Corporate Reputation Review

Volume 12 Number 3

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
ABSTRACT

Corporate reputation is an intangible yet important factor that inuences 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 inuence corporate 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, 229244. 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) denes reputation as a perceptual representation of a companys past actions and future prospects that describe the rms 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 communications disciplines emphasize how corporate

reputation effects consumer behavior (Clardy, 2005; Gray and Balmer, 1998) and marketing focuses on the branding and identity process (Olins, 2000). The impact of the human resource (HR) function on corporate reputation is rarely reported. Notable exceptions 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 OShaughnessy, 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 partner with leadership to drive corporate reputation because human capital is a critical value driver of corporate reputation. Human Resource Management (HRM) capabilities can result in valuable and difcult to imitate strategic competitive advantages (Flanagan and OShaughnessy, 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 managers 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

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specically inuences particular dimensions of reputation needs to be explored. The purpose of this article is to offer a conceptual framework to guide HR managers in their efforts to strengthen their organizations reputation. The article rst denes corporate reputation, and then presents a conceptual framework of corporate reputation that incorporates HR roles. Organizational examples that illustrate aspects of the conceptual framework are then offered. The article concludes 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 satised (Gabbioneta et al., 2007; Gioia et al., 2000). Fombrun (1996) also emphasized that reputation is perceptual and relates to the organizations 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 reputation to 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 nancial performance, leadership quality and the organizations future prospects. Snchez and Sotorro (2007) posits that social responsibility (a dimension of corporate reputation) results in a competitive advantage. Competitive advantages allow

organizations to demand higher premiums for its products and services, attract more qualied 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 inuenced consumers buying decisions. Specically, perceived food quality, human rights and environmental issues were considered along with price and convenience when making buying decisions. Bromley (2000) stated that stakeholders use various criteria to assess corporate reputation and therefore have different organizational expectations. Stakeholders are dened as any group or individual who can affect or is affected by the achievement of the organizations objectives (Freeman, 1984: 46), and includes shareholders, consumers, business partners, governments, media, local communities (Neville et al., 2005: 3). Employees expect fair compensation 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 inuenced by the customers satisfaction with perceived products and services quality (Carmeli and Tishler, 2005). Corporate reputation has been shown to be related to nancial performance (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 incorporated the information of such disclosures prior to publication (Abraham et al., in press). Groenland (2002) outlined the effects of corporate reputation on various stakeholders: the trust and loyalty of customers, 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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employee motivation and loyalty and reduce employee turnover and its associated cost (Albinger and Freeman, 2000). As an internal support function, HRM can indirectly improve corporate reputation as judged by external stakeholders. The measurement of corporate reputation has been problematic with respect to validity, standardization and constructs measured (Helm, 2005; Larkin, 2003; Wartick, 2002; Fombrun et al., 2000). To standardize the measurement process, Harris Interactive (a market research rm) and the Reputation Institute developed a multidimensional definition of corporate reputation, the Reputation Quotient (RQsm) (Fombrun and van Riel, 2004). For the purposes of this article, RQsm will be used as it provides a comprehensive treatment of domains that HRM can indirectly impact. Based in part on research conducted by Groenland (2002), Fombrun and van Riel (2004) dene 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 innovative) Vision and Leadership (eg, has excellent leadership, well managed) Financial Performance (eg, protability, 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,

innovation, long-term investment, 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 nancial performance dimensions are not strong drivers of corporate reputation when compared with emotional appeal. HR managers can implement organizational communication, training and compensation initiatives that enhance employee competencies and motivation, which in turn inuence corporate reputation. A conceptual framework that builds on Fombrun and van Riels (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 inuence the role HR plays and its potential impact on employees assessment of their organizations corporate reputation. The HR function may play a more inuential 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 inuential in organizations that produce commodities that do not require specialized or unique skills to produce (eg, commodities). In such organizations, HR may be relegated to non-strategic administrative roles. Similarly, service organizations where employees have direct contact with

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Employee Perceptions: Strategic Partner Organization Background Mission Strategy History Values Change Agent Administrative Agent Employee Champion Employee Attributes: Organizational Identification Competency Motivation Emotional Appeal Products and Services Social Responsibility Workplace Environment External Stakeholder Corporate Reputation Assessment

Vision and Leadership

Financial Performance

Figure 1: Human resource role impact on corporate reputation

consumers may place the HR function in an inuential role when compared with manufacturing organizations that have less interaction between employees and consumers. 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 compensation and training inuence 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 organizational type. Benedict (2008) reports that HR professionals from publicly owned for profit organizations were more likely than HR professionals from private for prot organizations to report that they played a strategic role. HR professionals from small organizations were more likely than HR professionals from large organizations to report that they play administrative roles (Benedict, 2008). HR professionals in large organizations also report that they implement change agent roles more frequently than HR professionals in smaller organizations (Benedict,

2007). In other words, the type of organization and its background inuences the extent that the HR function impacts corporate reputation. The HR function indirectly inuences corporate reputation by implementing roles that increase employee competency, motivation and organizational identication. 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 function adds value to organizations by implementing 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 higher employee satisfaction levels should lead

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to high customer satisfaction, and ultimately affect consumer loyalty and protability. Their research found that employee turnover 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 identication with their organization is an important precursor to corporate reputation (Fombrun and van Riel, 2004). Employees that identify with their organization are more likely to engage in behavior that support the organization and act as organizational ambassadors when interacting with the public. Wieseke et al. (2007) found that employees customer orientation behaviors depended on employees organizational identication. Edwards (2005) suggested that organizational identication results in employees defending the organization and acting in its best interests. Frontline employees strongly inuence the extent to which customers view an organization as customer oriented (Hurley and Estelami, 2007). Employees organizational identication 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 innovative training approach and found it to be an effective mechanism that builds corporate identities as perceived by employees. These authors proposed that training enables organizations to rapidly assimilate the new identities, increase employee satisfaction, 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 signicant 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 commitment, and that increased commitment is a lead indictor of customer commitment, which in turn is a lead indictor of protability (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 benets (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 inuences 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.

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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 organizational leadership (Lockwood, 2007a). Strategic partners should focus on dimensions 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-Colas CEO Neville Isdell to help reverse the organizations negative return on investment (ROI). In 2004, McCague surveyed, interviewed 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 signicant barriers to the organizations goal achievement. In 2005, a new mission, values and objectives were established and communicated to employees via face-to-face meetings, company Intranet and Web-TV. This new direction was called Coca-Colas Manifesto for Growth, which included the ve Ps: people, planet, partners, prot and portfolio. This new vision included three dimensions of corporate reputation dened earlier by Harris Interactive: corporate employee engagement (workplace environment), social responsibility and leadership qualities. CocaColas employee engagement survey indicated 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-Colas standing on the Harris Interactive 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 increased employees understanding and clarity of the organizations mission, fostered employees organizational identication and increased employees emotional appeal with the company. According to Coca-Colas ofcial 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, rated No. 2 for Corporate Social Responsibility 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, including water stewardship, healthy active lifestyles, community recycling and education. For those employees that interact with external stakeholders, external stakeholders (eg, customers) may have perceived CocaCola employees (eg, sales, marketing, distribution personnel) as competent, motivated individuals that speak well of their company. External stakeholders that interact with Coca-Colas logistics and distribution supply network may also perceive Coca-Cola employees in a positive fashion. As a manufacturing organization, CocaColas products and services constitute the

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major area of public interface that inuences corporate reputation. The company instituted its Coca-Cola Quality System, a branded quality management system developed 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 certication in standard operating procedures and quality management. Younger et al. (2007) introduced the concept of the talent developer brand as a way to enhance organizations ability to compete for strategic and valued human capital. Mathis and Jackson (2008) dene human capital as the collective value of the employees capabilities, knowledge, skills and motivation. Procter and Gamble, Ketchum, Xerox and Goldman Sachs illustrate organizations that gained favorable workplace environment reputations characterized by employee growth and mobility. These organizations share a common value of employee development as a key aspect of the corporate strategy (Younger et al., 2007) (see Figure 1, organizational background component). This positive corporate reputation, earned primarily through heavy investment in the development of their human capital, has contributed to each organizations ability 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, customers) and competent and motivated employees that identify with their organizations positive reputation are cumulative. Over time, this cumulative interaction may improve corporate reputation as assessed by external stakeholders. Of course, interactions characterized by employee incompetence

are likely to have the opposite effect on corporate reputation, and ultimately lead to poor nancial performance. Laurie Siegel, the senior HR vice president at Tyco, worked as a strategic partner with leadership to implement several positives changes (Deutsch, 2003). Ms Siegel implemented the companys 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, Fortune ranked Tyco as number 10 on their most admired company list within their industry. The improvement in Tycos ranking reected, in part, the impact of Ms Siegels 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 Freeman, 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 policies support and motivate employees to donate their time to charitable efforts. Using their corporate website and public relations, FedEx communicates these socially responsible 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 organization. In order to manage change effectively, HR must monitor the relevant business environment and facilitate organizational changes that add value. Domains that require monitoring include the competitive landscape, government regulations and the global economy (especially given the

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recent trend toward globalization). Eastman Kodaks transition from chemical to digital lm technology over the last decade is an example of an organizational change that required leadership, vision, overcoming resistance to change, extensive training and employee motivation. Eastman Kodak continues its transition to a renewed, more competitive organization with HR managers working to assist that change. Training and career development programs upgrade employee skills that improve product and service quality, important elements of corporate reputation. In 2005, General Electric implemented its Ecomagination program. The objective of this program was to increase organizational growth by offering products that reduce energy consumption, such as efcient lighting and appliances (Fox, 2007b). HR managers can serve as change agents in this regard by engaging employees in the new product development process. Employee engagement can include initial idea generation, product development and commercialization. GE established an infrastructure, including a president of corporate citizenship that enabled employees to be actively involved in generating these new products that are socially responsible and also result in positive 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 HRs role during a merger between Baxter Healthcare Corporation and American Hospital Supply. Mergers and acquisitions are organizational changes characterized by employee resistance, stress and confusion. HR supported this merger by designing a new organizational structure, implementing employee

communications, assisting in the selection of executives and other key positions, and providing career assistance.
Administrative Expert

The administrative expert role delivers efcient HR processes such as stafng and benets administration. The administrative expert roles can provide efcient employee training and recruiting that reduces costs, improves productivity and increases protability. Employees and managers benet from HR process improvements, such as lling vacant positions more quickly, increasing the quality of new hires and administering benets in a timely manner. The administrative 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 reengineering efforts that improve the order fulllment and product development process. The result of efcient and effective organizational processes is higher quality products and services, and ultimately better nancial results, the latter two results readily observed by external stakeholders. Product and service quality (an element of corporate reputation) refers to stakeholders belief that the organization offers high quality products and/or services that are innovative and provide good value for the money (Fombrun and van Riel, 2004). HR can impact corporate reputation in this area by reengineering product development business processes that effectively move products and services from ideation to commercialization. For example, the Films Business of Mobil Chemical, a leading global supplier of exible packaging and oriented polypropylene labeling applications, implemented a product innovation process to expedite the product development process. Task forces consisting of employees with relevant competencies moved products successfully through several gates (eg, market demand

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and economic justication). 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 computer technology when Ms Siegel was hired. She helped staff install technology that centralized both the procurement process and the employee compensation system (payroll and benets). In other words, she implemented the administrative expert role to help Tyco provide more efcient services for two important stakeholder groups: suppliers 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 organizational objectives (Ulrich, 1997). The employee champion role seeks to address the wide range of concerns that are salient to employees such as pay equity, adequate employee benets, a harassment free workplace, safety and job satisfaction. Effective training, timely developmental experiences, career planning and mentoring provide employees with opportunities to grow, develop competencies, increase their marketability 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 nancial results. Wegmans earned a place on Fortune Magazines 100 best companies list for the past ten years, including number 1 in 2005, number 2 in 2006 and number 3 in 2007. Wegmans provides generous employee benets, including a college scholarship program that provides 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 goodwill, retain employees and increase Wegmans reputation as an employer of rst choice for all people (Wegmans, 2007). Wegmans extensive employee orientation, training, exible work scheduling and reward programs ensure knowledgeable and friendly employees that competently interact with customers at the store level. Wegmans motto is employees rst, customers second, and its favorable corporate reputation is an intangible asset that likely contributes to its nancial achievements (eg, 2005 $3.8bn revenue). Google earned the number 2 corporate reputation ranking (Harris Interactive, 2008), and the number 1 ranking on Fortunes 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 considerable 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 limited to providing training and development opportunities within the organization. Pzer Pharmaceuticals created their Global Health Fellows (GHF) program that links corporate strategic goals and employee desire to volunteer their time to worthy causes (Vian et al., 2007). On a global scale, GHF matches

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employees with charitable and volunteer opportunities that improve health in developing countries. Since 2003, the program has elded 150 employees in volunteer positions in 31 countries (Pzer, 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 communications (Pzer, 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 employees a exible benets plan whereby employees choose health, life, retirement, tuition assistance, employee stock purchase and global travel options customized to their needs. The employee champion role fosters employee growth and advancement opportunities by implementing training and development programs. Initially beneting employees, these training processes can be offered to others external to the organization. Krell (2001) argues that training can be leveraged externally to increase customer satisfaction, develop business partnerships and increase protability. 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 Corporation has long offered its customers comprehensive 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 university program. Customer training curriculum includes workow 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 programs). 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 inuence corporate reputation in signicant ways. As an internal support function, HR must collaborate with leadership and other functions to inuence corporate reputation. For example, HR must collaborate closely with corporate communications so that internal employee communications and information provided to the public by the public relations 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 inuence is indirect through employees that interact with the public or through high product quality. Lockwood (2004) identies three areas where HR impacts social responsibility (an aspect of corporate reputation): ethics, employment practices and community involvement. 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 efcient and effective recruitment, selection, compensation, training and other HR practices that increase workplace quality and make an organization an employer of choice. Finally, Lockwood (2004) described community involvement 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 capital continues to increase and skilled labor becomes scarce, organizations with positive corporate reputations will be at a competitive 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 inuence 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 inuence on organizational outcomes (Becker et al., 2001). Like any other investment, initiatives designed to enhance corporate reputation through increased employee competency or improved products must demonstrate a ROI that justies 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 managers understand their external investors perspective. 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 organizations balance sheet, scorecard and important business metrics must be clearly understood and examined in order to link

HR initiatives with corporate reputation and nancial results. Strategic partnerships between HRM, nance and accounting personnel are important in this context. HR managers should audit their own function to determine the extent that its activities contribute to corporate reputation. HR should identify key stakeholders, how they assess corporate reputation, prioritize initiatives such as training and compensation, set goals to improve reputation, and monitor progress toward improved corporate reputation. Similar to Cynthia McCagues 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 relationships have implications for the education, selection and development of HR professionals. Higher education curricula need to produce well rounded HR professions that understand the business and its marketplace (Ulrich and Brockbank, 2005). All HR professionals should demonstrate competence in marketing, communication and nance so that they understand their organizations marketplace and how it brings value to customers. 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. According to Lawler et al. (2006), HR professionals need to develop the following competencies in order to implement the strategic partner role: business understanding, strategic planning, organizational design, change management, cross functional experience, global understanding and communication. When HR professionals join organizations, a developmental action plan should be determined to help HR professionals align HRM with corporate reputation and business objectives. Corporate reputation should be considered during the strategic planning process,

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as reputations provide predictions as to how organizations will behave in different situations (Clardy, 2005). Fox (2007b) argued that the new wave of corporate social responsibility requires that organizations integrate their charitable activities closely with their organizational mission and core capabilities. Stakeholders increasingly expect that corporations be socially responsible. An example of developing trust occurred when Tylenol pulled all of its products off the shelf following an incident with product tampering in 1982. Johnson & Johnsons swift response to the tampering issue fostered a reputation for consumer safety and corporate responsibility. Consumers are likely to believe that Johnson & Johnson will act to prevent future occurrences and react responsibly should a similar crisis occur in the future. In a similar fashion, Starbucks has a reputation for treating and compensating its employees (internal partners) fairly, and applicants can predict that Starbucks is likely to continue doing so in the future. Corporate reputation may be considered a component of organizational culture, that is, beliefs and values that employees share about their organization and that inuence their behavior. As reputations can be positive or negative, corporate reputation can establish a corporate culture that either supports organizational 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

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 characteristics, HR roles, employee attitudes and corporate reputation. The conceptual framework also provides guidelines to HR managers as they strive to indirectly contribute to their organizations positive corporate reputation. To positively impact their corporations reputation, these guidelines suggest that HR managers need to occupy an inuential position in the organizational structure, participate in strategic planning and develop efcient 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 Conference, Fort Lauderdale, Florida, 5 October, 2007. 2 The author wishes to thank an anonymous reviewer for suggesting this model.

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