A Matter of Reputation and Pride: Associations between Perceived External Reputation, Pride in Membership, Job Satisfaction and Turnover Intentions

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  • A Matter of Reputation and Pride:Associations between Perceived ExternalReputation, Pride in Membership, JobSatisfaction and Turnover Intentions

    Sabrina HelmRetailing and Consumer Sciences, University of Arizona, PO Box 210078, Tucson, AZ 85721-0078, USA

    Email: helm@email.arizona.edu

    This study investigates how job satisfaction and turnover intentions are related toexternal reputation as perceived by employees and their pride in membership. Based ona cross-sectional survey including 439 employees, it also provides insights into externalreputation as a possible source of collective pride. Study results indicate that, in agree-ment with social identity theory, outsiders views of the organization are closely associ-ated with employees pride in organizational membership as well as job satisfaction. Bothpride and job satisfaction mediate the relationship between perceived external reputationand turnover intentions. Hence, a favourable reputation matters in managing turnoverintentions and is closely related to employee pride and satisfaction. Tenure of employeesis positively associated with pride while intensive customer contact is negatively relatedto perceived external reputation and pride. Implications pinpoint the need for alignmentof reputation management and human resources management. Furthermore, managersneed to focus on new staff and employees with frequent customer contact and shouldimplement pride-building strategies according to the tenure of employees and intensity ofcustomer contact.

    Introduction

    Employee turnover is a major source of losses inproductivity and the cost per leaving employeehas a considerable negative impact on thebottom line (Shaw et al., 2005; Smith et al.,2012; Wright and Bonett, 2007). Also, firms donot necessarily lose undesirable employees andretain desirable ones (Ahr and Ahr, 2000;Branham, 2000). Improved understanding of thepsychological processes underlying withdrawalfrom the organization is therefore of continued

    academic and managerial interest (Van Dicket al., 2004).

    Job satisfaction and turnover intentions arecommonly investigated predictors of turnover(Griffeth, Hom and Gaertner, 2000; Van Dicket al., 2004). Other factors such as external repu-tation have received less research attentiondespite an increasing focus on reputation as anindicator of organizations adherence to com-monly expected rules (Adams, Highhouse andZickar, 2010; McWilliams and Siegel, 2001). Inan era of declining public trust in companies(World Economic Forum, 2010), working fororganizations that have a positive external repu-tation (i.e. those that are trusted and assessedfavourably by outsiders) is important. Since out-siders tend to identify employees of a company

    This study was made possible with a research grantfrom the German Research Foundation. The authorwould also like to thank Dr Anubha Mishra for herinvaluable insights regarding the data analysis.

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    British Journal of Management, Vol. , (2012)DOI: 10.1111/j.1467-8551.2012.00827.x

    2012 The Author(s)British Journal of Management 2012 British Academy of Management. Published by Blackwell Publishing Ltd,9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.

  • with what their organization stands for (Ash-forth and Mael, 1989; Cable and Turban, 2003),employees form meta-stereotypes based on theirimpressions of these outsider views. Being partof an organization with a favourable externalreputation is likely to instil pride in employees(Carmeli, 2004), potentially strengthening thebond between the employee and the organiza-tion. Working for an ill-reputed organization,however, can lead to embarrassment, discomfortand decreased self-esteem (Cable and Turban,2003), potentially triggering the decision to leavethe employer. The reputation-pride linkage maybe amplified because it is the most qualified anddesirable employees who are particularly selec-tive, demanding and sensitive to their employersreputation and who want to be able to take pridein their employer (Pruzan, 2001).

    This study investigates how employees per-ceptions of their organizations external reputa-tion are associated with turnover intentionswhilst also accounting for the roles of pride inmembership and job satisfaction. The findingsof the study are relevant for both academicsand practitioners. In the management literature,studies on perceived external reputation (PER)have been confined to analysing individual orsmall sets of organizations (see, for example,Bartels et al., 2007; Smidts, Pruyn and van Riel,2001); pride in membership (PIM), a collectiveform of pride, has also received little attention(Katzenbach and Santamaria, 1999). Cable andTurban (2003) provide the only empirical studyon the linkage of the two constructs in theirinvestigation of jobseekers perceptions of orga-nizational reputation and anticipated PIM. Todate, no study has extended their findings withregard to established employee relationships.

    Theoretically, this study sheds much-neededlight on the consequences of organizational repu-tation (Walsh et al., 2009) and can be extended(1) conceptually to include alternative forms ofpride and corporate associations such as internaland external reputation (Davies, Chun andKamins, 2010) or (2) methodologically to buildcausal models of the linkages between PER, PIMand employee productivity and profitability ofthe firm. Practically, the findings should helpmanagers reduce turnover intentions in the faceof a brilliant or blemished reputation and usereputation and pride enhancement as a differen-tiated employee retention strategy.

    Theoretical backgroundPerceived organizational reputation

    Organizational reputation is a sociocognitiveconstruct based on the knowledge, beliefs andimpressions residing in theminds of external stake-holders regarding the organization (Musteen,Datta andKemmerer, 2010; Rindova,Williamsonand Petkova, 2010) and can be an importantsource of competitive advantage (Fombrun andShanley, 1990; Zyglidopoulos, 2005). The stand-point of the beholder internal or external to theorganization determines conceptual nuances.Although reputational assessments among stake-holders are often aligned (Highhouse et al., 2009),there can be differences between organizationalinsiders perceptions of organizational outsidersviews of the reputation of the organization (PER)and how outsiders actually see it (organizationalreputation) (Brown et al., 2006). Studies on repu-tation in workforce-related contexts have includedvarious perspectives, such as interpreting organi-zational reputation as a signal jobseekers use todetermine attractiveness of employers (e.g. Cableand Graham, 2000; Cable and Turban, 2003;Gatewood, Gowan and Lautenschlager, 1993;Lemmink, Schuijf and Streukens, 2003; Riordan,Gatewood and Bill, 1997) or as a factor aiding inincreasing employee identification (Bartels et al.,2007; Smidts, Pruyn and vanRiel, 2001), employeecompliance (Kreps and Spence, 1985) andemployee commitment (Jones, 1996). Whatremains ambiguous in extant literature is howorganizational reputation might serve in bondingemployees.

    The current study uses social identity theory toexplain reputational bonding effects on employ-ees. Social identity refers to ones perception ofbelongingness or oneness with a group, where theindividual defines himself or herself in terms of theorganization(s) in which he or she is a member(Ashforth and Mael, 1989). This natural tendencyis a function of how one evaluates the groups onebelongs to, as well as how others evaluate thosegroups (Luhtanen andCrocker, 1992; Smith et al.,2012; Tajfel and Turner, 1979). Consequently, theemployees of a firm share a meta-sterotype theset of impressions members of a group expectothers to hold about the group (Owuamalam andZagefka, 2011; Vorauer, Main and OConnell,1998). Outsiders tend to identify employees withwhat their organization stands for based on the

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  • organizations reputation (Carmeli, 2004; Dutton,Dukerich and Harquail, 1994; Lemmink, Schuijfand Streukens, 2003; Lievens, Van Hoye andAnseel, 2007; Riordan, Gatewood and Bill, 1997;Walsh et al., 2009). Organizational reputation,then, may partly define organizational out-siders view of the organizations employees and,subsequently, determine organizational insidersmeta-stereotype. This meta-stereotype, or howemployees think outsiders see them, may be perti-nent when considering employment concernsgiven the public focus on, and declining trust in,companies (Adams, Highhouse and Zickar, 2010;McWilliams and Siegel, 2001).

    Pride in membership

    Pride is an emotion exceptionally important indriving both everyday and life-changing socialbehaviour (Tracy and Robins, 2007). In work-place settings, two forms of pride have been iden-tified. Personal pride is intrinsically motivated andrelies on personal achievements such as thequality of ones work and a sense of ones ownproper dignity or value and self-respect for workaccomplishments (Bouckaert, 2001; Lea andWebley, 1997). Collective pride, often overlookedin research, describes pleasure taken in beingassociated with ones employer (Bouckaert, 2001).Unlike conceptualizations of pride in group per-formance (Berkowitz and Levy, 1956), grouppride (Zander and Armstrong, 1972) or pride ingroup (Nadler, 1979) examined in contexts ofachievement from team member contributions,collective pride results primarily from relation-ships or affiliation, such as gender, race, nation-ality or organizational memberships (Lea andWebley, 1997; Tracy and Robins, 2007). Employ-ees take collective pride if an organization receivesrecognition in the outside world for being impor-tant, meaningful, effective, and [. . .] a worthwhilepart of the community (Arnett, Lavarie andMcLane, 2002, p. 90). In support of the currentstudys emphasis on collective pride, Bouckaert(2001) suggested that employees pride affects per-formance more strongly if based extrinsicallyinstead of intrinsically, such as through associa-tion with a reputable employer. While exactappraisal and determinants of pride have yet to beresearched (Lea and Webley, 1997; Tracy andRobins, 2007), authors seem to agree that pride isderived from both self-appraisals and others

    opinions (Arnett, Lavarie and McLane, 2002;Verbeke, Belschak and Bagozzi, 2004). Thus,employees pride in organizational membershipmay be enhanced by a favourable meta-stereotypeof the organization (Lievens, Van Hoye andAnseel, 2007; Ogbor, 2001), in accordance withsocial identity theory.

    Development of hypotheses

    Affiliation with an employer widely known for itspositive achievements boosts organization-basedself-esteem. This is supported by social identitytheory which posits that ones collective identitymay be positive or negative according to the meta-stereotype manifested in the appraisal of onessocial group, rather than ones personal attribu-tions or achievements within the group (Tajfeland Turner, 1986; Vorauer, Main and OConnell,1998). Working for an organization with afavourable reputation (reflected in a positivemeta-stereotype) enhances social identificationand is therefore likely to instil PIM (Bartels et al.,2007; Cable and Turban, 2003; Carmeli, 2004;Smidts, Pruyn and van Riel, 2001). This leads to

    H1: Perceived external reputation is positivelyassociated with pride in membership.

    While there have been no prior studies onemployees PER and their job satisfaction,Riordan, Gatewood and Bill (1997) analysed theeffect of corporate image (the overall perceptionthe employees themselves have of the organi-zation) on job satisfaction. The current studyextends these authors findings in focusing onPER which is specifically relevant from a socialidentity perspective. The recognition that theorganization has among external stakeholderscontributes to employees evaluation of theirworkplace by instilling a positive meta-stereotype.Working for an organization with a good reputa-tion should therefore be more satisfying thanworking for one with a bad reputation, leading to

    H2: Perceived external reputation is positivelyassociated with job satisfaction.

    Gunter and Furnham (1996) surveyed employ-ees of four public sector organizations finding thatmost were satisfied with their job but did not nec-essarily experience pride. A direct positive rela-tion between the two variables has been identifiedby Arnett, Lavarie and McLane (2002) as well as

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  • Jitpaiboon, Park and Truong (2006); however,these studies were limited in genera-lizability by the sole use of hotel and casinoemployees. The current study expands beyond anexclusive focus on front-line employees in directcustomer contact. In addition, this study suggestsa positive relation between pride and job satisfac-tion based on the theoretical argument that prideenhances self-esteem (Tracy and Robins, 2007)and provides reassurance in liking ones work-place. This leads to

    H3: Pride in organizational membership is posi-tively associated with job satisfaction.

    Pride is regarded as a mechanism ensuringconsistency (Lea and Webley, 1997). Therefore, ifemployees perceptions and attitudes toward theorganization are positive, such as with increasingPIM, they are likely to remain with it (Maertz andGriffeth, 2004), leading to

    H4: Pride in organizational membership isnegatively associated with turnover intentions.

    Employees with a favourable impression oftheir organizations external reputation may beless inclined to articulate turnover intentions(Mignonac, Herrbach and Guerrero, 2006).Unlike when an employee disassociates due to anunfavourable reputation, if perceptions of thecompany are positive the favourable meta-stereotype may cause psychological comfort. Thiscould positively affect social identification which,in turn, may reduce turnover intentions. Thus, amechanism for attachment is created which moti-vates staying (Maertz and Griffeth, 2004;Riordan, Gatewood and Bill, 1997).

    However, employees might differ regardingtheir sensitivity to their employers reputation.

    With reference to Cable and Turban (2003), whoargued that job applicants would be willing toaccept lower wages if only they could join organi-zations with favourable reputations, Mignonac,Herrbach and Guerrero (2006) pointed out thatsuch an effect might not last, specifically if otheraspects of the job are less advantageous. Thisargument can be extended to current employees ofan organization who would not necessarily leavetheir employer because of a deteriorating repu-tation and a subsequently unfavourable meta-stereotype as long as they find other reasons to beproud of their employer or are satisfied with theirjob. This reasoning would explain why organiza-tions with unfavourable reputations still havesome leeway in retaining employees. It may there-fore be expected that the relation between PERand turnover intentions is fully mediated by PIMand job satisfaction, leading to

    H5: Pride in membership and job satisfactionfully mediate the relation between perceivedexternal reputation and turnover intentions.

    The relation between job satisfaction andturnover intentions is well documented in the lit-erature (e.g. Porter et al., 1974; Shore andMartin,1989; Tett and Meyer, 1993). Cognitions aboutthe job impact subsequent judgement-drivenbehaviours such as quitting (Fischer, 2000),meaning that, with increasing job satisfaction,disassociation is less likely (Maertz and Griffeth,2004; Wright and Bonett, 2007). This leads to

    H6: Job satisfaction is negatively associatedwith turnover intentions.

    The conceptual model for the study is summa-rized in Figure 1.

    Turnoverintentions

    Perceivedexternal

    reputation

    Pride in membership

    Job satisfaction

    H1+

    H2+

    H4-

    H3+

    H5-

    H6-

    Figure 1. Theoretical model of hypothesized relations

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  • MethodProcedure and respondents

    Rather than focusing on a single company orindustry context, this study sought to investigatethe research question across contexts. Companiesthat are prominent in the public perception wereincluded to ensure that employee respondentscould easily assess their employers external repu-tation. Market prominence is closely related toreputation and determines the degree to which anorganization is visible and well known (Rindova,Williamson and Petkova, 2010).

    The study was conducted in cooperation withthe alumni association of a graduate businessschool in the USA that helped in identifyingalumni working for companies represented in For-tunes index of Americas Most Admired Compa-nies (AMAC) (see Kreiner and Ashforth, 2004,for a comparable study design). The alumni wereemployed in different industries all across thecountry. However, given their educational back-ground in business studies, they did not representthe array of jobs and position levels deemed nec-essary for providing sufficient variance. Hence,they were not asked to take part in the studythemselves but to motivate colleagues in theirorganization to participate. Alumni were con-tacted first by email, followed by telephone, and

    asked to distribute an online-survey link to ten to15 colleagues in different departments and on dif-ferent hierarchical levels. On average, each par-ticipating alumnus sent the link to 14 colleagues(1008 contacts). This procedure led to 439 com-pleted surveys. Table 1 provides an overview ofrespondent characteristics.

    Measures

    Perceived external reputation. In this study, PERdenominates employees meta-stereotypemeaningtheir perceptions of how their organization isassessed by people external to the organization.Specifically, respondents were asked How doyou feel people outside your company would rateit on the following attributes? The eight itemswere adopted from Fortunes AMAC ranking(Fortune, 2012;1 see also Fombrun and Shanley,1990; Musteen, Datta and Kemmerer, 2010;

    1Until 2008, Fortune published Americas Most AdmiredCompanies (AMAC) (Fortune, 2008) which since thenwas merged with Fortunes Worlds Most AdmiredCompanies Index. The original items used in the AMACare quality of management, financial soundness, qualityof products and services, ability to attract, develop andkeep talented people, innovativeness, responsibility forthe community and the environment, long-term invest-ment value, wise use of corporate assets. An additional

    Table 1. Respondent characteristics

    Variables Answer categories (percentage)

    Gender Female (43.3) Male (56.6)Age Younger than 25 years (3.6) 46 to 55 years (19.9)

    26 to 35 years (38.8) 56 to 65 years (4.9)36 to 45 years (32.5) Older than 65 years (0.2)

    Employment Full-time (99.1) Part-time (0.9)Tenure in current position Less than 1 year (26.4) 11 to 15 years (1.6)

    1 to 5 years (58.1) 16 to 20 years (1.2)6 to 10 years (11.5) More than 20 years (1.2)

    Tenure in current company Less than 1 year (4.7) 11 to 15 years (10.8)1 to 5 years (37.4) 16 to 20 years (7.1)6 to 10 years (26.8) More than 20 years (13.2)

    Employee group Executive (3.1) Administrative/clerical (6.8)Management (47.3) Production worker (0.9)Professional (39.3) Other (2.6)

    Departmental affiliation General management (5.7) Marketing/advertising/sales (44.9)Operations/production (9.9) Supply management (3.1)Finance/accounting/controlling (17.2) Othera (19.3)

    Customer contact Every day (27.1) Hardly ever (31.3)Several times per week (15.3) Never (8.9)Several times per month (17.4)

    aThe category other contained research and development, customer service, human resource management and others.

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  • Zyglidopoulos, 2005), measured on the original11-point scale ranging from 0 (poor) to 10 (excel-lent) (a = 0.93; composite reliability (CR) = 0.93;average variance extracted (AVE) = 0.63). Theitems used in the AMAC measure individualperceptions of a company based on a clusterof corporate associations representing differentstakeholders expectations (Berens and van Riel,2004). This approach fits the notion of PER par-ticularly well as respondents were asked to assesshow others view their employer. While otherstudies approach PER or perceived external pres-tige, respectively, as a global organizational con-struct (e.g. Bartels et al., 2007; Smidts, Pruyn andvan Riel, 2001), this study considers differentactivities and performances of the organization asindicative of others holistic impression of theorganization, as supported by Carmelis (2004, p.448) argument that perceived external prestige is afunction of several criteria that represent theoverall behaviour of the organization.

    Pride in membership. PIM was measured usingthe two items suggested by Cable and Turban(2003). A third item was added (I am proud to bepart of my company) in order to fulfil com-mon recommendations of the domain samplingmodel (Nunnally and Bernstein, 1994). Itemswere measured on a five-point scale rangingfrom 1 (strongly disagree) to 5 (strongly agree)(a = 0.90; CR = 0.87; AVE = 0.69).

    Job satisfaction. Job satisfaction is understoodas an evaluative assessment of job attributes(Fischer, 2000) and was measured using sixitems ranging from 1 (strongly dissatisfied) to 5(strongly satisfied). The question was How satis-fied are you with the following aspects of yourjob? and the items were taken from Riordan,Gatewood and Bill (1997) who based theirmeasure on the job description index (JDI). TheJDI has been used in early studies (e.g. Smith,Kendall and Hulin, 1969) as well as contemporarystudies (e.g. Dormann and Zapf, 2001). One addi-tional item from the JDI was added (satisfactionwith supervisor) to complete the six-item measure(a = 0.82; CR = 0.80; AVE = 0.41).

    Turnover intentions. Two items of this constructwere initially suggested by Mobley, Horner andHollingsworth (1978) and measure intentions toquit and preference for alternative employers.Three additional items address the need forvariety and change in work life to capture thenotion that many employees are open to newopportunities and passively looking for jobs(Ployhart, 2006). The five items for turnoverintentions were measured on a five-point scaleranging from 1 (strongly disagree) to 5 (stronglyagree) (a = 0.83; CR = 0.82; AVE = 0.50).

    All items met the requirements of an item-sorting task (Anderson and Gerbing, 1991) whichwas conducted with 29 graduate business stu-dents. The final survey instrument (summarizedin Table 2) was pretested by presenting it to 60employee respondents.

    Measurement validation

    To assess the quality and test the validity of themeasures, confirmatory factor analysis was con-ducted as proposed by Anderson and Gerbing(1988) using LISREL 8.8. PER, PIM, job satis-faction and turnover intentions were representedby four latent variables. This oblique factor modelwas found to be a good fit to the input data.Model fit was assessed by using the chi-squaredratio (c2(197) = 438.15, p < 0.001), the goodness-of-fit index (GFI = 0.91), the comparative fitindex (CFI = 0.99), the adjusted goodness-of-fit index (AGFI = 0.89), the normed fitindex (NFI = 0.98), the incremental fit index(IFI = 0.99), the standardized root mean residual(SRMR = 0.050) and the root mean square errorof approximation (RMSEA = 0.054). With theexception of the AGFI, all indices reached goodor acceptable levels (e.g. Bagozzi and Yi, 1988;Hu and Bentler, 1999). All indicators loaded sig-nificantly (p < 0.001) and substantively on theirrespective constructs with all standardized factorloadings exceeding 0.40 (see Table 2) in support ofconvergent validity of the measures (Steenkampand van Trijp, 1991). Cronbachs a ranges from0.82 to 0.93 and CR from 0.80 to 0.93, exceedingrecommended thresholds (Bagozzi and Yi, 1988).Means, standard deviations and construct corre-lations are listed in Table 3. AVE ranges from41% to 69% and all squared covariances aresmaller than the AVE (see Table 4), satisfying therequirements for discriminant validity (Fornell

    item, globalness, was used for a short period of time andwas later excluded. It is also not included in the analysisof the current study.

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  • and Larcker, 1981). However, for a well-established scale, the AVE for the job satisfactionconstruct is rather low (41%).

    Since only one source (i.e. employees self-reports) was used to provide an assessment of thepredictor and criterion variables, a combinationof procedural remedies as well as statistical con-trols was applied to prevent or test for common

    methods bias (CMB). Procedural remediesincluded extensive pretesting of the survey ins-trument including telephone follow-ups withrespondents to reduce the possibility of itemambiguity, inclusion of introductory texts beforeeach question to cognitively engage the respond-ent and create a time lag between measurementof the predictor and criterion variables, use of

    Table 2. Items and standardized factor loadings

    Indicator Description Standardizedfactor loading

    t-valuea

    Perceived external reputationPER_1 Quality of top management 0.84 21.77PER_2 Quality of products/services 0.82 20.72PER_3 Innovativeness 0.76 18.70PER_4 Ability to attract, develop, and retain talented employees 0.83 21.29PER_5 Wise use of corporate assets 0.84 N/AbPER_6 Responsibility for the community and the environment 0.66 15.13PER_7 Financial soundness 0.74 17.81PER_8 Long-term investment value 0.83 21.32

    Pride in membershipPIM_1 I am proud to be part of my company 0.92 N/AbPIM_2 I am proud when others associate me with my company 0.77 18.16PIM_3 I am proud to tell others that I work for my company 0.79 18.96

    Job satisfactionJS_1 Your current salary (compared to industry standards) 0.51 9.61JS_2 Your work tasks/daily responsibilities 0.69 12.96JS_3 Job/career promotions received so far 0.67 16.60JS_4 Opportunities for advancement within your company 0.73 N/AbJS_5 Your co-worker(s) 0.55 10.41JS_6 Your supervisor(s) 0.65 12.20

    Turnover intentionsTI_1 I would prefer to work for another company 0.88 N/AbTI_2 I like to try new things and think about looking for a new job with a different company 0.70 15.63TI_3 I will soon quit my company 0.72 16.20TI_4 I feel its time for a new challenge in my work life 0.59 12.64TI_5 I think its boring to stay with the same company for a long time 0.57 12.24

    at-value for each indicator ( 3.29 to be significant at p = 0.001).bN/A, indicators fixed at 1 in the confirmatory factor analysis for setting the scale do not have a t-value.

    Table 3. Construct correlations

    Variables Mean SD 1 2 3 4 5 6 7

    1. PER 8.35 1.82 2. JS 3.78 0.79 0.57** 3. PIM 4.21 0.85 0.66** 0.55** 4. TI 2.34 0.92 -0.44** -0.58** -0.50** 5. Age n/a n/a 0.08 0.03 0.06 -0.00 6. Gender n/a n/a -0.09 -0.05 -0.07 0.07 0.02 7. Tenure 3.18 1.46 0.06 0.12* 0.15** -0.22** 0.59** -0.01 8. Contact 2.80 1.37 -0.13* -0.11* -0.17** 0.14** -0.13** -0.07 -0.07

    PER, perceived external reputation; JS, job satisfaction; PIM, pride in membership; TI, turnover intentions.*Correlation is significant at the 0.05 level.**Correlation is significant at the 0.01 level.

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  • different scale formats and scale anchors for pre-dictor and criterion variables and, with the excep-tion of the 11-point scale for PER, provision ofverbal labels for all points of the scales. Thecommon method variance for the model wastested by controlling for the effects of a directlymeasured latent methods factor as suggested byPodsakoff et al. (2003). Social desirability (SD)was chosen as the latent methods factor as it hasbeen recognized as a widespread potential bias inorganizational research (Spector, 2006). SD wasmeasured using five items from Crowne andMarlowe (1960). Model comparison between therestricted model with constrained factor loadings(to zero) from SD to the indicators of all latentconstructs (c2(312, N = 431) = 592.11, p < 0.001;GFI = 0.91; CFI = 0.99; AGFI = 0.89; NFI =0.97; IFI = 0.99; SRMR = 0.077; RMSEA =0.047) and the confounded measurement modelwith free estimation of the factor loadings (c2(294,N = 431) = 605.49, p < 0.001; GFI = 0.91; CFI =0.98; AGFI = 0.88; NFI = 0.97; IFI = 0.98;SRMR = 0.064; RMSEA = 0.049) resulted in anon-significant chi-squared, Dc2(18) = 13.38,p > 0.05. The non-significant chi-squared indi-cates that the relations between SD and indicatorsof latent constructs were not supported. In addi-tion, the CFI of 0.99 for the restricted model indi-cated the degree to which the factor correlationscontributed to the overall fit. The CFI of 0.98associated with the confounded measurementmodel actually demonstrated minor deterio-ration in model fit contributed by SD. Therefore,CMB appears not to be a significant issue in thisstudy.

    Control variables

    Prior research has indicated that some personalfactors may affect an employees attitudes and

    intentions regarding an organization. Biographi-cal variables such as age, gender and tenure werefound to impact perceptions of job satisfactionand corporate pride (Gunter and Furnham,1996) or perceptions of organizational reputation(Jones, 1996). The current study therefore con-trols for the effects of age, gender, tenure with thecurrent employer, and frequency of customercontact. The latter control is motivated by thenotion that employees who directly interact withcustomers are more exposed to outsiders opin-ions of the organization (Davies, Chun andKamins, 2010) which in turn might make themmore aware of organizational reputation.

    ResultsTest of direct effects

    Using LISREL 8.8, a structural equation modelwas fitted to the study item set, with 22 observedvariables and latent variables representing PER,PIM, job satisfaction and turnover intentions.Hypotheses were assessed by examining the stand-ardized regression coefficients from the structuralmodel. The model indicates an acceptable togood fit with the data with all indices above rec-ommended levels: c2(269) = 557.83, p < 0.001;GFI = 0.91, CFI = 0.98, AGFI = 0.88, NFI =0.97, IFI = 0.98, SRMR = 0.047, RMSEA =0.050. All hypothesized direct effects were signifi-cant (see Figure 2). The path from PER to jobsatisfaction is significant (b = 0.18, p < 0.001), as isthe path to pride (b = 0.33, p < 0.001). The pathsfrom PIM to job satisfaction (b = 0.43, p < 0.001)and to turnover intentions (b = -0.40, p < 0.001)are both significant. In accordance with extensivedocumentation in the literature (e.g. Shore andMartin, 1989; Tett and Meyer, 1993), this studyalso establishes a negative relation between jobsatisfaction and turnover intentions (b = -0.63,p < 0.001).

    These results are valid when controlling for age,gender, tenure and customer contact. All controlvariables were included as exogenous variables ineach structural equation predicting the endog-enous variable. For example, age, gender, tenurewith the current employer, and frequency of cus-tomer contact were included in the structuralequation exploring the influence of PIM and PERon job satisfaction. This procedure ensures thatthe equation explained the influence of PIM and

    Table 4. Test for discriminant validity

    PER JS PIM TI

    PER 0.63JS 0.31 0.41PIM 0.42 0.31 0.69TI 0.18 0.34 0.25 0.50

    PER, perceived external reputation; JS, job satisfaction; PIM,pride in membership; TI, turnover intentions.AVE is shown in the diagonal and squared covariances belowthe diagonal.

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  • PER on job satisfaction after having accountedfor the variance explained by the control vari-ables. Similar procedures were carried out for allequations including the prediction of the depend-ent variable by the control variables.

    Neither age nor gender has an influence onthe study variables. However, tenure positivelyinfluences pride (b = 0.065, p < 0.01) and nega-tively affects turnover intentions (b = -0.099,p < 0.001). The study results also suggest thatcustomer contact negatively influences PER(b = -0.17, p < 0.05) as well as PIM (b = -0.047,p < 0.05).

    Mediation analyses

    No significant association between PER andturnover intentions could be established whenboth PIM and job satisfaction were simultane-ously introduced into the structural model. Todetermine whether PIM and job satisfaction fullymediate this link as proposed in Hypothesis 5, amultiple mediation process was employed usingbootstrapping analyses to estimate direct andindirect effects with multiple mediators (Preacher,Rucker and Hayes, 2007). Turnover intentionswas entered as the dependent variable, PER wasentered as the predictor variable, and both PIMand job satisfaction were entered as proposedmediators in the SPSS macro created by Preacherand Hayes.2 As outlined by Buffardi and Camp-bell (2008), this statistical procedure has threeadvantages: (a) multiple mediators can simultane-ously be tested; (b) a normal sampling distribu-

    tion is not required (see also Preacher and Hayes,2004; Shrout and Bolger, 2002); and (c) thenumber of inferential tests is minimized reducingthe likelihood of type 1 error. The bootstrapresults indicated that the total effect of PER onturnover intention (total effect = -0.21, p < 0.001)only became non-significant when both PIM andjob satisfaction were included in the model (directeffect = 0.01, p = 0.65). Furthermore, the analysesrevealed that the total indirect effect of PER onturnover intentions through the two mediatorswas significant, with a point estimate of 0.01 anda 95% bias corrected and accelerated (BCa) boot-strap confidence interval (CI) of -0.2720 to-0.1729. This indicates that PIM and job satisfac-tion together fully mediate the path from PERto turnover intentions after having statisticallycontrolled for age, gender, tenure and customercontact. The specific indirect effects of each pro-posed mediator showed that PIM, with a pointestimate of -0.2408 and 95% BCa CI of -0.1166to -0.0339, and job satisfaction, with a point esti-mate of -0.5471 and 95% BCa CI of -0.1900 to-0.1114, were both unique mediators (see in detailPreacher and Hayes, 2008).

    Discussion

    The data support all of the six initial hypotheses.Results indicate that, in agreement with the litera-ture on social identification, outsiders views ofthe organization as perceived by employees arestrongly associated with employees pride inorganizational membership and, to a lesserdegree, with job satisfaction. PER has a directrelation with PIM and job satisfaction, support-

    2The macro is available at http://www.afhayes.com/spss-sas-and-mplus-macros-and-code.html.

    Turnoverintentions

    Perceivedexternal

    reputation

    Pride in membership

    Job satisfaction

    0.33***t=16.34

    0.18***t=4.75

    *** p < .001

    0.43***t=4.73

    -0.40***t=-4.03

    -0.63***t=-7.03

    0.06t=1.52

    R2=0.60

    R2=0.54

    R2=0.62

    Figure 2. Model of the structural relations between PER, PIM, job satisfaction and turnover intentions

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    2012 The Author(s)British Journal of Management 2012 British Academy of Management.

  • ing Hypotheses 1 and 2. There is also a strongassociation between PIM and job satisfaction insupport of Hypothesis 3. Turnover intentions arenegatively associated with PIM and job satisfac-tion, supporting Hypotheses 4 and 6. While bothPIM and job satisfaction are negatively associatedwith turnover intentions, PER is not, at least notin the full model. The direct relation between PERand employees turnover intentions is fully medi-ated by PIM and job satisfaction, thus supportingHypothesis 5.

    Keeping employees from quitting their job doesnot seem to be a matter of reputation. Turnoverintentions are not directly related to perceptionsof the external reputation of the company, but aremostly explained by employees satisfaction withtheir job. But PIM matters; its association withturnover intentions is rather substantial. Theresults of the mediation analysis suggest that jobsatisfaction is more likely to keep employees fromquitting if employees are proud of belonging totheir company. However, employees are less likelyto take pride in being affiliated with companieswith an unfavourable reputation as can be seenfrom the strong direct relation between PER andPIM. In addition, pride is directly and stronglyassociated with turnover intentions; decreasedpride due to affiliation with a negatively reputedemployer could indeed go hand-in-hand withhigher turnover intentions. Hence, a favourablemeta-stereotype does seem to be beneficial formanaging fluctuations in employment, in additionto being closely related to pride and satisfactionamong staff.

    The length of time in which an employee isactively involved with an organization is posi-tively associated with PIM and negatively associ-ated with turnover intentions. The weak butsignificant relations imply that the longer employ-ees stay with a firm, the more pride they take inmembership and the less likely they are to quittheir jobs.

    While this finding may not come as a greatsurprise, it is noteworthy that frequency of cus-tomer contact is negatively related to PER andPIM. This implies that employees who experiencefrequent customer interaction have worse percep-tions of their employers external reputation (theirgroups meta-stereotype) and take less pride inbeing associated with the company than employ-ees with no or little customer contact. While thisstudy does not provide data on the actual view of

    customers or other external stakeholders norcompare customer-contact and back-office per-sonnel of the same firm, the perceptual gapbetween employees with high versus lowcustomer-contact frequency requires attention.Internal and external reputations of a firm maybe related. Customers reputational perceptionsaffect employees perception and subsequentbehaviour towards customers and vice versa.Potential differences between perceived internaland external reputation may foster or attenuatesales (Davies, Chun and Kamins, 2010).However, it remains unclear how gaps betweenthe perceptions of customer-contact and back-office personnel regarding their meta-stereotypeaffect employees and the organization. Smidts,Pruyn and van Riel (2001, p. 1060) speculatedthat the extent of exposure to information aboutoutsiders views of the organization might predictlow perceived external prestige but did not elabo-rate which group might be more prone to holdlower perceptions. The current studys resultssuggest that frequent customer interaction is asso-ciated with less favourable PER, possibly becausecustomer-contact personnel experience first-handnot only the successes but also the failures of thefirm. Their exposure to dissatisfied customers andproduct and service failures might also contributeto diminished PIM. As Dutton, Dukerich andHarquail (1994) noted, a members readiness todefine himself or herself as a member of a particu-lar social group increases with greater contactwith that organization. Conversely, greatercontact with outsiders might decrease perceivedlinkage with the organization.

    Managerial implications

    Managers aiming at promoting satisfaction anddecreasing fluctuation among their employeesshould be aware that reputation and pride matterin achieving both goals; however, these variablesare not entirely controllable by the employer.Rather, they are tied to the social identity of theemployee which is partly shaped by outsidersviews (Ashforth and Mael, 1989; Carmeli, 2004;Luhtanen and Crocker, 1992). Reputation man-agement in practice often fails to holisticallyaddress how different stakeholders perspectivesof the company impact each other. The studyresults clearly indicate that managers are welladvised to take into account the effects that exter-

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    2012 The Author(s)British Journal of Management 2012 British Academy of Management.

  • nal reputation has on employees since both prideand job satisfaction may be strengthened byenhancing these perceptions. Thus, highlightingthe firms positive external reputation may differ-entiate the firm from competitors to a prospectiveemployee (Edwards, 2009), aiding in employerbranding strategies. This idea is supported bystudies on meta-stereotyping which indicate thatemphasising the positive views that others haveabout a given social identity might be one meansof encouraging stronger affective ties and solidar-ity with the in-group (Owuamalam and Zagefka,2011, p. 535). For example, the Coca-ColaCompany annually reports on their advancementin the AMAC and the blog Nuts about South-west run by customers and employees discussesthe airlines top ranking. Avnet, one of theworlds largest industrial distributors, uses its topindustry ranking achieved in the AMAC in 2011to attract potential employees and explain whyAvnet is admired and a good employer. Employeecommunication may also be used to augmentinternal perceptions of reputation, specifically iforganizational values expressed in employee-directed communication are aligned with exter-nally communicated brand values (Davies, Chunand Kamins, 2010). Managers should be cogni-zant that employees differ in their impressions oftheir organizations reputation and should takespecific communication measures to particularlyreach and influence individuals with relativelynegative perceptions of their companys prestige(Smidts, Pruyn and van Riel, 2001, p. 1059).

    In particular, managers should focus on influ-encing new staff and employees with frequent cus-tomer contact as these two groups seem to have aworse impression of how outsiders view theiremployer. This is especially salient due to poten-tially negative effects for the organization result-ing from the interrelatedness of internal andexternal reputation and subsequent behaviouralconsequences in the customeremployee interac-tion. Managers should consider the consequencesof reputational gaps among different groups ofemployees in the same organization, such asmight occur between customer-contact and back-office personnel (Davies, Chun and Kamins,2010).

    Regarding new employees, Smith et al. (2012,p. 47) explained that (n)ewcomers are unlikelyto begin their jobs with a fully developed senseof identification with their new organization,

    making them vulnerable to early turnover. Givena comparatively lower level of pride in organiza-tional membership for new employees andcustomer-contact staff, pride aids less in improv-ing job satisfaction and retention. Thus, managersare encouraged to adapt pride-building strategiesaccording to tenure and frequency of customercontact of their employees. So far, pride enhance-ment is not a common managerial strategy(Arnett, Lavarie and McLane, 2002) and mostorganizations do not track the status of PIMamong employees. However, by increasing prideand potentially by building and demonstratingshared values (Katzenbach and Santamaria,1999) among the workforce, higher satisfactionand decreased turnover intentions may beachieved.

    Limitations and suggestions for future research

    Given that the sample was restricted to employeesof large, visible companies, validity is dependenton the degree to which employees can assess howthe outside world views their organization (seealso Bartels et al., 2007). In addition, the modelpresented is strictly correlational in nature and,given the cross-sectional design, the causal orderof the proposed correlates of PER cannot beassessed. While acceptable for this study due tothe influence of perceptions on turnover inten-tions, future research may extend the findingsmethodologically. Future studies could alsoinvestigate the effects of organizational reputa-tion by integrating additional data sources, suchas actual turnover or employee productivity data,reputation data available from external rankings,and/or through employing a longitudinal design(Podsakoff et al., 2003). Finally, studies might usean alternative satisfaction measure, as the lowAVE established for job satisfaction in this studyis noted.

    Conceptually, future research might extend thestudy findings by investigating the effects of PERon other variables relevant for human resourcesmanagement, such as for instance employee pro-ductivity or citizenship behaviours. Studies couldalso address how perceptions of reputation areformed and what discrepancies between iden-tity, internal and external reputation, and PERmean for stakeholders or the organization itself(Brown et al., 2006; Davies, Chun and Kamins,2010). This would enhance our understanding of

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  • employee motivation in actively shaping externalreputation, as well as how companies with anunfavourable reputation may manage to attractjob applicants and keep employees, beyond offer-ing higher wages. Although industry effects couldnot be established in the current study, it seemsreasonable to assume that employees working fora company embedded in a badly reputed industry(for instance, the tobacco industry; Dowling,2006) need to discount PER to avoid cog-nitive dissonance. For these employees, meta-stereotypes could be less closely related to prideand job satisfaction.

    Pride itself also merits further research (Arnett,Lavarie and McLane, 2002; Cable and Turban,2003). More complex conceptualizations of pridecould use a multidimensional approach, specifi-cally to investigate how this concept is related toorganizational identification and pride, includingdrivers and outcomes (Tracy and Robins, 2007).Lea and Webley (1997) suggested that pride is aform of non-pecuniary work motivation, imply-ing that companies instilling high levels ofemployee pride could lower wages. Given theassociation between PER and PIM identified inthis study, companies with a favourable reputa-tion might be more successful in navigating thetrade-off between pride and wages; however, theycould also be prone to lose their good internal andexternal standing if their salary strategy were pub-licly discussed and criticized. Finally, futureresearch could develop a better understanding ofhow and why customer-contact frequency is nega-tively associated with PIM and PER.

    Conclusion

    The present study extended previous research inseveral important ways. (1) A model was pro-posed and tested that incorporates two new(previously neglected) correlates of employee sat-isfaction and turnover intentions: PER andPIM. Both seem influential in enhancing humanresources performance. The results also add to abetter understanding of possible consequences oforganizational reputation, an area identified asunder-researched (Walsh et al., 2009). (2) Theinterplay of organizational reputation and pridewas analysed in detail. It was assumed that PER isrelated to the degree of pride because it is impor-tant for employees how others perceive them as

    representatives of their organization. The datasupport the theoretical notion that PER might bean external drive toward pride with considerableimpact. (3) The study provided insights into col-lective pride, a form of pride which so far hasreceived little theoretical and no empirical atten-tion (Katzenbach and Santamaria, 1999). The rel-evance of gaining a comprehensive understandingof the role PER and pride play in workplace set-tings was emphasized, adding (4) the perspectiveof current employees to prior research that mostlyfocused on jobseekers. (5) Finally, the results ofthe mediation analysis show how organizationsmight manage to reduce turnover intentions inthe face of a brilliant or blemished reputation.Additionally, the analysis provided advice on dif-ferentiated strategies of reputation and prideenhancement targeted at employees according totheir tenure and frequency of customer contact aswell as an impetus for future research into theseareas of study.

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  • Sabrina V. Helm is Associate Professor of Retailing and Consumer Sciences at the University ofArizona. In her research, Dr Helm focuses on corporate reputation, its measurement, management,and its impact on diverse stakeholder groups. She also conducts research studies on customersreferral behaviour and referral campaigns. Among others, her research has been published in Journalof Service Research, Journal of Business Research and Industrial Marketing Management.

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