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Research report March 2010

In association with

Employer branding and total reward

Employer branding and total reward

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Introduction Highlights from the interviews How are organisations aligning employer branding and total reward? Our recommended approach to aligning employer branding and total reward The challenges of aligning employer branding and total reward Conclusion References Appendix: An overview of employer branding at the participant organisations

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Employer branding and total reward

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Introduction

This report provides a holistic view of the areas to consider when looking at the links between employer branding and total reward. It can be used to help HR, reward and branding professionals develop their own employer branding offering that links strongly to their organisation's reward approach. It can be used by you to gain buy-in from other members of staff and develop cross-functional working relationships focused on ensuring these concepts mutually support one another throughout the business. This report can help you navigate your way during economic recovery by offering examples of ways in which remaining true to your employer branding and reward strategy can help to position your company positively for the upturn. This report is based on in-depth interviews with nine interviews carried out between August and September 2009. In this report, what do we mean by employer branding? The CIPD defines the employer brand as a set of attributes and qualities ­ often intangible ­ that makes an organisation distinctive, promises a particular kind of employment experience, and appeals to those people who will thrive and perform best in its culture. Specifically, organisations that have a strong and attractive employer brand:

· can use it to help them produce in turn a more

It goes beyond standard remuneration by embracing the company culture and is aimed at giving all employees a voice in the operation, with the employer in return receiving an engaged employee performance. The CIPD Reward Management survey report (CIPD, 2008b) found concern among employers as to how reward and recognition policies support their employer brand. Hence, our research partnership focused on the following question: What are the links between employer branding and total reward within organisations? Research methodolgy The research project consisted of two phases. The first phase collected data from 44 organisations during May and June 2009 using a web-based questionnaire. The results from our first phase of research can be found on the CIPD website. Headline findings are shown below:

· Nearly 90% of organisations have an employer

engaged workforce who `live the brand' and in turn reduce the costs of employee turnover · are likely to perform better, have higher attendance levels and deliver a more positive customer experience. What do we mean by total reward? The CIPD defines total reward as a reward strategy that brings additional components such as learning and development, together with aspects of the working environment, into the benefits package.

brand or plan to within six months. · Fifty-seven per cent of respondents developed their employer brand to support their employee value proposition (what an organisation stands for, requires and offers as an employer). · Seventy per cent of senior leadership understand and 49% value the employer brand, compared with 10% and 20% of employees/potential employees, respectively. · Almost half of respondents felt a positive or negative effect of the recession on their employer brand, for example it either offered them an unrivalled selling point versus it was compromised by reduced engagement, retention and reward. The findings provided a general understanding of the current employer branding and reward environment (CIPD and Mercer 2009) and supported the second phase of our research.

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This phase consisted of in-depth interviews and a panel discussion that provided insights into how organisations are trying to align employer branding and reward. Nine companies participated in this phase of our research conducted in the second half of 2009. Those that were happy to be named have been listed below:

· Abbey ­ Maria Strid, Head of Reward (Please note

· · · · ·

that Abbey was re-branded as Santander UK in the beginning of 2010) Bacardi ­ Alison Campbell, HR Director Bacardi Martini UK Malmaison and Hotel du Vin ­ Sean Wheeler, Group Director of People Development McDonald's ­ Neal Blackshire, Benefits and Compensation Manager Midland Heart ­ Clare Fielden, HR Business Partner leading on Brand Development tw telecom ­ Steve Hardardt, Senior Vice President Human Resources and Business Administration.

An overview of employer branding at the participant organisations has been provided in the Appendix.

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Highlights from the interviews

There are many benefits that can be derived from having a compelling employer brand that is supported by employee rewards, according to our interviewees. Engagement can be enhanced by a brand that is demonstrably aligned to rewards as it provides an opportunity for companies to `put their money where their mouth is' in promoting desired corporate behaviours and image. Engaged employees who believe in the brand then promote this image more effectively to customers. In our interviews, four key approaches to strengthening the link between employer branding and reward emerged. 1 Employee value proposition The employers we have talked to acknowledge that reward can influence employee behaviours, therefore encouraging the right behaviours can strengthen the employer brand. There is no point in paying for X while hoping for Y; an employer brand that isn't supported by rewards can be perceived as little more than empty words. In this approach, the employer brand sets out the value proposition, outlining what the organisation stands for and its reward philosophy. It defines the `deal' between employer and employee and hence influences the `psychological contract'. At McDonald's, for example, to prevent its employer branding proposition from becoming an empty marketing campaign, it is supported by their reward practices. Organisations with an established, well-defined employer brand are already using total rewards to demonstrate the corporate culture to current and potential employees. For example, tw telecom has aligned incentives, performance-based equity grants, traditional benefit programmes, wellness programmes, and learning and development opportunities to its employer brand and believes this alignment has also been achieved via its performance management system. Customer service firms within our sample have achieved an advanced alignment between employer branding and reward. We suggest that this is due to the need to make a strong first impression and build relationships quickly, particularly during the current economic climate.

2 Rewarding desirable behaviours The most effective way rewards can support employer branding is through rewarding desired behaviours. Often defined in a company's values, these behaviours can create a clear identity for employees and support a positive customer experience that together reinforces the company culture. Some companies, such as tw telecom, directly link their values within their performance management system as a means to communicate the employer brand and support employees' understanding of the line of sight between their performance, their reward and the company. For such organisations, employer branding becomes part of the deeper culture of the organisation, for example Bacardi's values define the work culture, which is essentially the employer brand they market during recruitment. What constitutes exceptional behaviour or `living the values' is included in the performance management system and therefore influences opportunities for development. 3 Communication Effective communication of reward packages is a key way to reinforce the employer brand as it raises awareness to potential and existing employees of the benefits of working for the company. For example, McDonald's was already investing heavily in its people, therefore its branding work focused on communicating this investment to strengthen the employer brand both internally and externally. Numerous media are used to communicate the links between reward and employer branding. The most common of these are: the Internet and intranet sites; employee induction booklets; job descriptions/ advertisements and newsletters (CIPD and Mercer 2009). Effective communication from line managers, however, is considered to be most important.

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4 Ownership and measurement Different companies position employer branding in different functions, not always HR. Ownership varies between the executive team, marketing, employees, communications/operations and HR. A number of companies we interviewed have set up steering groups or reputation teams within their lines of business to support and monitor the employer brand. For example, at tw telecom focus groups across the organisation help shape the desired culture, based on company values and associated competencies. The company's values (integrity, service, teamwork, flexibility) are used as a foundation for all people-related processes and total reward plan elements. Similarly at McDonald's, a planning team managed the employer branding campaign and its launch, leading to campaign success. Among the people we spoke to, it was agreed that employer branding cannot exist solely in HR but rather needs to be owned by the line.

In general, we found that most organisations are not measuring the impact of employer branding and reward on the organisation. However, of those that do try to assess the impact, they use employee attitude surveys and/or performance management data. Detailed examples concerning measurement for success are provided later in this report in the section, `Our recommended approach to aligning employer branding and total reward' (see page 9).

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How are organisations aligning employer branding and total reward?

Almost half of companies in this research believe there is a strong link between their employer brand and rewards. Some believe compensation and benefits should have their own `reward brand'. Provided below are some examples from our

Figure 1: Mercer's Total Reward Model

research of the various ways in which employer branding and total reward have been successfully linked. These have been included in the context of Mercer's Total Reward Model to illustrate the role of each element discussed in the wider reward context.

Source: Mercer

Compensation The interviews highlight that for many organisations cash is still king when it comes to attracting, retaining and motivating employees. Even for organisations that state that pay does not overtly support the employer proposition, most agree that pay needs to be at the right level to ensure that people want to work and come to work for the company. Therefore, while getting pay positioning right may not necessarily enhance the brand, getting it wrong can be damaging:

· Pay is often viewed differently across industries.

these industries, the importance of looking at the whole rewards package was highlighted rather than looking at pay in isolation.

· Bonuses can support the brand in three key

For example, charities pay competitively to get people `through the door', but rely on other benefits of working for such an organisation to retain them, such as development opportunities and a positive working environment. Alternatively, for organisations in industries that are more financially focused, pay is at the heart of the employee value proposition and top quartile pay is required to retain employees. However, even in

ways. First, bonuses can enable organisations to stay aligned with competitor reward packages. This is particularly true in the financial services and re-insurance companies where bonuses are central to the psychological contract. Second, bonuses can link rewards directly to financial performance, which reduces risk to the firm and aligns employees with stakeholders. However, some employers also use bonuses to reward employees for demonstrating behaviours that support the company values. For example, at Malmaison and Hotel du Vin `everything we do links back'. Bonuses encourage excellence and positive employee behaviour, which

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are both at the heart of the company values and improve the guest experience. As such, employees are measured and rewarded against company values, the guest experience and personal achievement. Benefits For many organisations, the employer brand determines the type of benefits offered and in turn these benefits support the messages aiming to be delivered via the employer brand. That is, they are mutually supportive. For instance:

· Malmaison and Hotel du Vin Group has

`We expect our employees to work flexibly, therefore we offer a flexible benefits programme.' `Our brand says we are the best in the market, therefore the benefits we offer our employees have to be the best.' `Our benefits provision reflects the type of work our employees undertake and the lifestyles they lead.' Non-financial benefits: development and career, and work lifestyle For many employers in our research, offering development and career benefits helps to ensure employees have the knowledge, skills and capabilities to carry out their roles effectively. This is not only good for business but it enhances engagement and encourages employees to `live the brand'. Recognition awards are often used to influence the employee experience. Recruitment and induction At McDonald's, employer branding is centred on four key propositions: improvement opportunities, flexibility, an energising environment and continuous learning. McDonald's launched its competitive reward package ­ the `It's not bad for a McJob' campaign ­ back in 2006 in response to low levels of awareness around the reward programmes in place to support the propositions. The focus of the campaign was on existing reward programmes, as these resonate with current employees and create a sense of brand reality. McDonald's stresses that employers have a responsibility to keep enhancing and communicating what they are delivering and now feel they are getting the respect they deserve from the public and so are perceived as a credible employer. Externally, McJobs had become synonymous with low-paying jobs with no growth opportunities. The `It's not bad for a McJob' campaign included 18 advertisements depicting a startling array of positive business practices. In particular, various elements of the pay and benefits package are highlighted using posters. One example of this is that the company promoted the opportunities for people to move

introduced a varied benefits offering including contributory pension, private medical insurance, shopping discounts, foot treatment, childcare vouchers and staff discount rates at their hotels. All of these benefits can be accessed easily online via the new benefits website. This benefits offering is intended to mirror the company's values of value for money, relaxation and making life easier, which also make up the employer brand. `The benefits offered aim to make life easier for employees, which ultimately works to support the employer brand as our employees feel looked after and are in a position to perform when they get to work.'

· A large energy exploration and production

company has an employer brand that promotes longevity and partnerships, which for them means long service and employee loyalty and commitment. As part of this, it has designed benefits to ensure the employee gains financially over the longer term. It drives home simple messages to employees such as, `the longer you participate in our pension plan, the bigger your pension will be.' Similar messages about share plans are also communicated. The quotes below illustrate the feelings of organisations in our study regarding the alignment of their benefits provision with their employer brand:

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from training manager to business manager within three years, with a salary of up to £45,000. It also promoted the flexibility in shift patterns that promote work­life balance for all employees. For instance, one of its recruitment posters emphasised flexibility by showing a person doing yoga. Similarly, Malmaison and Hotel du Vin's `Best Start' programmes for new joiners focus on engaging employees in their first 12 weeks and giving people the confidence they need. All new staff are given a full starter pack and induction on joining, and a mentoring scheme is in place to make sure new recruits settle in. The firm gives rewards for completing induction training. Career development For Malmaison and Hotel du Vin, ongoing development of employees is key. The company offers education and numerous training and development opportunities. For example, each property has its own food and wine training school and also regular supplier-funded trips are used to educate staff and reward good performance, such as a visit to the Champagne region, which was one recent success. Plus it keeps education fun and holds annual competitions, such as the `Ultimate Cook Off ` for chefs, the `Housekeepers Olympics', and a cocktail competition for bar staff. These development opportunities and incentive vehicles aim to ensure that employees live and own the brand themselves. McDonald's supports career development by offering apprenticeships and management A-level equivalent awards. They are an awarding body for diplomas in shift management. They also encourage staff into personal development through its performance stars on the employee uniform. For Bacardi, the biggest challenge concerning their employer branding efforts has been enabling their managers to communicate reward decisions clearly to employees. Therefore, Bacardi developed a management training program in order to achieve improved and consistent development and associated

reward communications and to help managers make their decisions more transparent. Bacardi believe this has enhanced their employer brand. tw telecom's non-financial benefits, such as performance management, training and career development, are designed to ensure employees have the required knowledge and skills. This has the dual impact of increasing engagement among employees and creating brand champions. Recognition programmes at tw telecom align with internal employer branding and provide opportunities for employees to recognise fellow employees who demonstrate company values, which underpin the employer brand. The programmes also allow managers to recognise team members for both results and how they achieve those results. Work lifestyle Malmaison and Hotel du Vin recently involved its employees' feedback in decisions surrounding a change to their uniform. It feels this has increased employee engagement and motivation. Since the new uniform also helped to present a coherent brand to the guests, this process has made both the employee and the guest experience more positive. McDonald's has promoted flexibility and introduced the innovative `family' contract whereby members of the same `family' working in the same location will be able to swap shifts without prior notice or needing to seek a manager's permission. The new contracts were designed to cut absenteeism and improve retention. Summary We have found that pay is driven in part by external factors and therefore there is a balance to be realised between alignment to external factors, such as the market rate for a particular role, and alignment to the internal drivers, which includes the employer brand. While it is accepted that the benefits provision should align with the employer brand, we found that it can be easier to do this for non-financial benefits.

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Our recommended approach to aligning employer branding and total reward

What is the ideal world? There is no one ideal world because the solutions will vary significantly between organisations, industries and geographies. However, based on our research, there are a number of small steps that you can take in aligning reward with the employer brand. 1 Management buy-in The role of senior leadership is essential to drive the concept of employer branding into something that is achievable within the business strategy. Often the most successful brand strategies are those that are presided over by a CEO who is visible and active in the process:

· At tw telecom, the CEO and senior team are

2 Employee feedback Feedback from employees is essential since, as the example of Malmaison and Hotel du Vin highlights, senior management might be responsible for keeping the employer brand alive, but it is the employees that live the brand, through creating the desired work environment. At the `Your Voice' Committee, established as a result of employee feedback, the board of directors meet with employee representatives to discuss employee issues and ensure continuous improvement and communication:

· One company also used a `Jam Session' to assess

actively `shaping' the employer brand via all ongoing communications, including quarterly town hall meetings. The senior executive team is actively involved in building awareness of the firm's vision and values and they have a clear understanding of the importance of people, leadership, talent management and total rewards. In addition, round table discussions hosted by executives across the organisation foster two-way communications and help reinforce tw telecom's values-based culture. However, it is also important for you to involve all lines of business and harness the strengths across different teams within the organisation:

· While its chief executive is actively signed up to

the impact of their policies on employees. This was a global session that lasted 72 consecutive hours with leaders online for the whole time discussing different themes. The session could be adapted to target the employees' understanding and experience of the company's employer brand and reward policy and therefore the impact they were having. There were 10,000 posts! It is also essential to obtain feedback from line managers, especially concerning what the organisation wants to be known for as an employer, since this allows HR and the senior leadership team to determine how the employer brand might be achieved and implemented.

the employer branding concept, Midland Heart stressed the importance of involving several business areas that work closely together (for example HR, marketing and communications) towards a centralised branding plan. Following a series of staff forums, an employee brand engagement steering group was developed to test and ensure that the employer brand accurately reflects the experiences of employees across the company.

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3 Setting boundaries A fundamental understanding is needed regarding how much you want each employee, by grade or band, to associate themselves with the employer brand. Engagement surveys can indicate where the biggest gaps between what the empoyer needs the employee to understand and what the employee actually understands.

Figure 2: Employee associations with the employer brand

Determining the level of alignment between employer branding and total reward at a given organisation can be difficult, but a variety of measures mentioned by our case studies can help you examine the impact of employer branding and total reward. Employee surveys Analysis of employee attitudes can help you uncover whether the employer brand is being realised throughout the organisation and also reveal how employees feel about total reward ­ specifically, whether or not they understand the links between the employer brand and their day-to-day performance and how this links to the way that they are rewarded:

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engagement surveys (which examine team relationships and if the organisation is living the Understand values), satisfaction surveys, retention surveys (where one of the main things to look at is Aware whether the job reality matches expectations), Influence external surveys, staff road shows and also exit interviews as methods to use to gain insights into Figure 2 illustrates the different levels of employer the thoughts of employees. · Malmaison and Hotel du Vin uses employee brand association possible and the factors that feedback gathered through appraisals, as a way of influence it. You might want a non-client-facing, determining how employees feel about working junior employee with little influence and impact for the company. On the basis of staff feedback, just to be aware of what the employer brand is. By it has been able to introduce new strategies that contrast, at senior leadership level or in a client-facing have strengthened the brand and, it believes, role, an employee would be needed to promote make a bigger impact than it would otherwise or even champion the employer brand to make it have achieved. For example, the chief executive successful and ensure expectations are realised. now visits each property twice a year to answer staff questions. An online academy has been set 4 Measuring success up to provide learning and development, this Understanding and assessing the impact and return in turn links to the performance management on investment of reward changes is important to you system. The firm checks that the staff facilities achieving appropriate business outcomes. Assessing are clean and comfortable as this impacts on the impact of employer branding is about ensuring the service quality. All of these measures seek everything is aligned across the whole employee to ensure that employees are having the best experience as desired. Measuring the impact of total possible experience at work. reward is about you looking at reward holistically and making sure your approach is aligned to the brand and the value for money achieved.

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Performance management systems Performance management systems offer another way for you to examine the links between employer branding and reward. Managers can be trained to use the company values in behavioural-based assessments to aid their decision-making process. These values, for many organisations, define their employer brand and, therefore, if the reward employees receive is linked to brand behaviours then success is assumed:

· tw telecom recently completed development of

The tool also trains coaches within the organisation to help interpret the results and integrate them into employee performance and development plans, including employer branding.

· Bacardi uses the performance management system

to measure how well its employees demonstrate company values and their attitudes to identify development opportunities. Therefore, through testing whether or not its employees are displaying the desired behaviours, it is examining whether the employer brand values have been communicated and understood. These examples of measurement techniques are only a few of the many ways you can assess the impact of employer branding on total reward and it is important to define measures of success that are achievable within your own unique organisation.

a 360-degree feedback tool that will be gradually rolled out to the organisation through its employee development processes. At their discretion, individuals will be able to access this tool online and provide developmental feedback to determine whether employee behaviour is living the brand.

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Our recommendations · HR needs to identify and spell out the employer brand for the whole organisation, since if it is not universally defined or understood then this inhibits a link to the overall business strategy. Defining what the employer brand is not is equally important. HR can then act as a reference point during change and help produce agreement between the key stakeholders.

· Ensure that senior employees and, where

· When considering the measurement of employer

brand alignment, HR and business metrics need to be based on the rationale behind the employer brand. For example, how many employees have moved and how many have stayed? Measurement should also take into account customer satisfaction as well as employee satisfaction to ensure alignment between the internal and the external brand.

· HR can use the firm's internal marketing and/or

appropriate, junior employees buy in to the employer brand. HR needs to contribute to the wider business issues and communicate the entire package to all employees.

· Where cultural changes are taking place, help

press department for ideas on how to sell the brand and engage individuals. It can also make use of the various CIPD resources concerning employer branding (see page 16).

· To help HR approach these tasks effectively, we

employees understand and accept the change using clear and honest communication and offer the chance for them to provide feedback during the process. This can help involve them in the process and maintain levels of employee engagement.

· Make the most of the programmes you already

have in place and focus resources on those elements that will have the greatest impact on the brand. Leveraging existing reward policies that are likely to be well established among employees helps to create stability and enhances understanding while implementing change. Often it is the small and cheaper elements of total reward, such as recognition programmes, that can have the highest impact on the brand.

have provided below a list of HR practitioner key skills and capabilities described in our case studies that HR should hold if they are to successfully develop, implement and maintain an employer brand. The skills identified are: affiliation to the business; commercial link to the business; understanding of what differentiates the business; marketing (connect business needs and aims); business acumen; change management/adaptability; knowledge of employee experience and judgement; and the ability to communicate/translate the employer brand to employees.

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The challenges of aligning employer branding and total reward

1 Preparing for the economic recovery · At Bacardi, knowing the company has invested in

The recent recession has necessitated reducing reward levels for employees in many companies. The Mercer Salary Indicator survey (Mercer 2010) showed that more than half of organisations froze salaries in 2009 and the widespread use of pay freezes has also been found in the CIPD Reward Management survey report (CIPD 2009) and Employee Pay Attitudes survey (CIPD 2010b). This inevitably has an effect on employee engagement. The majority of companies in this report said that the impact of the downturn to date had not had a major negative impact on them, due to them being in relatively stable industries. However, just under half of the companies interviewed have felt a direct impact of the current recession on the amount of money available to spend on reward and the value of long-term incentive awards and pensions. While these companies have put a hold on, for the immediate future, any pay reviews or reward design changes, they are still making efforts to limit the impact on employees and maintain levels of investment in such programmes as learning and development. This, they hope, will maintain the strength of the employer brand in the long term. The CIPD's Employee Outlook survey (CIPD 2010a) identified that during the last quarter of 2009 fewer than half of employees felt fully/fairly well informed about what was happening in their organisation and that job satisfaction had decreased across all organisation sizes and sectors. With a third of the respondents also reporting redundancies and a quarter having cut back on training opportunities in response to the recent recession, employers will need to ensure staff motivation levels are maintained and, if necessary, stabilised during 2010. The key challenge for employers now is to retain key talent during the upturn and rewarding positive behaviours helps retain talent in a recovering job market and improves and enhances productivity and engagement. The employer brand also helps create trust, which can make `selling' any potential changes to those who will be affected easier:

them is making employees feel more motivated, which in turn promotes a positive employer brand. An aligned employer brand will also position Bacardi well for the upturn, since it will enable it to communicate its messages both powerfully and honestly.

· While Malmaison and Hotel du Vin has had to

make salary and bonus freezes like many other employers, it believes what sets it apart is the focus on the future. It communicates to its staff that if they all work hard, achieve every sales opportunity and deliver amazing hospitality while keeping a lid on what is being spent, then they will share in the success of the firm. Rather than focusing on redundancies and there being fewer workers, the firm emphasises that there is more opportunity for job enlargement and job sharing. While these approaches have worked for Bacardi and, Malmaison and Hotel du Vin, it is important to remember that, during turbulent times, any changes must be in line with your unique business strategy. Sometimes, redundancies may be unavoidable in order to maintain business success and the employer brand in the longer term.

2 Resistance to change

In any major organisational change, there is likely to be some resistance and difficulty in meeting employee expectations. However, involving employees in the decision-making process can help them feel more involved in the change and believe that their contribution is being recognised.

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· Malmaison and Hotel du Vin highlights the

importance of involving employees' feedback in tough decision-making in a recent uniform redesign. It has turned the cost reduction required during 2009 into a positive by surveying the views of all employees during one of its staff `wear your own clothes' day. The company used this feedback to determine that employees sought more personality in their uniforms. Involving employees in that decision-making helped to make the uniform more personal while saving the company around £250,000 a year. When the uniform is launched, the firm can communicate that the decision was informed by employees' feedback. This will help to create employee engagement and motivation throughout the company during this period of change.

What are the key success factors in overcoming these challenges? · First, work out what the employer brand is and be able to articulate how it can be strengthened and improved. For example, identification is needed between the business strategy and the employer brand before you can begin to think about alignment.

· Gain senior leadership buy-in to the concept. It is

HR's role to ensure that senior leaders understand the concept and why it is important to the organisation. HR should work with the senior leadership team to define what the employer brand is and how they can `walk the talk'.

· Involve line managers in the roll-out of your

employer brand. Depending on where you are in the employer branding journey, line managers will have different roles. Early on in the journey organisations should obtain feedback on how the employer brand might be achieved and implemented. Later in the process you will want them to communicate the brand and ideally become brand champions.

· Communicate what you want to be known for as

an employer and what you are offering employees in terms of reward and experience.

· Keep the promises you make to both existing

and potential employees. This will ensure that employer branding and its links to total reward do not become an empty marketing campaign.

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Conclusion

All participants in this research agree that aligning rewards with the employer brand can help in attracting, retaining and motivating staff. Such alignment can demonstrate the employer's financial commitment to the employer proposition, which in turn assists in fostering a positive employee experience. Some companies in this study have made a conscious effort to demonstrate the alignment of total rewards to their employer brand, often as part of a branding campaign, for example McDonald's and Malmaison and Hotel du Vin. However, our research indicates that many other employers struggle to develop a link with their employer brand. The research team spent a long time trying to identify possible case study organisations for this study, which indicates just how few employers at the time were working at aligning their reward approach and employer brand. While most organisations do not have an established employer brand, in such a situation the current reward programmes can help play a key role in developing and communicating what the organisation is trying to achieve through its employer brand.

Branding and reward should be mutually supportive, emphasising the need to get the initial alignment correct and ensuring authenticity within the organisation. Aligning employer brand with reward can help companies meet employee expectations, from attracting them into the company to developing trust and commitment during their careers. During future research it would be interesting to determine whether there was a difference between organisations hiring temporary versus those hiring permanent staff with regards to the employer's focus on employer branding and its alignment with total reward. Overall, it would appear that while many organisations aspire to clearly align employer branding and total reward, for some the journey has only just begun. The CIPD and Mercer would like to thank all respondents for their participation in this key piece of research.

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References

CIPD. (2008a) Employer branding: your online companion for the journey. Practical tool. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2008b) Reward management. Survey report. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2009) Reward management. Survey report. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2010a) Employee outlook. Survey report. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010].

CIPD. (2010b) Pay management (UK) survey: employee pay attitudes. Survey report. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD and Mercer. (2009) Employer branding and reward research summary. Survey report. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. Mercer. (2010) Mercer Q4 salary indicator survey [Accessed 31 March 2010].

Further reading CIPD. (2007) Employer branding: a no-nonsense approach. Guide. London. Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2007) Employer branding: the latest fad or the future of HR. Research insight. London. Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2009) Employer branding: maintaining momentum in a recession. Guide. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2009) The impact of mergers and acquisitions on employer brands. Research summary. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2010) Your employer brand: keeping it real through mergers and acquisitions. Practical tool. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010]. CIPD. (2010) Employer brand. Factsheet. London: Chartered Institute of Personnel and Development. [Accessed 10 March 2010].

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Appendix: An overview of employer branding at the participant organisations

Abbey Please note that the information in this report is the perspective of Abbey prior to its re-brand as Santander UK.

· Abbey is in a `unique situation at the moment with · Much of the focus of employer branding is on

regard to employer branding' as the external brand has not been stable for some time. The company went through a number of logo changes prior to being acquired by the Spanish banking group Santander in 2004 when the brand logo changed yet again. · Since 2008 the group has acquired parts of Bradford & Bingley and Alliance & Leicester. The external brand is changing to Santander during the beginning of 2010, at which time the Abbey brand will be dropped. Abbey and Bradford & Bingley will change to Santander in the first half of 2010 while the Alliance & Leicester will follow suit in the second half of the year. · The new organisation is currently in the process of identifying working groups to help them define what that the brand will mean from an employer brand perspective, from an employment perspective, and from a reward perspective as well. · Unsurprisingly, Abbey (now Santander UK) are at the very early stages of the employer branding journey and have therefore thus far had difficulties defining the links between reward and their employer brand. Bacardi · Bacardi is a family owned spirits company with an impressive portfolio of premium brands including Bacardi Rum, Martini Vermouth, Bombay Sapphire Gin and Grey Goose Vodka. · Employer branding at Bacardi has two key angles: `Firstly, recruitment ­ potential employees and candidates see employer branding as a representation of the culture, the way that we are and they way that we do business. Secondly, retention ­ with a focus on engagement. This is about two way communication between the employees and the business, and being able to link the two together.'

defining what it means to work at Bacardi and incorporating the company values. · While Bacardi are quite far down the employer branding journey and were able to define the employer brand, they acknowledged there was more work to do in defining the links between employer branding, engagement and achieving outstanding results. Malmaison and Hotel du Vin · Malmaison and Hotel du Vin is recognised as the UK's leading lifestyle hotel group, with 1,900 bedrooms across the UK. · Employer branding is focused on aligning the external and internal brand: `What our guests see externally ­ the look, the feel and how we advertise in the marketplace for our guests actually ­ there's a link to what our employees should have in terms of the look and the feel and the experience. It's completely joined up. There isn't one look for the guests or employees. It has to be seen as seamless. If we sell the guests a good experience and it's a sexy/fun place, then we need to make sure that's what we do for employees.'

· Malmaison and Hotel du Vin do not explicitly

state what their employer brand is; instead they communicate what employees should expect from the company and what is expected of them in terms of service delivery, behaviour and appearance. These expectations are underpinned by a series of nine behaviours called `Our priorities'. · Malmaison and Hotel du Vin is well along the employer branding journey and was able to articulate the links between employer branding and reward.

Employer branding and total reward

17

McDonald's

· McDonald's is the world's largest chain of

· Midland Heart is currently working to define

hamburger fast food restaurants, serving over 60 million customers daily worldwide. · The employer branding focus at McDonald's has been linked to making sure that there is a more accurate and positive public perception of the brand: `Employer branding is about further enhancing the people story that we have within the business and the people programmes we have within the business to both change public perception and also to ensure existing employees feel better about the job they do.'

· They have developed an employer branding

exactly what their employer brand is. They are working to underpin the employer brand with their values and also to promote a one organisation feel (the organisation was recently formed from the merger of a number of smaller housing associations). · The concept of employer brand is new to Midland Heart and they are at the early stages of the employer brand journey. tw telecom

· tw telecom is a provider of managed voice and

data networking solutions for businesses.

· While the external brand is well defined at tw

proposition that is built around four key propositions: improvement opportunities, flexibility, an energising environment and continuous learning. · McDonald's is well along the employer branding journey and clearly articulated the links between employer branding and reward. Midland Heart · Midland Heart is one of the top ten housing and regeneration groups in the country and the largest based in the Midlands. · Employer branding at Midland Heart is about: `Defining what it is we want to sell externally to new applicants who want to join the organisation in our recruitment but it is also about selling ourselves internally ­ this is the part which is key to us at the moment. Defining what we want to be as an employer, how we'd like to let staff know about that and ensuring that we measure up to that. We do what we say we're doing.'

telecom, the employee branding is less well defined. The external brand work focuses on the relationship between employees and customers. It is the work within this latter group that tw telecom have interpreted to be employer branding: `Our brand is, in fact, our reputation and it comes to life through the solutions and service we provide our customers. We have made a conscious effort to support employees' understanding of the brand and recognise the line of sight between the work they perform and how they provide the tw telecom customer experience.'

· The company continually works to support its

brand in the marketplace and the role employees play in delivering on the promise of the brand.

18

Employer branding and total reward

About the CIPD The Chartered Institute of Personnel and Development (CIPD) is a globally recognised professional body for HR and development. With over 135,000 members we pride ourselves on supporting and developing those responsible for the management and development of people within organisations. Our aim is to drive sustainable organisation performance through HR, to shape thinking, to lead practice and to build HR capability within the profession. Our topical research and public policy activities set the vision, provide a voice for the profession and promote new and improved HR and management practices. www.cipd.co.uk

About Mercer Mercer is a leading global provider of HR consulting, outsourcing and investment services, with more than 25,000 clients worldwide. Mercer's global network of 17,000 employees, based in more than 40 countries, ensures integrated, worldwide solutions. Our consultants work with clients to develop solutions that address global and country-specific challenges and opportunities. Mercer is experienced in assisting both major and growing, mid-sized companies. Specifically of relevance to this report, Mercer's human capital business line is involved in establishing competitive and appropriate reward packages and performance management systems and has previously been involved in helping clients develop and enhance their employer brand. www.mercer.com

Employer branding and total reward

19

Chartered Institute of Personnel and Development 151 The Broadway London SW19 1JQ Tel: 020 8612 6200 Fax: 020 8612 6201 Email: [email protected] Website: www.cipd.co.uk

Incorporated by Royal Charter Registered charity no.1079797

Issued: April 2010 Reference: 4945 © Chartered Institute of Personnel and Development 2010

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