Growing the employee brand at ASI: a case study.

The employee brand is the image presented to an organization's customers and other relevant stakeholders through its employees. The employee branding process is predicated on achieving and maintaining message consistency throughout the organization. Messages emanate from various organizational sources such as the systems of organizational staffing, performance management, and compensation. Each message should reflect and reinforce the organization's desired brand image which, in turn, should be consistent with the organization's mission and values. When this happens, both the psychological contract and employee brand knowledge is effectively managed, resulting in a brand image that is consistent with the organization's desired brand image. The development of the employee brand through the employee branding process can provide a source of sustainable competitive advantage for the organization. This case study is designed to be used as a teaching tool for understanding the complexity of the process and providing guidance for growing the employee brand.

Keywords: employee branding; internal marketing; internal branding; psychological contract; competitive advantage

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Melissa Thomas sat at her desk writing a first draft of her comprehensive report to the executive team outlining the course of action that would help grow the employee brand at ASI. ASI, a premier audio system manufacturer, was far different from her previous employer. The owner and president of ASI was insistent on producing a quality product and providing an exceptional quality customer experience reflecting the organization's values and mission. In fact, the stated corporate goal was "to exceed our customer's expectations for the value of our products regarding quality, reliability, service, and usefulness." In such a competitive market, the president knew and understood the competitive advantage employees can offer--especially when customer experience is coupled with a quality product. This dual goal led the executive team to hire Melissa to help the business continue to grow as it has done for the past 17 years. As the first employee hired exclusively to orchestrate the human resource management activities, she knew this would be a challenging assignment.

ASI Past and Present

The vision for ASI really didn't take hold until 2 years after Mike completed a customized sound system for the church he attended. An electrical engineer for a major company by day, he dabbled in audio electronics as a hobbyist by night. When Mike's church started a remodeling project on a very tight budget, Mike volunteered his services to customize the unique audio requirements of the church. This successful installation led several other parishioners to ask for Mike's help in designing customized audio systems that were able to meet theft unique requirements. The nature of these projects varied in budget and scope. Some were for internal sound systems and others were for external systems. Each project was unique and required a unique solution. After 2 years, Mike decided to quit his job and grow his hobby into a business. He mapped out a business plan and decided to offer a range of commercial, customizable audio systems designed to deliver audio in either indoor or outdoor settings to audiences ranging from a few to thousands.

Currently ASI has a state-of-the-art manufacturing facility in Jackson, Kentucky. It is known for its high-quality audio systems as well as cost efficiency, which allows the savings to be passed on to customers in the form of lower prices. It employs 37 people, including 3 supervisors, in the manufacturing facility. In addition, ASI has 28 people in the front office, including the telemarketing staff, audio designers, supervisors, and the executive team. The executive team consists of Mike, the founder and major share holder; his son Tom, President; Debbie, Director of Marketing; Jan, Manager of Accounting (and formerly Human Resources); and now Melissa, Director of Human Resource Management.

The executive team made it very clear to Melissa that the primary reason she was offered the Director position in Human Resources is her background in employee branding. They were convinced that if they were to succeed in this highly competitive market with a direct-to-the-customer distribution system, they would need to couple their quality product with outstanding customer interactions. ASI's success or failure depended largely on what happened at the point of employee--customer interface. The organization currently enjoyed high morale, low turnover, high levels of performance, and outstanding customer relations as measured by several external indicators. However, with projected sales at an all-time high, the team knew its employees were the key to continued success. As such, the primary reason the executive team decided to hire a Director of Human Resources was to continue to grow the organization's human element to reflect the organization's mission and values.

Melissa understood and appreciated the executive team's goal for growing the business inside as well as out. She was also very comfortable with the openness of the team and its receptiveness to a thorough analysis and examination of the internal processes and systems. This commitment allowed her relatively easy access in conducting a message audit. In her first meeting with the executive team, she articulated the critical importance of the mission and values and the creation of a desired brand image. In essence, the mission and values needed to be ASI's driving force in determining its desired brand image as well as the basis for all messages emanating from all organizational systems. These messages influence the employee's knowledge of the desired brand image and ultimately influence the psychological contract. Although the psychological contract was a relatively new concept for the executive team, they quickly understood how this perceptual agreement originates and influences the employment relationship as well as the negative consequences if it is not managed.

It is with this understanding that Melissa led the team in generating a plan to continue to grow the employee brand into a sustainable competitive advantage for ASI. Their approach was based on a review of the academic literature pertaining to the employee brand and the process by which the employee brand was developed (Mangold & Miles, in press; Miles & Mangold, 2004, 2005). In this quest, the executive team was convinced it needed to focus on ensuring that the desired brand image would be effectively communicated and reinforced throughout the organization on a continuous basis. Melissa and her team perceived that to accomplish this, they needed to know the extent to which current operations were consistent with the stated values and mission. Then they would develop a plan to orchestrate the various organizational message systems for consistency.

This approach was based on the premise, indicated in the academic literature they had studied, that organizations consist of a series of message systems. For example, the system by which organizational staffing is accomplished comprises one message system. Messages communicated through that system include those that are written and those that are spoken. They also include the signals that are sent through the decisions emanating from the system itself. For instance, the characteristics of the people who are recruited and hired send strong messages about what is valued by the organization (e.g., skill levels, motivation to accomplish specific tasks, etc.). Other organizational message systems include the training and development system, the performance management system, the compensation system, the employee communications and public relations system, the organization's culture and leadership, and the processes by which decisions are made as well as the decisions themselves.

Melissa and her team drafted a plan by which the message audit would be conducted. It would determine if organizational messages, actions, and processes were consistent with ASI's stated values and mission. The steps involved in conducting a message audit are outlined in Figure 1.

[FIGURE 1 OMITTED]

Melissa prepared the first four sections of the plan and presented it to the team at an afternoon meeting. The information gathered was based on corporate information in conjunction with observations and an employee survey that measured the extent to which employees perceived that the organization's stated values and mission were actually reflected in the organizational process as they experienced them. Below is a presentation of the information she gathered, organized according to the steps outlined in Figure 1.

Identify Organizational Mission and Values

The first step in the audit was to revisit the organization's mission and values statement. A formal statement of ASI's mission and values is presented in Table 1. Consistent with Melissa's observations, "defect free" is a cornerstone of the organization's belief systems and is closely intertwined with its six sigma standards and ISO credentialing. Like many organizations, ASI's focus on defect-free products also extends to continuous improvement through continuous learning and a philosophy of excellence in its sales and customer service operations. However, ASI takes the idea of defect free farther than many companies do by focusing on internal interactions among coworkers as well as between employees and managers. ASI defines the values that underlie defect-free interactions with one another to include respect for others, open communication, teamwork, integrity, attention to detail, and conscientiousness.

Articulate a Desired Brand Image

The desired brand image is the image organizations want their customers to experience. Melissa knew that in organizations such as ASI, where there is an extensive employee--customer interface, employees hold the key to ensuring that customers experience the desired brand image. She also knew how important it was to articulate that image because it would be the foundation on which all organizational messages would be based.

ASI, like many other organizations, really didn't have a formally stated desired brand image. Other than the mission and values statement, there were no formal documents that clearly articulated the desired brand image that customers were to experience in their interactions with ASI. Based on the information at hand, Melissa proposed a desired brand image to the team. After a considerable amount of debate and discussion, Melissa and the executive team arrived at the following definition of the organization's desired brand image:

We at ASI strive to deliver to our customers the best

transactions they have ever had and to deliver to our

coworkers the best interactions they have ever had.

We exceed the expectations of others by being positive,

competent, and self-motivated people who pay

attention to details and go the extra mile for those

with whom we interact.

ASI's articulation of its desired brand image seemed sound to the executive team. It was reflective of the company's mission and values and provided solid guidance to employees at all levels of the organization as well as to the executive team.

Identify the Message Systems

Identifying the organizational systems from which messages are sent and received by employees constituted the next step in the message audit. Melissa knew it was critical to identify these systems because messages can be sent formally and informally and they emanate from both internal and external sources. Table 2 lists the organizational message systems that would be targeted for investigation. Identifying the message systems to be targeted was relatively easy. Analyzing the messages within those systems would be the challenge.

Assess Message Systems

Since Melissa's first day on the job, she had been observing the practices and procedures that were in place in the various human resource management systems. From her previous experience, Melissa knew this would be a very complex undertaking. There were three major assessments she needed to complete: First she would analyze the tools and processes that were used to communicate organizational messages. Then she would identify the values that were being communicated through the tools and processes. Finally, she would tap employees' perceptions to assess the extent to which they perceived the values to be present in the message systems. By looking at the sparse collection of human resource management documents available and informal conversations with management and factory personnel, she gleaned the following information.

Organizational Staffing

The hiring of individuals for both management and factory positions appears to reflect ASI's informal nature, which is not all that different from a lot of entrepreneurial companies. Factory workers are hired from walk-in applicants. Applications are filled out and basic skills tests are used to assess math and reading skills at a level necessary for the manufacturing facilities. Once the basics are covered, prospective employees are interviewed by two members of the executive team and hired if their skills appear to match the job opening. To date, ASI has been able to meet its labor demand by relying solely on this technique.

Management personnel are hired predominantly through networking. One of the most recent hires worked at Applebee's restaurant. Mike had dinner there and engaged the waiter in conversation. Mike was so impressed with him that he offered him a position at ASI. The marketing director was hired several years ago as a result of a class project she worked on while attending Jackson State University.

Training and Development

Training and development has been primarily the task of the supervisor. When new hires are made, the supervisors provide them with the training they need for the job. Any new skills the employee learns are also taught through supervisory training. Managers who wish to go to professional conferences must get Mike's or Tom's approval. Employees who increase their skill levels are promoted into positions with increased responsibility and compensation when the positions become available.

Performance Management

Performance management has been taken seriously at ASI. For both manufacturing and administrative positions, performance is measured through productivity matrixes. Objectives are set for the year and measured periodically. The extent to which employees meet their productivity goals contributes to their annual productivity score. This productivity score, in turn, determines the performance bonus they will receive at the end of the year. The objectives appear to be quantitatively clear and regarded as fair by supervisors and employees alike.

Compensation

ASI uses a skill-based pay system. Hourly workers earn between $10 and $12, depending on their job and accumulated skills. Permanent increases to base pay are based on a cost of living adjustment or contingent on proficiency in a new skill. Merit is rewarded through the performance bonus, based on the individual's productivity score as discussed above. These awards are annual in nature. This bonus plan has resulted in a substantial amount of compensation for its employees. The bonus plan can vary from no bonus if company profit goals are not met to a high of 30% of base wages if a specified company profit is achieved. On average, the company has paid bonuses of 9.3% of base wages, with a high of 25% and a low of 3%.

Employee Communications and Public Relations

Mike and Tom appear to have open communications with all employees. They spend a lot of time practicing management by walking around. Most communications occur informally or in small teams. When there is a need for organization-wide dispersion of information, a newsletter is put together. Newsletters are done on an as-needed basis rather than a specified time frame. Oftentimes, impromptu meetings are held and decisions made at the water cooler/coffee pot area. Employees are regularly kept informed about productivity reports and the extent to which they are achieving performance objectives.

Public relations efforts also reflect Mike and Tom's personal values. Employees are allowed to take 2 days a year to work on projects such as Habitat for Humanity. They also made a large contribution to help out with some of the families that were displaced by local tornadoes. They have also supported soccer and little league teams for employees who coached them. ASI appears to have a very favorable image in the surrounding community.

Culture

The culture at ASI is very informal and supportive. Any problems can be taken directly to the top if necessary. Mike and Tom are supportive of employees and their families. Meetings are scheduled for the workday, not on Saturdays or after hours. They have a system in which employees can recognize other employees for being extraordinarily helpful. The employee with the most nominations at the end of the month receives a $25 gift card to Outback Steakhouse. Employee birthdays are celebrated with doughnuts from the local bakery. A picnic is held for employees and their families once a year.

ASI is an organization in which few boundaries exist. Any employee can talk to Tom or Mike. Although they prefer issues be taken up with the immediate supervisor, they are not opposed to having a meeting to resolve the issue.

Leadership and Decision Making

Major decisions are made or approved by Mike and Tom. Smaller decisions are typically made by the area supervisor. Much collaboration occurs because of the informality of the culture. Melissa felt very comfortable with the amount of space and leeway Mike and Tom had afforded her in her assessment.

Decisions regarding capital projects are made by Mike and Tom. For instance, recent purchases enabled manufacturing to keep up with sales increases by assembling components more quickly. These plant upgrades and equipment purchases enabled the company to produce at lower costs. Those lower costs were then passed on to customers in the form of lower prices, thereby increasing demand for ASI products and services. The growth that was fueled by plant upgrades and new equipment purchases enabled ASI to add more employees and promote existing employees to more responsible positions and higher pay. Although these decisions were good, the executive team felt a little left out that they were not included in the decision process.

Melissa was able to gather quite a bit of information about the organization in a relatively short time period. She knew that her perceptions of the system only told half the story. The other side of the story would be reflected in gathering information regarding employee perceptions. The following section highlights the information she gathered in the last step assessing organizational message systems.

Employee Perceptions

The message audit was the third step in ASI's comprehensive assessment of its message systems. Each person working at ASI was asked to fill out a questionnaire containing 99 items measuring the degree to which each value was communicated through each message system. Responses were based on a 5-point Likert-type scale with answer categories of strongly agree, agree, neutral, disagree, and strongly disagree. For purposes of the message audit, the "defect-free interactions with one another" value was broken down into each of its components--respect for others, open communication, teamwork, integrity, attention to detail, and conscientiousness. The results of the survey are reported in Tables 3 and 4. Table 3 provides a summary of average scores by value. Table 4 provides means for individual items organized by value assessed. Melissa was relatively pleased with the overall data, although there were some indicators to mark trouble spots. She would have to monitor these systems very closely, along with employee perceptions, as she developed her plan to grow the employee brand.

Challenges Ahead

The big challenge for Melissa was to grow the employee brand along with the business so that ASI would continue benefiting from low turnover, high morale, and exceptional customer relations. Melissa was familiar with the employee branding process, so she knew she needed to develop and manage the organizational message systems. She also had to ensure that the systems grow the employee brand while ensuring that the processes were legally sound and scientifically based. As she developed her plan, she knew that any changes the organization made had to reflect the organization's values and mission and take its psychological contract with employees into account. She was confident that once the message systems were orchestrated to reflect the organization's values and mission, the organization would be able to achieve its dual goal of product quality and total customer satisfaction.

Melissa felt that the first step was to examine the extent to which each value was communicated by each organizational message system. For example, she asked herself, which message systems most effectively communicated the "attention to detail" value in Table 4? Which message systems least effectively communicated the value? She wondered if there were message systems that consistently ranked high or low in terms of the extent to which they communicated the various values. If a message system was found to rank consistently low, Melissa would need to work closely with ASI's employees and management to determine the underlying causes and the remedies that would be needed. In addition, she also needed to ensure that the systems were legally sound.

Authors' Note: Teaching notes are available upon request. Please send requests to Sandy.Miles@murraystate.edu. Please include your university affiliation and an office number. This will help to ensure the legitimacy of requests.

References

Mangold, W. G., & Miles, S. J. (in press). The employee brand: Is yours an all star? Business Horizons.

Miles, S. J., & Mangold, W. G. (2004). A conceptualization of the employee branding process. Journal of Relationship Marketing, 3 (2/3), 65-87.

Miles, S. J., & Mangold, W. G. (2005). Positioning Southwest Airlines through employee branding. Business Horizons, 48, 535-545.

Sandra Jeanquart Miles

W. Glynn Mangold

Murray State University

Sandra Jeanquart Miles, DBA, SPHR, is a professor of management in the Department of Management, Marketing, and Business Administration, College of Business and Public Affairs, Murray State University, Murray, KY 42071; e-mail: sandy.miles@murraystate.edu. She is certified as a Senior Professional of Human Resources by the Human Resource Certification Institute. She has published many articles pertaining to supervisory and subordinate relations and, most recently, the employee branding process. She has also held several leadership positions in the Midwest Academy of Management and the Society for Human Resource Management.

W. Glynn Mangold, PhD, is a professor of marketing in the Department of Management, Marketing, and Business Administration, College of Business and Public Affairs, Murray State University, Murray, KY 42071; e-mail: glynn.mangold@murraystate.edu. Whereas much of his research has focused on marketing of services, his academic interests are diverse, with more than 30 peer-reviewed publications to his credit. He has served as Editor of the Journal of Business and Public Affairs, Electronic Resources Editor for Marketing Education Review, and is a member of the editorial review board for Journal of Services Marketing as well as several other journal review boards. Table 1 ASI's Mission and Values Mission ASI will continuously improve its products and processes to exceed the expectations of its internal and external customers. We will deliver to those customers defect-free products and services on time, every time. Values

Defect-free products

Defect-free transactions

Defect-free interactions

Respect for others

Open communication

Teamwork

Integrity

Attention to detail

Conscientiousness

Continuous improvement through continuous learning Table 2 ASI's Organizational Message Systems Organizational staffing process Training process Performance appraisal process Compensation system Formal communications and public relations Corporate culture Leadership and decision making Table 3 Summary of Average Mean Scores by Value

Front Manufacturing

All Office Facility Value Employees Workers Workers Defect-free products 3.85 3.75 4.02 Attention to detail (component 3.81 3.74 3.96

of defect-free interactions

with one another) Defect-free interactions with 3.80 3.78 3.85

customers Conscientiousness (component of 3.75 3.72 3.85

defect-free interactions with

one another) Teamwork (component of 3.69 3.66 3.78

defect-free interactions with

one another) Continuous improvement through 3.65 3.64 3.68

continuous learning Integrity (component of 3.62 3.59 3.69

defect-free interactions with

one another) Respect for others (component 3.62 3.60 3.70

of defect-free interactions

with one another) Open communication (component of 3.48 3.38 3.65

defect-free interactions with

one another) Table 4 Mean Scores for Individual Items Organized by Value

Front Manufacturing

All Office Facility Value Employees Workers Workers Attention to detail

1. Training process 4.10 3.97 4.25

2. Supervisors encourage 4.07 3.97 4.26

employees to pay

attention to detail

3. Hiring process 4.05 3.97 4.18

4. Top management encourages 4.00 3.88 4.19

employees and supervisors

to pay attention to

detail

5. Performance appraisal 3.97 3.97 4.04

6. Supervisors pay attention 3.90 3.73 4.11

to detail

7. Coworkers 3.79 3.69 3.93

8. Newsletters and public 3.72 3.66 3.82

relations

9. Compensation system 3.56 3.38 3.82

10. Top management pays 3.54 3.50 3.65

attention to detail

11. Budget allocations 3.30 3.50 3.40

Average 3.81 3.74 3.96 Conscientiousness

12. Supervisors encourage 4.10 4.09 4.19

employees to work

conscientiously

13. Top management encourages 3.97 3.94 4.04

employees and supervisors

to work conscientiously

14. Training process 3.95 3.97 3.96

15. Performance appraisal 3.92 3.94 3.96

16. Hiring process 3.90 3.78 4.04

17. Supervisors work 3.82 3.69 4.04

conscientiously

18. Coworkers 3.72 3.56 3.93

19. Newsletters and public 3.70 3.66 3.79

relations

20. Top management works 3.69 3.60 3.81

conscientiously

21. Compensation system 3.48 3.44 3.61

22. Budget allocations 3.00 3.25 3.00

Average 3.75 3.72 3.85 Continuous improvement through continuous learning

23. Hiring process 3.89 3.91 3.86

24. Performance appraisal 3.88 3.97 3.81

25. Supervisors encourage 3.83 3.78 3.93

employees to continuously

improve through

continuous learning

26. Top management encourages 3.77 3.88 3.67

employees and supervisors

to continuously improve

through continuous

learning

27. Supervisors continuously 3.76 3.65 3.93

improve through

continuous learning

28. Coworkers 3.74 3.75 3.75

29. Training process 3.69 3.52 3.89

30. Newsletters and public 3.64 3.59 3.68

relations

31. Top management 3.58 3.59 3.59

continuously improves

through continuous

learning

32. Compensation system 3.38 3.23 3.61

33. Budget allocations 3.00 3.25 2.80

Average 3.65 3.64 3.68 Defect-free interactions with customers

34. Supervisors encourage 4.07 4.13 4.04

employees to strive for

defect-free interactions

with customers

35. Top management encourages 4.00 4.09 3.93

employees and supervisors

to strive for defect-free

interactions with

customers

36. Supervisors strive for 3.98 3.91 4.11

defect-free interactions

with customers

37. Hiring process 3.93 3.94 3.96

38. Top management strives 3.90 3.88 3.96

for defect-free

interactions with

customers

39. Coworkers 3.84 3.84 3.82

40. Training process 3.80 3.77 3.82

41. Performance appraisal 3.73 3.66 3.89

42. Newsletters and public 3.70 3.63 3.79

relations

43. Compensation system 3.45 3.26 3.71

44. Budget allocations 3.40 3.50 3.40

Average 3.80 3.78 3.85 Defect-free products

45. Supervisors encourage 4.23 4.22 4.30

employees to strive for

defect-free products

46. Hiring process 4.08 4.06 4.14

47. Supervisors strive for 4.03 3.87 4.26

defect-free products

48. Top management encourages 4.03 4.00 4.12

employees and supervisors

to strive for defect-free

products

49. Training process 3.95 3.74 4.21

50. Coworkers 3.92 3.78 4.07

51. Top management strives 3.88 3.68 4.15

for defect-free products

52. Performance appraisal 3.80 3.55 4.11

53. Newsletters and public 3.75 3.69 3.82

relations

54. Compensation system 3.46 3.16 3.86

55. Budget allocations 3.20 3.50 3.20

Average 3.85 3.75 4.02 Integrity

56. Supervisors encourage 3.85 3.75 4.00

employees to display

integrity

57. Hiring process 3.75 3.66 3.89

58. Training process 3.75 3.68 3.86

59. Top management encourages 3.68 3.75 3.63

employees and supervisors

to display integrity

60. Supervisors display 3.67 3.52 3.88

integrity

61. Coworkers 3.66 3.47 3.89

62. Top management displays 3.66 3.70 3.63

integrity

63. Newsletters and public 3.64 3.69 3.61

relations

64. Performance appraisal 3.58 3.53 3.70

65. Compensation system 3.38 3.28 3.54

66. Budget allocations 3.20 3.50 3.00

Average 3.62 3.59 3.69 Open communication

67. Supervisors encourage 3.73 3.50 4.04

employees to communicate

openly

68. Hiring process 3.72 3.60 3.88

69. Training process 3.66 3.53 3.82

70. Supervisors communicate 3.66 3.47 3.92

openly

71. Coworkers 3.61 3.44 3.82

72. Newsletters and public 3.52 3.44 3.64

relations

73. Performance appraisal 3.52 3.41 3.70

74. Top management encourages 3.50 3.50 3.56

employees and supervisors

to communicate openly

75. Top management 3.28 3.25 3.36

communicates openly

76. Budget allocations 3.10 3.25 3.20

77. Compensation system 3.02 2.84 3.25

Average 3.48 3.38 3.65 Respect for others

78. Supervisors encourage 3.95 3.84 4.07

employees to treat others

respectfully

79. Supervisors treat others 3.90 3.88 3.93

80. Coworkers 3.88 3.81 3.96

respectfully

81. Top management treats 3.77 3.88 3.67

others respectfully

82. Top management encourages 3.76 3.78 3.77

employees and supervisors

to treat others

respectfully

83. Hiring process 3.73 3.63 3.89

84. Newsletters and public 3.59 3.53 3.68

relations

85. Performance appraisal 3.58 3.50 3.70

86. Training process 3.52 3.45 3.64

87. Compensation system 3.18 3.00 3.43

88. Budget allocations 3.00 3.25 3.00

Average 3.62 3.60 3.70 Teamwork

89. Hiring process 4.11 3.97 4.32

90. Coworkers 3.98 3.91 4.11

91. Training process 3.89 3.63 4.21

92. Performance appraisal 3.88 3.84 4.00

93. Newsletters and public 3.72 3.72 3.71

relations

94. Supervisors help 3.72 3.69 3.78

employees work as a team

95. Supervisors work as a 3.68 3.58 3.85

team

96. Compensation system 3.51 3.47 3.61

97. Top management works as 3.47 3.48 3.56

a team

98. Top management helps 3.46 3.48 3.48

employees and supervisors

work as teams

99. Budget allocations 3.20 3.50 3.00

Average 3.69 3.66 3.78