Reputation Management: Not Just a Means to an End

Reputation is intangible, but fundamental for the existence of every modern organization. It includes the summative experience that key stakeholders have with an organization. In most cases, managers agree that reputation is vital to their company and employees are one of the key links to managing it. Initially, Dr. Charles Fombrun, founder of the Reputation Institute, defined reputation as a perceptive representation of an organization’s previous behaviors and an estimate of its future actions. This definition of reputation, as the universal appeal of an organization for its key constituents, didn’t specifically emphasize employees. A later extension added that reputation is an estimate of the way an organization is experienced both, externally, among stakeholder groups (within its competitive and institutional surroundings), and internally, among employees. The question is – are employees a key stakeholder group or just ambassadors to reach other, more important constituents? Is measuring reputation among employees just a means to an end or is good reputation among employees the aim itself?

There are plenty of surveys on the relationship between effective employee communications and perceptions of their employer’s reputation. However, even though employees are often included in organizational reputation measurement and strategies, the main focus is mostly on how they paint the organization. Does their (mis)use of social media affect an organization’s reputation? Do their actions have consequences on how their employer is perceived? There is an increase in the number of articles with comments such as – “a growing concern for employers is how to manage their employees’ social media use and its potential impact on their reputation”.

The importance of employee perception on overall reputation is undeniable. There are numerous studies which show that the key to good reputation management lies in harmonizing employee and customer perceptions of a focal company. In a study by Davies and Chun, conducted in 2002, authors found that harmonious perceptions between employees and customers correlate with corporate success; companies with similar perceptions of its corporate personality are more successful than companies whose personality is evaluated differently by the two groups.

However, most of the studies focus on determining how internal publics shape other stakeholders’ perception of the organization. The problem of how employees are affected by the reputation is not nearly as frequent. Few studies that did focus on this question found that pride in membership is strongly related to the reputation of a company and correlates with employee satisfaction and commitment.

I don’t believe employees only need to add to reputation. On the contrary, they are one of the main reasons why a company has to strive for good overall impression. Employees who believe in their company’s reputation are happy to come to work each day, take pride in what they do (and the company as a whole), and are inspired to do the most they can. This is why companies should manage their reputation not through their employees, but for their employees. Internal stakeholders should become one of the main audiences for reputation strategies and campaigns. This means a shift in perception of reputation management, but will in the end prove to be the only possible route to long-term organizational success.

Dr. Ana Tkalac is professor of economics and business at the University of Zagreb.