Branding and people management

In the so-called 'weightless economy', brand has become the critical source of competitive advantage for many organisations. The production of physical output is not as important for these businesses as managing the brand concept. So, what does this shift in emphasis for organisations mean to the way that people are managed and developed, and what role should the HR function play in the brand management process?

This bulletin summarises the CIPD Research Report, Branding and people management: what's in a name?, which explores the relationship between branding and people management.

The study was designed to fill the gap in existing research in this area, which largely does not consider in detail the importance of people management and development policies and practices in promoting and sustaining brands. It draws together common messages from a wealth of literature across different disciplines to provide an evidence-led argument for the crucial role that people strategies can play in managing brand. It looks beyond the concept of 'employer of choice' to help people management and development specialists better understand the brand management process and their critical part in managing brand.

The varying definitions of brand illustrated in the report show the importance that has been attributed to the internal, as well as external, role of brand. The shift away from product brand towards corporate-level brand and corporate reputation management has increased the need for people management issues to be taken into account in the branding process.

What is employment branding?

The research was undertaken on behalf of the CIPD by Dr Graeme Martin, Heriot-Watt University, and Professor Phillip Beaumont, University of Glasgow. They draw on academic and practitioner work to draw together links between the externally-oriented marketing research and internally-oriented management literature.

Culture of excellence

Recent work in the 'culture of excellence' school of thought, (which began with In Search of Excellence by Peters and Waterman (1982)), shows the importance of the alignment of senior management's vision for the organisation with that understood by employees. It also stresses the need for organisations to apply consistently the values extolled by their brand, and for their external image to match that aspired to by senior managers.

Strategic management

The strategic management literature, or 'resource-based view' of the firm, argues that organisations gain competitive advantage through their unique combination of resources - which cannot be copied - with people as the most important asset. Most recently, work in this field has focused on core competencies and the balanced scorecard approach, which has stressed the need to balance the satisfaction of external demands and the management of internal processes and people. This illustrates the importance of linking external marketing needs with people management and development, as illustrated by the employee-customer-service-profit chain. Employee behaviour is thus shown to play a critical role in promoting brand loyalty.

Employer of choice

Literature on the 'employer of choice' became more popular in the 1990s as the 'war for talent' hit the headlines. The 'employer of choice' concept was based on research concerned with the psychological contract - the unwritten promises and expectations that form the basis of the employment relationship. An understanding of this idea has led to some organisations reviewing their commitment to staff and the values on which the employment relationship is based.

Employment branding

The research on employment branding is concerned with the need for employees to 'live the brand'. This is centred on engaging employee loyalty to the brand and developing commitment to the organisation. The report argues that it is critical for the HR function to develop a compelling story for existing and potential employees about working for the organisation.

Branding in practice

The two case studies, Agilent Technologies and Abbey National Group, showed clearly that there is no one best way of managing brand and people. Different relationships between the two are required for different contexts. They also demonstrate that developing an 'employer of choice' strategy can have enormous benefits in terms of employee commitment and alignment behind the brand.

The success of the policies pursued by Agilent Technologies illustrates the advantages of consistently applying values in good and bad economic conditions. Agilent argues that this has been achieved through an 'employer of choice' policy that goes beyond the recruitment stage to incorporate terms and conditions and a strong commitment to training and development. And Agilent has managed to maintain its position as an employer of choice, despite having to make pay cuts and redundancies, as shown by its rankings in the Sunday Times and Fortune's 'best companies to work for' lists in 2002.

In Abbey National, the HR team is responsible for considering the relationship between branding and people management. The Abbey National Group has developed an employment proposition that is based on the principle that all employees are partners in the business. This proposition includes offering flexible and family-friendly working and external initiatives focused on the wider community.

However, the authors argue that the relevance of HR for managing brand will vary according to organisational context. This is illustrated in Figure 1.

Figure 1: A stage model of the relationship between branding and HR

Conclusions

The report concludes that HR strategies are intimately linked to how brand - particularly at the corporate level - is valued by customers and employees. These strategies include the extent to which the organisation sees its workforce as a driver of business success, how successfully it seeks to be an employer of choice, and how effectively it communicates the employer brand identity to its employees. The report stresses that the relationship between HR and corporate brand is mediated by the extent to which employees perceive the brand proposition to match reality, and by the brand reputation, that is, the past ability of the company to deliver its promised outcomes.

The report stresses that appropriate people management and development policies and practices are positively linked to strong brands, particularly at a corporate level. Brand performance is strongly influenced by people management and development strategies, through the consistent pursuit of 'employer of choice' policies and the successful communication of an employment proposition to the workforce. However, this relationship is adversely affected by any incongruence between brand identity and employees' perception of the reality of the brand, and the brand's reputation.

The report outlines stages of development in the brand and HR relationship, starting from branding as a logo for products or services (Stage 1), with little or no input from the HR function, to corporate brand at the centre of strategy, with HR in a pivotal role (Stage 4). A new language of branding and people management and development does not offer radical solutions to organisational problems, but it can lead to a new way for HR professionals to engage in the development of business strategy in their organisations.

This research will help people management and development professionals to engage in the strategic debate on brand management in their organisations, and to understand the key role they can play in developing and promoting brand. The brand concept is unlikely to be short-lived, and its prominence in organisational strategy clearly has implications for people management and development.

MARTIN, G. and BEAUMONT, P. (2003) Branding and people management: what's in a name? Research report. London: CIPD.

This report is now out of print, but is available for loan to CIPD members from our Library.

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