Your Organization’s Reputation and Its Ability to Produce Revenue

by | Nov 9, 2023 | I-O Psychology, Workplace Culture | 0 comments

Could the way your employees perceive your company hamper your sales?

Late in the day, the entire staff of employees of a small firm received an email outlining the highlights of several months’ work relegated to that single month. In other words, the email listed highlights for that month’s purported revenue “wins.” The email did not come from executive management nor from the ownership. It was sent by the administrative assistant in apparent celebration. The email contained only acknowledgments of the accomplishments of the higher-level executives of the company by name; no other employee received recognition. This email came several days after a vice president’s memo to the entire company that the organization risked lower-than-expected revenues and announcements in meetings regarding budget cuts. It also followed the termination of several key staff members, and it preceded the termination of an entire department.

Throughout the office, you could hear the eyes roll. This rouse fooled no one except, perhaps, the executives who thought this email might inspire instead of dishearten.

Effect of Reputation on Employee Experience

Workers expect truthfulness, justice, and fairness from their employers. When organizational leaders boast of themselves and their cronies, fail to recognize team members’ contributions, and terminate team members without explanation, distrust ensues.

Organizational commitment depends on the psychological contract an employee has with the employer. Psychological contract theory posits that if employees possess job satisfaction through their employment experiences, they will more aptly view the workplace as the employer of choice. Word-of-mouth praise and recommendations for the employer on platforms such as Glassdoor and Indeed stem from the organization’s ability to positively brand itself as a good place at which to work. When branding extends outside of the workplace to external audiences, the organization improves its ability to attract job seekers, investors, and customers.

When employees feel valued, safe, challenged, heard, and respected, they become more apt to speak or write highly of the employee. Perma-Seal, a family-owned waterproofing company operating for decades in the Chicagoland area, for instance, demonstrates its commitment to providing a positive experience for its staff. Subsequently, they feature prominently workers from various departments praising the company and the people with whom they work.

Conversely, organizations with ineffective transactional leadership, inequity within rewards and compensation structures, unmotivated staff, and aggressive or coercive management can deliver stunningly poor experiences. This begets a lack of employee engagement, attrition, and negative effects on external stakeholders.

Effect of Reputation on Sales

If a corporate brand provides a valuable asset to an organization, the reputation the brand represents provides much of that value. After all, people do business with companies they know, like, and trust. The trust factor occurs through reputation or, at least, a perceived reputation. A positive brand through reputation provides a distinct and competitive advantage. Companies perceived to have a better reputation than others may attract revenue that customers may have otherwise spent with competing organizations.

Reputation tends to accumulate over time, positively and negatively. While critical incidents may result in someone to experience a certain affect (positive or negative) toward an organization, the total of past and present actions provide evidence of the character of the company. Kircova & Esen (2018) discuss customer-based reputation (CBR) on both one’s reactions to products and services plus one’s reaction to services and interactions with the organization’s workers.

Moreover, first-hand experience provides any customer with empirical evidence of how they may receive service.

How to Improve Brand Reputation Starting from the Inside

An organization can improve its reputation starting from the inside by focusing on its people, culture, and leadership. Here are some evidence-based strategies from I-O Psychology that organizations can use to improve their reputation:

Foster a positive and supportive work environment

SHRM, SIOP, and other authorities state that a positive and supportive work environment attracts and retains top talent (Mueller-Hanson & Pulakos, 2015). When employees feel valued and respected, they increase their engagement with their work and workplace and exhibit organizational citizenship behaviors (OCBs).

  • Use employee engagement surveys to assess the current state of the work environment.
  • Identify areas for improvement and take action to address them.
  • Recognize and reward employees for their contributions.
  • Create opportunities for employees to learn and grow.

Cultivate a strong company culture.

Culture comprises the artifacts, rituals, behaviors, slogans, and other signs of the values, beliefs, mindset, and norms shared by members of an organization. When employees feel connected to a strong, positive company’s culture, they tend to report higher job satisfaction and to advocate for the organization.

  • Define the company’s values and communicate them to all employees.
  • Create opportunities for employees to connect with each other and with the organization’s mission.
  • Encourage employees to take ownership of their work and to make decisions.
  • Celebrate successes and milestones.

Empower employees to make decisions.

When employees feel empowered to make decisions, they become more engaged in their work and more invested in the organization’s success. This can lead to increased productivity, innovation, and customer satisfaction.

  • Foster a culture of trust and autonomy.
  • Delegate decision-making authority to employees.
  • Provide employees with the training and resources they need to make informed decisions.
  • Give employees feedback on their decisions.
  • Ensure the ability for employees to feel safe to take risks and make mistakes.

Encourage transparency and open communication.

Trust and credibility stem from transparency and open communication. Clandestine discussions foster distrust and anxiety. When employees know the status of the organization, they feel valued and respected.

  • Share information with employees about the organization’s finances, performance, and plans.
  • Create opportunities for employees to ask questions and provide feedback.
  • Listen to employee concerns and address them promptly.
  • Be honest and upfront with employees, even when the news is not good.

Provide ongoing training and development opportunities.

Investing in employee training and development can pay dividends by improving the organization’s overall performance and reputation. When employees have the skills and knowledge they need to succeed, they increase their confidence in themselves to contribute to the organization’s success.

  • Identify the skills and knowledge that employees need to succeed in their roles.
  • Provide employees with training and development opportunities that are relevant to their needs.
  • Create a culture of learning and continuous improvement.
  • Recognize and reward employees for their participation in training and development programs.

By implementing these evidence-based strategies, organizations can create a positive and supportive work environment, cultivate a strong company culture, empower employees to make decisions, encourage transparency and open communication, and provide ongoing training and development opportunities. These factors, in turn, can lead to improved employee engagement, productivity, and innovation, as well as enhanced customer satisfaction and a stronger reputation for the organization.

References

Kircova, I., & Esen, E. (2018). The effect of corporate reputation on consumer behavior and purchase intentions. Management Research and Practice, 10(4), 21–32. https://www.proquest.com/scholarly-journals/effect-corporate-reputation-on-consumer-behaviour/docview/2154502373/se-2

Mueller-Hanson, R.A. & Pulakos, E.D. (2015). Putting the “Performance” Back in Performance Management. Society for Human Resource Management (SHRM) & Society for Industrial and Organizational Psychology (SIOP). https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/SHRM-SIOP%20Performance%20Management.pdf

Saini, G. K., & Jawahar, I. M. (2019). The influence of employer rankings, employment experience, and employee characteristics on employer branding as an employer of choice. [Employer branding] Career Development International, 24(7), 636–657. https://doi.org/10.1108/CDI-11-2018-0290

Join Our Newsletter

Name(Required)
Share This