dimensions of corporate reputation defi ned earlier by Harris Interactive: corporate employee en-gagement (workplace environment), social responsibility and leadership qualities. Coca-Cola ’ s employee engagement survey indi-cated that employee engagement increased from 74 percent in 2004 to 79 percent in 2006. Volume in units sold increased from 2 percent to 4 percent, and 13 of 16 market

segments outperformed their performance objectives during the same time period. Coca-Cola ’ s standing on the Harris Interac-tive RQ index has maintained its position among the top four organizations despite impressive corporate reputations earned by other organizations such as Johnson and Johnson and Google.

Using the conceptual framework offered in Figure 1 , the strategic partner role in-creased employees ’ understanding and clar-ity of the organization ’ s mission, fostered employees ’ organizational identifi cation and increased employees ’ emotional appeal with the company. According to Coca-Cola ’ s of-fi cial corporate website, one corporate goal is to ‘ inspire and motivate our people to continue to achieve extraordinary things so that they can take pride in their work and their Company ’ ( Coca-Cola, 2008a ). The company has received numerous awards for its efforts to provide an excellent workplace for its employees, including being named No. 2 companies for diversity in 2008, rat-ed No. 2 for Corporate Social Responsibil-ity in 2007, recognized for policies that help employees balance work and family life, and achieved Star Status for employee safety and health initiatives, Occupational Safety and Health Administration Voluntary Protection Program ( Coca-Cola, 2008b ). Coca-Cola also encourages employee participation in improving communities ’ quality of life, in-cluding water stewardship, healthy active lifestyles, community recycling and educa-tion. For those employees that interact with external stakeholders, external stakeholders (eg, customers) may have perceived Coca-Cola employees (eg, sales, marketing, distri-bution personnel) as competent, motivated individuals that speak well of their company. External stakeholders that interact with Coca-Cola ’ s logistics and distribution supply network may also perceive Coca-Cola employees in a positive fashion.

As a manufacturing organization, Coca-Cola ’ s products and services constitute the

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major area of public interface that infl u-ences corporate reputation. The company instituted its Coca-Cola Quality System, a branded quality management system devel-oped by a global, cross-functional team that drives continuous improvement and rigorous quality measurement ( Coca-Cola, 2008c ). HRM supports the production of high quality products through training and employee certifi cation in standard operating procedures and quality management.

Younger et al. (2007) introduced the con-cept of the ‘ talent developer brand ’ as a way to enhance organizations ’ ability to compete for strategic and valued human capital. Mathis and Jackson (2008) defi ne human capital as the collective value of the employ-ees ’ capabilities, knowledge, skills and mo-tivation. Procter and Gamble, Ketchum, Xerox and Goldman Sachs illustrate organ-izations that gained favorable workplace environment reputations characterized by employee growth and mobility. These or-ganizations share a common value of em-ployee development as a key aspect of the corporate strategy ( Younger et al. , 2007 ) (see Figure 1 , organizational background com-ponent). This positive corporate reputation, earned primarily through heavy investment in the development of their human capital, has contributed to each organization ’ s abil-ity to attract, retain and motivate top talent at a lower overall cost ( Younger et al. , 2007 ). Clardy (2005) outlined positive and negative consequences that organizations experience contingent, in part, on the organizations ’ training practices. Investments that enhance employee capabilities result in competent employees. Numerous interactions between external organizational stakeholders (eg, cus-tomers) and competent and motivated em-ployees that identify with their organizations ’ positive reputation are cumulative. Over time, this cumulative interaction may im-prove corporate reputation as assessed by external stakeholders. Of course, interactions characterized by employee incompetence

are likely to have the opposite effect on cor-porate reputation, and ultimately lead to poor fi nancial performance.

Laurie Siegel, the senior HR vice presi-dent at Tyco, worked as a strategic partner with leadership to implement several posi-tives changes ( Deutsch, 2003 ). Ms Siegel implemented the company ’ s fi rst ethics training program in response to the scandal experienced under the leadership of Dennis Kozlowski. She stated, ‘ every month the perception of Tyco as a company in trouble is lessened ’ ( Deutsch, 2003 ). In 2007, For-tune ranked Tyco as number 10 on their most admired company list within their in-dustry. The improvement in Tyco ’ s ranking refl ected, in part, the impact of Ms Siegel ’ s efforts.

With respect to social responsibility as a strategic initiative, HR practices that reward socially responsible behavior can increase employee motivation, loyalty and reduce turnover with its associated costs ( Branco and Rodriques, 2006 ; Albinger and Free-man, 2000 ). At FedEx, Leadership and HR partnered to increase strategic charitable giving. FedEx donates over 100,000 hours of employee time to charitable organizations that share their values such as the American Red Cross ( About FedEx, 2007 ). HR poli-cies support and motivate employees to do-nate their time to charitable efforts. Using their corporate website and public relations, FedEx communicates these socially respon-sible activities to the public.

Change Agent The second role for the HR manager is change agent. In this role, HR managers deliver a renewed, more competitive organi-zation. In order to manage change effec-tively, HR must monitor the relevant business environment and facilitate organi-zational changes that add value. Domains that require monitoring include the com-petitive landscape, government regulations and the global economy (especially given the



recent trend toward globalization). Eastman Kodak ’ s transition from chemical to digital fi lm technology over the last decade is an example of an organizational change that required leadership, vision, overcoming re-sistance to change, extensive training and employee motivation. Eastman Kodak con-tinues its transition to a renewed, more competitive organization with HR manag-ers working to assist that change. Training and career development programs upgrade employee skills that improve product and service quality, important elements of cor-porate reputation.

In 2005, General Electric implemented its Ecomagination program. The objective of this program was to increase organizational growth by offering products that reduce en-ergy consumption, such as effi cient lighting and appliances ( Fox, 2007b ). HR managers can serve as change agents in this regard by engaging employees in the new product de-velopment process. Employee engagement can include initial idea generation, product development and commercialization. GE established an infrastructure, including a president of corporate citizenship that ena-bled employees to be actively involved in generating these new products that are so-cially responsible and also result in positive fi nancial results. HR training and reward systems are required to enable and motivate employees to achieve business objectives of programs such as Ecomagination. Once again, GE used its employee communication and public relations capabilities to publicize the program internally and externally, an important element in achieving corporate reputation ( Fombrun and van Riel, 2004 ).

Ulrich et al. (1989) described HR ’ s role during a merger between Baxter Healthcare Corporation and American Hospital Supply. Mergers and acquisitions are organizational changes characterized by employee resist-ance, stress and confusion. HR supported this merger by designing a new organiza-tional structure, implementing employee

communications, assisting in the selection of executives and other key positions, and pro-viding career assistance.

Administrative Expert The administrative expert role delivers effi cient HR processes such as staffi ng and benefi ts administration. The administrative expert roles can provide effi cient employee training and recruiting that reduces costs, improves productivity and increases profi t-ability. Employees and managers benefi t from HR process improvements, such as fi ll-ing vacant positions more quickly, increasing the quality of new hires and administering benefi ts in a timely manner. The adminis-trative expert role is not limited to HR processes, however. It can also impact other business processes that align with organizational missions and objectives. For example, HR managers can lead reengineer-ing efforts that improve the order fulfi llment and product development process. The result of effi cient and effective organizational proc-esses is higher quality products and services, and ultimately better fi nancial results, the latter two results readily observed by external stakeholders.

Product and service quality (an element of corporate reputation) refers to stakehold-ers ’ belief that the organization offers high quality products and / or services that are in-novative and provide good value for the money ( Fombrun and van Riel, 2004 ). HR can impact corporate reputation in this area by reengineering product development busi-ness processes that effectively move products and services from ideation to commercializa-tion. For example, the Films Business of Mobil Chemical, a leading global supplier of fl exible packaging and oriented polypro-pylene labeling applications, implemented a product innovation process to expedite the product development process. Task forces consisting of employees with relevant com-petencies moved products successfully through several ‘ gates ’ (eg, market demand

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and economic justifi cation). HR played a strong role in the selection and training of employees that participated in the program and facilitated the product development and implementation process.

Tyco did not have a company-wide com-puter technology when Ms Siegel was hired. She helped staff install technology that cen-tralized both the procurement process and the employee compensation system (payroll and benefi ts). In other words, she imple-mented the administrative expert role to help Tyco provide more effi cient services for two important stakeholder groups: sup-pliers and employees.

Employee Champion The employee champion role maximizes employee contribution and commitment by responding to employee concerns and providing opportunities for employees to increase competencies aligned with organi-zational objectives (Ulrich, 1997). The em-ployee champion role seeks to address the wide range of concerns that are salient to employees such as pay equity, adequate employee benefi ts, a harassment free work-place, safety and job satisfaction. Effective training, timely developmental experiences, career planning and mentoring provide employees with opportunities to grow, develop competencies, increase their mar-ketability and contribute more to their organization.

Acting as employee champions, HR at Wegmans (a privately held grocery chain with headquarters in Rochester, New York) has indirectly enhanced corporate reputation and fi nancial results. Wegmans earned a place on Fortune Magazine ’ s 100 best com-panies list for the past ten years, including number 1 in 2005, number 2 in 2006 and number 3 in 2007. Wegmans provides gen-erous employee benefi ts, including a college scholarship program that provides fi nancial assistance to 19,000 employees, awarding more than $ 59m. The Wegmans Scholarship

Program encourages all employees to pursue their educational goals, promote upward career mobility, promote community good-will, retain employees and increase Wegman ’ s reputation as an ‘ employer of fi rst choice for all people ’ ( Wegmans, 2007 ). Wegmans ’ extensive employee orientation, training, fl exible work scheduling and reward programs ensure knowledgeable and friendly employees that competently interact with customers at the store level. Wegman ’ s motto is ‘ employ-ees fi rst, customers second ’ , and its favorable corporate reputation is an intangible asset that likely contributes to its fi nancial achievements (eg, 2005 $ 3.8bn revenue).

Google earned the number 2 corporate reputation ranking ( Harris Interactive, 2008 ), and the number 1 ranking on Fortune ’ s best companies to work for list in 2007. Google set the standard for workplace environments designed to foster employee productivity, loyalty and creativity. Google offers free gourmet meals, a swimming spa, free onsite doctors, and employees are allotted generous time to develop and implement new and independent projects. Within its industry, Google experiences extraordinarily low employee turn-over, an indication of high employee emotional appeal. Google receives 100,000 resumes monthly, which indicates that potential employees also believe that Google is a desirable place to work ( Hansell, 2007 ). Google has also experienced consid-erable fi nancial growth. Assisted by HR as an employee champion, Google also offers new products at an outstanding rate (eg, web sites and services). These new products offer employees developmental opportunities and career mobility.

The employee champion role is not lim-ited to providing training and development opportunities within the organization. Pfi zer Pharmaceuticals created their Global Health Fellows (GHF) program that links corporate strategic goals and employee desire to vol-unteer their time to worthy causes ( Vian et al. , 2007 ). On a global scale, GHF matches



employees with charitable and volunteer opportunities that improve health in develop-ing countries. Since 2003, the program has fi elded 150 employees in volunteer positions in 31 countries ( Pfi zer, 2008 ). Employees that participated in the program reported that their professional and personal goals were met, mainly to help the poor and achieve personal growth. HR contributed to the program by matching employees to programs. Once again, GHF is publicized to external stakeholders via the corporate website and through public relations com-munications ( Pfi zer, 2008 ).

FedEx was ranked within the top ten companies on corporate reputation from 2003 through 2005 ( Harris Interactive, 2007 ), and Fortune ranked FedEx number 6 on its most admired list in 2007 ( Fortune Datastore, 2007 ). FedEx offers their employ-ees a fl exible benefi ts plan whereby employ-ees choose health, life, retirement, tuition assistance, employee stock purchase and glo-bal travel options customized to their needs.

The employee champion role fosters employee growth and advancement oppor-tunities by implementing training and de-velopment programs. Initially benefi ting employees, these training processes can be offered to others external to the organiza-tion. Krell (2001) argues that training can be leveraged externally to increase customer satisfaction, develop business partnerships and increase profi tability. Companies such as Microsoft and Cisco have capitalized on its training competence by offering training programs to their customers ( Mathis and Jackson, 2008 ). Training can be either stand alone programs or can be bundled with products or service offerings. Xerox Corpo-ration has long offered its customers com-prehensive training in order to differentiate itself from its competitors. The training is intended to build customer loyalty, increase revenue and enhance corporate reputation. Training is bundled with product offerings, and includes interactive seminars, classes,

online information and even a digital uni-versity program. Customer training curricu-lum includes workfl ow analysis, technical training, database assistance and business planning ( Xerox, 2007 ). Other training programs, once offered to only Xerox employees, have been effectively marketed externally (eg, Professional Selling Skills and various management development pro-grams). AT & T bundles a training fee into their services, but views its training offerings as a means to facilitate long-term business relationships ( Krell, 2001 ). Training can therefore be transformed from a cost to a source of revenue as organizations charge a fee for their training services, or simply as a means of gaining competitive advantage.

IMPLICATIONS The HR function can positively infl uence corporate reputation in signifi cant ways. As an internal support function, HR must col-laborate with leadership and other functions to infl uence corporate reputation. For ex-ample, HR must collaborate closely with corporate communications so that internal employee communications and information provided to the public by the public rela-tions function are consistent. Fombrun and van Riel (2004) highlighted the importance of other functions when managing corporate reputation. According to these authors, the dialog with external stakeholders must be coupled with employee coaching in order to establish an integrated communication system that enhances corporate reputation. The HR infl uence is indirect through em-ployees that interact with the public or through high product quality.

Lockwood (2004) identifi es three areas where HR impacts social responsibility (an aspect of corporate reputation): ethics, employment practices and community in-volvement. Partnering with leadership, HR can establish policies and procedures so that employees behave ethically with consumers, regulators and other external stakeholders.

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Employment practices include effi cient and effective recruitment, selection, compensa-tion, training and other HR practices that increase workplace quality and make an organization an employer of choice. Finally, Lockwood (2004) described community in-volvement as ‘ fostering an open relationship that is sensitive to community culture and needs and plays a proactive, cooperative and collaborative role to make the community a better place to live and conduct business ’ . As the competition for the best human cap-ital continues to increase and skilled labor becomes scarce, organizations with positive corporate reputations will be at a competi-tive advantage to attract needed talent ( Fox, 2007b ).

In order to be a strategic partner, HR must be positioned at a high organizational level. Access to top leadership enables HR to infl uence organizational strategy, and steer resource allocation toward initiatives that impact external stakeholders ’ assessment of corporate reputation. The measurement of HRM practices on organizational results has at times been inadequate, resulting in reduced infl uence on organizational out-comes ( Becker et al. , 2001 ). Like any other investment, initiatives designed to enhance corporate reputation through increased em-ployee competency or improved products must demonstrate a ROI that justifi es the time, staff and capital invested. Ulrich and Smallwood (2005) suggest that a new HR ROI be established: return on intangibles. This form of ROI requires that HR manag-ers understand their external investors ’ per-spective. For example, HR should consider criteria investors would use to select, train and reward employees. These criteria would help HR design employee selection, training and reward systems ( Ulrich and Smallwood, 2005 ). HR managers must also learn the language of money to a greater extent: their organization ’ s balance sheet, scorecard and important business metrics must be clearly understood and examined in order to link

HR initiatives with corporate reputation and fi nancial results. Strategic partnerships between HRM, fi nance and accounting personnel are important in this context.

HR managers should audit their own function to determine the extent that its ac-tivities contribute to corporate reputation. HR should identify key stakeholders, how they assess corporate reputation, prioritize initiatives such as training and compensa-tion, set goals to improve reputation, and monitor progress toward improved corporate reputation. Similar to Cynthia McCague ’ s strategy at Coca-Cola, HR managers elsewhere should invite employees and managers to help formulate strategies that increase reputation and results.

HRM and corporate reputation relation-ships have implications for the education, selection and development of HR profes-sionals. Higher education curricula need to produce well rounded HR professions that understand the business and its marketplace ( Ulrich and Brockbank, 2005 ). All HR pro-fessionals should demonstrate competence in marketing, communication and fi nance so that they understand their organization ’ s marketplace and how it brings value to cus-tomers. In addition to basic knowledge of business processes, business acumen should be a selection criterion for HR professionals. Lockwood (2007b) argues that HR and business education should be linked. Ac-cording to Lawler et al. (2006) , HR profes-sionals need to develop the following competencies in order to implement the strategic partner role: business understand-ing, strategic planning, organizational de-sign, change management, cross functional experience, global understanding and com-munication. When HR professionals join organizations, a developmental action plan should be determined to help HR profes-sionals align HRM with corporate reputa-tion and business objectives.

Corporate reputation should be consid-ered during the strategic planning process,



as reputations provide predictions as to how organizations will behave in different situa-tions ( Clardy, 2005 ). Fox (2007b) argued that the new wave of corporate social re-sponsibility requires that organizations inte-grate their charitable activities closely with their organizational mission and core capa-bilities. Stakeholders increasingly expect that corporations be socially responsible. An ex-ample of developing trust occurred when Tylenol pulled all of its products off the shelf following an incident with product tamper-ing in 1982. Johnson & Johnson ’ s swift response to the tampering issue fostered a reputation for consumer safety and corporate responsibility. Consumers are likely to be-lieve that Johnson & Johnson will act to prevent future occurrences and react respon-sibly should a similar crisis occur in the fu-ture. In a similar fashion, Starbucks has a reputation for treating and compensating its employees (internal partners) fairly, and ap-plicants can predict that Starbucks is likely to continue doing so in the future. Corpo-rate reputation may be considered a com-ponent of organizational culture, that is, beliefs and values that employees share about their organization and that infl uence their behavior. As reputations can be positive or negative, corporate reputation can establish a corporate culture that either supports or-ganizational objectives or serves as barrier to goal attainment. HR managers must work with leadership to create a positive corporate reputation that will help attract, retain and motive valued human capital.

CONCLUSION Effective implementation of the strategic partner, change agent, administrative expert and employee champion HRM roles can indirectly enhance corporate reputation, an important organizational intangible asset. HRM indirectly infl uences corporate repu-tation through increased employee compe-tencies, motivation and organizational identifi cation. Employees then interact with

external stakeholders in ways that foster corporate reputation. A revised conceptual framework is offered based on corporate reputation research ( Fombrun and van Riel, 2004 ) and HRM roles (Ulrich, 1997). This conceptual framework provides a useful framework for future research that addresses linkages between organization characteris-tics, HR roles, employee attitudes and cor-porate reputation. The conceptual framework also provides guidelines to HR managers as they strive to indirectly contribute to their organization ’ s positive corporate reputation. To positively impact their corporation ’ s reputation, these guidelines suggest that HR managers need to occupy an infl uential po-sition in the organizational structure, par-ticipate in strategic planning and develop effi cient organizational practices that are aligned with corporate reputation goals.

NOTES 1 An earlier version of this article was presented at

The Association on Employment Practices and Principles Fifteenth Annual International Confer-ence, Fort Lauderdale, Florida, 5 October, 2007.

2 The author wishes to thank an anonymous reviewer for suggesting this model.

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Human Resource Management Role Implications for Corporate Reputation