The C enter for Hospitality Research
Hospitality Leadership Through Learning
HR Branding:
How Human Resources Can Learn from
Product and Service Branding to Improve
Attraction, Selection, and Retention
Cornell Hospitality Report
Vol. 12 No.14, October 2012
by Derrick Kim and Michael Sturman, Ph.D.
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ANNIVERSARY
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Cornell Hospitality Report
Vol. 12, No. 14 (October 2012)
© 2012 Cornell University. This report may
not be reproduced or distributed without the
express permission of the publisher.
Cornell Hospitality Report is produced for
the benefit of the hospitality industry by The
Center for Hospitality Research at Cornell
University.
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Jennifer Macera, Associate Director
Glenn Withiam, Director of Publications
Center for Hospitality Research
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School of Hotel Administration
489 Statler Hall
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Niklas Andréen, Group Vice President Global Hospitality & Partner
Marketing, Travelport GDS
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Leader, Hospitality & Leisure, PricewaterhouseCoopers
Raymond Bickson, Managing Director and Chief Executive Officer, Taj
Group of Hotels, Resorts, and Palaces
Stephen C. Brandman, CEO and Co-Owner, Thompson Hotels
Raj Chandnani, Vice President, Director of Strategy, WATG
Eric Danziger, President & CEO, Wyndham Hotel Group
Benjamin J. “Patrick” Denihan, Chief Executive Officer,
Denihan Hospitality Group
Chuck Floyd, Chief Operating Officer–North America, Hyatt
RJ Friedlander, CEO, ReviewPro
Gregg Gilman, Partner, Co-Chair, Employment Practices, Davis &
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Tim Gordon, Senior Vice President, Hotels, priceline.com
Susan Helstab, EVP Corporate Marketing,
Four Seasons Hotels and Resorts
Paul Hineman, Executive Director, National Restaurant Association
Steve Hood, Senior Vice President of Research, STR
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Foundation (501(c)3), ASAE Foundation
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HR Branding:
How Human Resources Can Learn from
Product and Service Branding to Improve
Attraction, Selection, and Retention
by Derrick Kim and Michael Sturman
ABouT The AuThors
A recent graduate of the School of Hotel Administration at Cornell University, Derrick Kim currently studies at McGill
University, pursuing graduate dual diplomas in human resources and marketing to further strengthen and apply his
knowledge in HR Branding. In addition, he works at a non-profit organization that he found in 2010, Bridge For
World, Social Consultants (BFW) Society, with virtual chapters in Vancouver, New York and Seoul.
Michael C. sturman, Ph.D., is professor of management and The Kenneth and Marjorie Blanchard Professor of
Human Resources at the Cornell School of Hotel Administration. He teaches undergraduate, graduate and executive education courses on
human resource management, compensation and cost-benefit analysis. His research focuses on the prediction of
individual job performance over time, the influence of compensation systems, and the impact of human resource
management on organizational performance. He has published research articles in such journals as the Journal of
Applied Psychology, Academy of Management Journal, Personnel Psychology, and Journal of Management. He has
also published practitioner papers in the Cornell Hospitality Quarterly, International Journal of Hospitality Management,
Lodging Magazine, Lodging HR, A.A.H.O.A. Hospitality, HR.Com, and The American Compensation Association
Journal. Sturman is the Kenneth and Marjorie Blanchard Professor of Human Resources. He holds a PhD, MS, and BS
from Cornell University’s School of Industrial and Labor Relations, and is a Senior Professional of Human Resources as certified by the Society
for Human Resource Management.
4
The Center for Hospitality Research • Cornell University
exeCuTive suMMAry
B
rand equity and human capital are two critical assets that support a firm’s short-term stability
and long-term success. While businesses have recognized the power of brand management
for attracting and retaining external customers, companies are only beginning to realize the
potential benefits of HR brand management for attracting, selecting, and retaining internal
customers (i.e., employees). The purpose of this report is to introduce CHR readers to the concept of
HR branding. Our purpose is to review the research and implications of the branding literature, and
then to describe how human resource management can draw on these lessons to influence human
capital. Specifically, we will (1) define HR branding, (2) detail its potential for attracting, selecting, and
retaining employees, and (3) describe how firms can manage their HR brand to achieve this potential.
Many examples of firms engaging in HR branding practices are provided throughout the paper. We
argue that human resources can learn from marketing, thereby managing three components of a
company’s HR brand—its reputation, culture, and total value proposition. Ultimately, HR branding can
be used as a strategic tool to manage different aspects of the employment experience.
Cornell Hospitality Report • October 2012 • www.chr.cornell.edu
5
Cornell hospiTAliTy reporT
HR Branding:
How Human Resources Can Learn from
Product and Service Branding to Improve
Attraction, Selection, and Retention
A
by Derrick Kim and Michael Sturman
cross industries, strong brand equity helps drive business success.1 Built through
marketing activities, brand equity is defined as accrued recognition or perceived value
from customers that constitute brand power.2 Customers perceive value in brands, and
thus become less price-sensitive to branded products, make repeat purchases, and
develop loyalties to brand affiliations.3 Because companies with strong brands can leverage brand
equity to enhance overall profitability, organizations4 and academics5 recognize branding as a way to
attract and retain a company’s external customers.
1 Dev, C. and Prasad, K. 2000. Managing Hotel Brand Equity. Cornell Hotel and Restaurant Administration Quarterly, 41(3): 22-31; and Keller, K. L., &
Lehmann, D. R. 2006. Brands and branding: Research findings and future priorities. Marketing Science, 25, 740-759.
2 Rust, R., Zeithaml, V. and Lemon, K. 2000. Driving Customer Equity. NY: Free Press.
3 Keller, K. 2008. Strategic Brand Management. NJ: Pearson Prentice Hall.
4 Mortan, L. 2007. Brand Profitability and Brand Building. Blogspot.com, March 4, 2010. http://www.brandprofitability.blogspot.ca/
5 Rust, R., Zeithaml, V. and Lemon, K. 2004. Customer-Centered Brand Management. Harvard Business Review, 82(9): 110-118.
6
The Center for Hospitality Research • Cornell University
Exhibit 1
Three stages of customer experience, both internal and external, with effects on branding
Adapted from: American Customer Satisfaction Index (ACSI) Model by National Quality Research Center and Rust, Zeithaml, and Lemon’s
Customer Equity Components & Key Drivers See: R. Rust, V. Zeithaml, and K. Lemon, Driving Customer Equity (New York: Free Press, 2000).
Those principles also apply to a company’s internal
customers, its employees. Just as branding applies to products
or services, branding may also affect firms’ human capital,6 by
adding value to the employment experience of current and
prospective employees.7 The sorts of activities that are tailored
towards these goals are called HR branding.8
Most companies in the hospitality industry recognize the
critical role of employees in delivering service products, and
the best companies emphasize the value of people in their
philosophies.9 Yet, as noted by the former senior vice president of human resources & administration for Hilton Hotels
6 Enz, C. 2001. What keeps you up at night? Cornell Hotel and Restaurant
Administration Quarterly, 42 (2): 38-45.
7 Khan, B. 2009. Internal branding: aligning human capital strategy with
brand strategy. ICFAI Journal of Brand Management, 6: 22-36.
8 In academic research, several highly related ideas have been explored
in some depth. Such research has used terms like “internal marketing”,
“organizational branding”, “employer branding,” and “internal branding.” We
build on this research, but use the broader term “HR branding” which we
feel most accurately describes the variety of issues associated with applying
branding issues to the human resources domain, and most broadly captures
the range of topics and findings from existing work that has used these
various terms. We also use some of these terms to describe what are specific
components to the process of “HR branding” as will be described later in
the paper.
9 Hinkin, T. and Tracey, B. 2010. What makes it so great? Cornell Hospitality
Quarterly, 51(2): 160.
Cornell Hospitality Report • October 2012 • www.chr.cornell.edu
Corporation (Hilton Worldwide), Richard Mignault, “For
an industry that fully understands what it takes to create a
satisfied customer, the lack of significant representation of
hospitality companies on Fortune’s list of “100 Best Companies to Work For” represents a real disconnect between
managing the brand and managing employees.” In 2012,
only six hospitality firms were included on the Fortune
list.10 Being on the list is a worthy goal for several reasons.
Research shows that making it to Fortune’s list helps companies earn higher customer satisfaction ratings, increases
stock prices,11 and yields about a 1.6-percent increase in return on assets.12 Given the importance of human resources,
Mignault raises a compelling point that suggests a separation between how companies in the hospitality industry
manage the brand equity accrued by external customers
versus that of internal customers (i.e., the employees).
10 Fortune Magazine. 2012. 100 Best Companies to Work For in 2012.
Money.cnn.com, March 15, 2012. http://money.cnn.com/magazines/
fortune/best-companies/2012/full_list/
11 Filbeck, G. and Preece, D. 2003. Fortune’s Best 100 Companies to
Work for in America: Do They Work for Shareholders? Journal of Business Finance & Accounting, 30:771-797.
12 Simon, D. and DeVaro, J. 2006. Do the Best Companies to Work for
Provide Better Customer Satisfaction? Managerial and Decision Economics, 27: 667-683.
7
Exhibit 2
product versus service branding with implications for human resources branding
product Branding
Various tactics used to elicit
brand equity and manage
loyalty. For luxuries or
commodities, branding is
used to instill an emotional
association as a premium
for products’ replicable
benefits, given its
characteristics:
(1) Tangibility
(2) Storable Inventory
(3) Transferable Ownership
(4) Standardization
(5) Value Specificity
Attraction
external
Customer
(product &
service
Branding)
service Branding
Building a brand identity
based on the service
experience. It is a shared
process by all of the internal
functions. Service branding
requires consistency of the
human-driven customer
service with the following
characteristics:
(1) Intangibility
(2) Perishable Inventory
(3) Personal Ownership
(4) Customization
(5) Bundling Capacity
equal
processes
internal
Customer
(hr
Branding)
selection
retention
Communicate to the right
audience, with the right
message, through the
right channel, and at the
right time. Persuade the
targeted customers that
your brand will meet and
exceed their needs. Turn
prospects into customers
and first-time buyers into
long-term buyers through
targeted up-sells and
expanded product
offerings.
Provide a positive
customer experience
that is consistently
meeting and exceeding
the brand promises with
the quality assurance
and brand standards.
Deepen your relationship
with your customer base,
by affecting their
decisions to purchase or
return with brand
recognition.
Reduce customer
defection by enhancing
the customer relationship
with reward or loyalty
programs. Reactivate
client interactions by
reminding them of
positive encounters with
the brand in the past.
Emphasize your product
or service’s differentiated
value propositions and
promise to fulfill their
needs consistently.
Attract potential
employees’ attention by
using the company
reputation attained from
the brand equity of your
products or services.
Communicate the clear
message and image that
your firm desires to
portray as an employer of
choice. Ensure that the
employer image is aligned
with the actual
employment experience
offering.
Affect the job selection
decision by informing
what the employment
experience will be like,
during every touch-point
with potential recruits.
Clarify what the firm is
looking for from an ideal
candidate. Make sure
that the firm’s distinctive
culture and values are
fully understood by
applicants and
employees.
Differentiate your
compensation strategy
by offering a holistic view
of total rewards, instead
of simply monetary
remuneration.
Communicate the unique
value proposition of your
company’s offerings that
the employees truly
perceive as valuable, and
achieve loyalty, cost
efficiency, and
operational success.
This report introduces and explores the concept of
HR branding. We review the research and implications of
the branding literature and describe how human resource
management can draw on these lessons to influence human
capital. Specifically, we will (1) define HR branding, (2)
detail its potential for attracting, selecting, and retaining
employees, and (3) describe how firms can manage their HR
brand to achieve this potential.
Defining Human Resource Branding
Most hospitality managers are familiar with the basics of
product and service branding, which emphasize the importance of building a desired and consistent brand image. The
branded value of the service product is related to the guests’
expectations of what will be experienced and the ability of
the company to fulfill those expectations. Brand management influences external customers’ perceptions of a company’s intangible value by delivering a distinctive experience
around the company brand.13 It provides a tool to attract,
13 Mosley, R. 2007. Customer experience organizational culture and the
employer brand. Brand Management, 15: 123-134.
8
select, and retain external customers (see Exhibit 1). HR
branding is a similar tool, but concerns internal customers.
Ambler and Barrow defined the human resource brand
as “the package of functional, economic, and psychological
benefits provided by employment, and identified with the
employing company.”14 Managing the HR brand thus entails
managing the aspects of a company’s reputation and image,
communicated to both current and prospective employees.
Much like customers seek the right fit with certain brands
before purchase, potential recruits are attracted to organizations whose members’ personalities, values, interests, and
other attributes seem similar to their own.15 In the same
way that branding influences customers from the attraction
stage, to the initial purchase, to long-term loyalty, individuals’ perceptions of an organization’s brand can influence
human resources from attraction, to selection, to retention.
14 Ambler, T., and Barrow, S., 1996. The employer brand. Journal of Brand
Management, 4 (3), 185-206
15 Schneider B., Goldstein H. and Smith D. 1995. The ASA framework: an
update. Personnel Psychology, 48: 747-773.
The Center for Hospitality Research • Cornell University
The Potential Value of Human Resource
Branding
and services, would-be employees’ anticipation is based on
non-experiential information such as advertising, word-ofmouth, and the overall brand knowledge. The reputation of
Coordinating HR functions with marketing tactics, HR
the company, accurate or not, will influence the perceived
branding gives the opportunity for companies to influence
desirability of jobs. SAS, for example, reported having their
or alter the firm’s identity and reputation. HR branding
application system overwhelmed the day after they were
affects the employment experience, in much similar ways
first listed in Fortune’s “100 Best Companies to Work For.” A
that product and service branding affects the three stages
Google executive reported that while riding to work on his
of the external customer experience: attraction, selection,
bicycle wearing a Google t-shirt, he gets stopped and asked
and retention. External and internal customers begin their
if Google is hiring. In short, the HR brand of a company atrelationships with the company brand in the attraction stage,
tracts potential employees to that company brand.
and enter the subsequent stage of selection with the initial
Companies need to attract and engage the right people.19
purchase (and hopefully, ultimately, retention). All forms
This begins by controlling perceptions regarding its reputaof branding involve various management tactics that are
tion. If a company can strategically craft its image as an
related to marketing (advertising, sales, loyalty programs)
employer and specify its desired qualities of employees, it
or human resources (recruiting, job engagement programs,
should be able to attract a rich pool of applicants, generating
and compensation) during all three stages. Processes for HR
higher net yield of the targeted internal customers.
branding can be based on the lessons learned from product
HR branding affects potential recruits interested in purand service branding (see Exhibit 2). For the hospitality
suing vacant positions, and a strong HR brand may offset the
industry, where employees’ actions make up the core service
challenge of attracting strong employees that might be creproduct, HR branding can strengthen the company’s overall
ated by a weak product-brand presence with low consumer
business efficiency.
awareness.20 Potential recruits are less aware of, or even have
In sum, organizations can treat potential and current
negative associations with the company which may deter
employees as internal customers, and employment opportheir employment consideration. Just like external customtunities as the product that they offer. Some firms do this
ers, potential employees seek to determine whether their
already, as we discuss below. From this perspective, managepersonal values and goals are congruent with the attributes
ment can apply different models of consumer marketing.16
of a given position and the characteristic of the company, to
For the labor market, companies may manage as they would
avoid negative selection decisions.21
with their commercial products, essentially specifying the
McDonald’s, for instance, concluded that its unmanaged
benefits and costs of the vacant positions. For potential
HR brand was hurting recruitment efforts. Although clearly
employees, companies can provide the information needed
possessing one of the strongest product brand images, and
for desired candidates to make an informed decision to
even with 80 percent of current employees providing posiapply, select, and ultimately, stay. During this progression,
tive evaluations of the company, those outside the company
HR brand equity is accrued through interactions between
still degradingly referred to positions at McDonald’s as
firms and internal customers in much the same way as with
“McJobs” or “burger flippers.” These positions were stereoexternal customers.
typed as low-paying, dead-end jobs. To combat their tainted
Attraction
reputation, McDonald’s identified what employees perceived
as the value of working at the firm. Based on this informaAttraction is a vital prerequisite for initiating and develoption, the firm built and implemented a communications
ing trust and commitment between firms and consumers.17
strategy targeted at potential employees.22 After these HR
For HR branding, attraction is achieved through potential
branding efforts, McDonald’s was ranked eighth on the Best
applicants’ expectations of the perceived quality and value
18
of an employment experience. As occurs with products
16 Wilden, R., Gudergan, S. and Lings, I. 2010. Employer branding: stra-
19 Raj, A. and Jyothi. P. 2011. Internal branding: exploring the employee
ing potential. Working paper submission for the 22nd IMP conference in
Milan, Italy.
18 Allen, D. G., Mahto, R. V., & Otondo, R. F. 2007. Web-based recruit-
21 Harris, S.G. and Mossholder, K.W. 1996. The affective implications
of perceived congruence with culture dimensions during organizational
transformation, Journal of Management, 22: 527-547.
22 Newman, J., Floersch, R., and Balaka, M. 2012. Employment branding
tegic implications for staff recruitment. Journal of Marketing Management,
26: 56-73.
17 Ellegaard C. and Ritter T. 2006. Customer attraction and its purchas-
perspective. Journal of Economic Development, Management, IT, Finance
and Marketing, 3(2): 1-27.
20 Wilden et al. op.cit.
ment: Effects of information, organizational brand, and attitudes toward
a web site on applicant attraction. Journal of Applied Psychology, 92:
1696-1708.
at McDonald’s: Leveraging Rewards for Positive Outcomes. Workspan, 3:
21-24.
