Professional Documents
Culture Documents
Employer
branding and
total reward
Conclusion 15
References 16
This report provides a holistic view of the areas It goes beyond standard remuneration by embracing
to consider when looking at the links between the company culture and is aimed at giving all
employer branding and total reward. It can be used employees a voice in the operation, with the
to help HR, reward and branding professionals employer in return receiving an engaged employee
develop their own employer branding offering performance.
that links strongly to their organisations reward
approach. The CIPD Reward Management survey report (CIPD,
2008b) found concern among employers as to
It can be used by you to gain buy-in from other how reward and recognition policies support their
members of staff and develop cross-functional employer brand. Hence, our research partnership
working relationships focused on ensuring these focused on the following question: What are the
concepts mutually support one another throughout links between employer branding and total reward
the business. This report can help you navigate your within organisations?
way during economic recovery by offering examples
of ways in which remaining true to your employer Research methodolgy
branding and reward strategy can help to position The research project consisted of two phases. The
your company positively for the upturn. first phase collected data from 44 organisations
during May and June 2009 using a web-based
This report is based on in-depth interviews with questionnaire. The results from our first phase
nine interviews carried out between August and of research can be found on the CIPD website.
September 2009. Headline findings are shown below:
In this report, what do we mean by employer Nearly 90% of organisations have an employer
branding? The CIPD defines the employer brand as brand or plan to within six months.
a set of attributes and qualities often intangible Fifty-seven per cent of respondents developed
that makes an organisation distinctive, promises their employer brand to support their employee
a particular kind of employment experience, and value proposition (what an organisation stands
appeals to those people who will thrive and perform for, requires and offers as an employer).
best in its culture. Seventy per cent of senior leadership understand
and 49% value the employer brand, compared
Specifically, organisations that have a strong and with 10% and 20% of employees/potential
attractive employer brand: employees, respectively.
Almost half of respondents felt a positive or
can use it to help them produce in turn a more negative effect of the recession on their employer
engaged workforce who live the brand and in brand, for example it either offered them an
turn reduce the costs of employee turnover unrivalled selling point versus it was compromised
are likely to perform better, have higher by reduced engagement, retention and reward.
attendance levels and deliver a more positive
customer experience. The findings provided a general understanding
of the current employer branding and reward
What do we mean by total reward? The CIPD environment (CIPD and Mercer 2009) and supported
defines total reward as a reward strategy that the second phase of our research.
brings additional components such as learning
and development, together with aspects of the
working environment, into the benefits package.
There are many benefits that can be derived 2 Rewarding desirable behaviours
from having a compelling employer brand that is The most effective way rewards can support
supported by employee rewards, according to our employer branding is through rewarding desired
interviewees. Engagement can be enhanced by a behaviours. Often defined in a companys values,
brand that is demonstrably aligned to rewards as it these behaviours can create a clear identity for
provides an opportunity for companies to put their employees and support a positive customer
money where their mouth is in promoting desired experience that together reinforces the company
corporate behaviours and image. Engaged employees culture. Some companies, such as tw telecom,
who believe in the brand then promote this image directly link their values within their performance
more effectively to customers. In our interviews, four management system as a means to communicate
key approaches to strengthening the link between the employer brand and support employees
employer branding and reward emerged. understanding of the line of sight between their
performance, their reward and the company. For
1 Employee value proposition such organisations, employer branding becomes
The employers we have talked to acknowledge that part of the deeper culture of the organisation, for
reward can influence employee behaviours, therefore example Bacardis values define the work culture,
encouraging the right behaviours can strengthen which is essentially the employer brand they market
the employer brand. There is no point in paying for during recruitment. What constitutes exceptional
X while hoping for Y; an employer brand that isnt behaviour or living the values is included in the
supported by rewards can be perceived as little more performance management system and therefore
than empty words. In this approach, the employer influences opportunities for development.
brand sets out the value proposition, outlining what
the organisation stands for and its reward philosophy. 3 Communication
It defines the deal between employer and employee Effective communication of reward packages is a
and hence influences the psychological contract. At key way to reinforce the employer brand as it raises
McDonalds, for example, to prevent its employer awareness to potential and existing employees
branding proposition from becoming an empty of the benefits of working for the company. For
marketing campaign, it is supported by their reward example, McDonalds was already investing heavily
practices. in its people, therefore its branding work focused
on communicating this investment to strengthen
Organisations with an established, well-defined the employer brand both internally and externally.
employer brand are already using total rewards to Numerous media are used to communicate the links
demonstrate the corporate culture to current and between reward and employer branding. The most
potential employees. For example, tw telecom common of these are: the Internet and intranet
has aligned incentives, performance-based equity sites; employee induction booklets; job descriptions/
grants, traditional benefit programmes, wellness advertisements and newsletters (CIPD and Mercer
programmes, and learning and development 2009). Effective communication from line managers,
opportunities to its employer brand and believes this however, is considered to be most important.
alignment has also been achieved via its performance
management system. Customer service firms within
our sample have achieved an advanced alignment
between employer branding and reward. We suggest
that this is due to the need to make a strong first
impression and build relationships quickly, particularly
during the current economic climate.
Almost half of companies in this research believe research of the various ways in which employer
there is a strong link between their employer brand branding and total reward have been successfully
and rewards. Some believe compensation and linked. These have been included in the context of
benefits should have their own reward brand. Mercers Total Reward Model to illustrate the role of
Provided below are some examples from our each element discussed in the wider reward context.
Source: Mercer
Compensation
The interviews highlight that for many organisations these industries, the importance of looking at the
cash is still king when it comes to attracting, retaining whole rewards package was highlighted rather
and motivating employees. Even for organisations that than looking at pay in isolation.
state that pay does not overtly support the employer
proposition, most agree that pay needs to be at the Bonuses can support the brand in three key
right level to ensure that people want to work and ways. First, bonuses can enable organisations to
come to work for the company. Therefore, while stay aligned with competitor reward packages.
getting pay positioning right may not necessarily This is particularly true in the financial services
enhance the brand, getting it wrong can be damaging: and re-insurance companies where bonuses are
central to the psychological contract. Second,
Pay is often viewed differently across industries. bonuses can link rewards directly to financial
For example, charities pay competitively to get performance, which reduces risk to the firm and
people through the door, but rely on other aligns employees with stakeholders. However,
benefits of working for such an organisation to some employers also use bonuses to reward
retain them, such as development opportunities employees for demonstrating behaviours that
and a positive working environment. Alternatively, support the company values.
for organisations in industries that are more
financially focused, pay is at the heart of the For example, at Malmaison and Hotel du Vin
employee value proposition and top quartile pay everything we do links back. Bonuses encourage
is required to retain employees. However, even in excellence and positive employee behaviour, which
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Ensure that senior employees and, where HR can use the firms internal marketing and/or
appropriate, junior employees buy in to the press department for ideas on how to sell the
employer brand. HR needs to contribute to the brand and engage individuals. It can also make
wider business issues and communicate the entire use of the various CIPD resources concerning
package to all employees. employer branding (see page 16).
Where cultural changes are taking place, help To help HR approach these tasks effectively, we
employees understand and accept the change have provided below a list of HR practitioner
using clear and honest communication and key skills and capabilities described in our
offer the chance for them to provide feedback case studies that HR should hold if they are to
during the process. This can help involve them successfully develop, implement and maintain
in the process and maintain levels of employee an employer brand. The skills identified are:
engagement. affiliation to the business; commercial link
to the business; understanding of what
Make the most of the programmes you already differentiates the business; marketing (connect
have in place and focus resources on those business needs and aims); business acumen;
elements that will have the greatest impact on change management/adaptability; knowledge
the brand. Leveraging existing reward policies of employee experience and judgement;
that are likely to be well established among and the ability to communicate/translate the
employees helps to create stability and enhances employer brand to employees.
understanding while implementing change. Often
it is the small and cheaper elements of total
reward, such as recognition programmes, that
can have the highest impact on the brand.
1 Preparing for the economic recovery At Bacardi, knowing the company has invested in
The recent recession has necessitated reducing them is making employees feel more motivated,
reward levels for employees in many companies. The which in turn promotes a positive employer
Mercer Salary Indicator survey (Mercer 2010) showed brand. An aligned employer brand will also
that more than half of organisations froze salaries in position Bacardi well for the upturn, since it will
2009 and the widespread use of pay freezes has also enable it to communicate its messages both
been found in the CIPD Reward Management survey powerfully and honestly.
report (CIPD 2009) and Employee Pay Attitudes
survey (CIPD 2010b). This inevitably has an effect on While Malmaison and Hotel du Vin has had to
employee engagement. The majority of companies make salary and bonus freezes like many other
in this report said that the impact of the downturn employers, it believes what sets it apart is the
to date had not had a major negative impact focus on the future. It communicates to its staff
on them, due to them being in relatively stable that if they all work hard, achieve every sales
industries. However, just under half of the companies opportunity and deliver amazing hospitality while
interviewed have felt a direct impact of the current keeping a lid on what is being spent, then they
recession on the amount of money available to spend will share in the success of the firm. Rather than
on reward and the value of long-term incentive focusing on redundancies and there being fewer
awards and pensions. While these companies have workers, the firm emphasises that there is more
put a hold on, for the immediate future, any pay opportunity for job enlargement and job sharing.
reviews or reward design changes, they are still
making efforts to limit the impact on employees and While these approaches have worked for Bacardi
maintain levels of investment in such programmes and, Malmaison and Hotel du Vin, it is important
as learning and development. This, they hope, will to remember that, during turbulent times, any
maintain the strength of the employer brand in the changes must be in line with your unique business
long term. strategy. Sometimes, redundancies may be
unavoidable in order to maintain business success
The CIPDs Employee Outlook survey (CIPD 2010a) and the employer brand in the longer term.
identified that during the last quarter of 2009 fewer
than half of employees felt fully/fairly well informed 2 Resistance to change
about what was happening in their organisation In any major organisational change, there is likely
and that job satisfaction had decreased across all to be some resistance and difficulty in meeting
organisation sizes and sectors. With a third of the employee expectations. However, involving
respondents also reporting redundancies and a employees in the decision-making process can help
quarter having cut back on training opportunities them feel more involved in the change and believe
in response to the recent recession, employers will that their contribution is being recognised.
need to ensure staff motivation levels are maintained
and, if necessary, stabilised during 2010. The
key challenge for employers now is to retain key
talent during the upturn and rewarding positive
behaviours helps retain talent in a recovering job
market and improves and enhances productivity and
engagement. The employer brand also helps create
trust, which can make selling any potential changes
to those who will be affected easier:
All participants in this research agree that aligning Branding and reward should be mutually
rewards with the employer brand can help in supportive, emphasising the need to get the
attracting, retaining and motivating staff. Such initial alignment correct and ensuring authenticity
alignment can demonstrate the employers financial within the organisation. Aligning employer brand
commitment to the employer proposition, which with reward can help companies meet employee
in turn assists in fostering a positive employee expectations, from attracting them into the
experience. Some companies in this study have made company to developing trust and commitment
a conscious effort to demonstrate the alignment of during their careers. During future research it would
total rewards to their employer brand, often as part be interesting to determine whether there was a
of a branding campaign, for example McDonalds difference between organisations hiring temporary
and Malmaison and Hotel du Vin. versus those hiring permanent staff with regards to
the employers focus on employer branding and its
However, our research indicates that many other alignment with total reward.
employers struggle to develop a link with their
employer brand. The research team spent a Overall, it would appear that while many
long time trying to identify possible case study organisations aspire to clearly align employer
organisations for this study, which indicates just how branding and total reward, for some the journey has
few employers at the time were working at aligning only just begun.
their reward approach and employer brand.
The CIPD and Mercer would like to thank all
While most organisations do not have an respondents for their participation in this key
established employer brand, in such a situation piece of research.
the current reward programmes can help play a
key role in developing and communicating what
the organisation is trying to achieve through its
employer brand.
CIPD. (2008a) Employer branding: your online CIPD. (2010b) Pay management (UK) survey:
companion for the journey. Practical tool. London: employee pay attitudes. Survey report. London:
Chartered Institute of Personnel and Development. Chartered Institute of Personnel and Development.
[Accessed 10 March 2010]. [Accessed 10 March 2010].
CIPD. (2008b) Reward management. Survey report. CIPD and Mercer. (2009) Employer branding and
London: Chartered Institute of Personnel and reward research summary. Survey report. London:
Development. [Accessed 10 March 2010]. Chartered Institute of Personnel and Development.
[Accessed 10 March 2010].
CIPD. (2009) Reward management. Survey report.
London: Chartered Institute of Personnel and Mercer. (2010) Mercer Q4 salary indicator survey
Development. [Accessed 10 March 2010]. [Accessed 31 March 2010].
Further reading
CIPD. (2007) Employer branding: a no-nonsense approach. Guide. London. Chartered Institute of Personnel and
Development. [Accessed 10 March 2010].
CIPD. (2007) Employer branding: the latest fad or the future of HR. Research insight. London. Chartered Institute
of Personnel and Development. [Accessed 10 March 2010].
CIPD. (2009) Employer branding: maintaining momentum in a recession. Guide. London: Chartered Institute of
Personnel and Development. [Accessed 10 March 2010].
CIPD. (2009) The impact of mergers and acquisitions on employer brands. Research summary. London:
Chartered Institute of Personnel and Development. [Accessed 10 March 2010].
CIPD. (2010) Your employer brand: keeping it real through mergers and acquisitions. Practical tool. London:
Chartered Institute of Personnel and Development. [Accessed 10 March 2010].
CIPD. (2010) Employer brand. Factsheet. London: Chartered Institute of Personnel and Development.
[Accessed 10 March 2010].
Defining what it is we want to sell externally to The company continually works to support its
new applicants who want to join the organisation brand in the marketplace and the role employees
in our recruitment but it is also about selling play in delivering on the promise of the brand.
ourselves internally this is the part which is key
to us at the moment. Defining what we want to
be as an employer, how wed like to let staff know
about that and ensuring that we measure up to
that. We do what we say were doing.
www.mercer.com