Employer attractiveness: a conceptual framework & scale development.

Pattnaik, Salila Kumar ; Misra, Rajnish Kumar

Introduction

The term 'War for talent' was brought by McKinsey consultants (Chambers et al, 1998). Organizational attractiveness with reference to recruitment has been explored in related areas of research in human resources and has been linked to marketing literature (Daniel & Neves, 2011). Ambler and Barrow (1996) have shown the importance of recruitment outcomes of the image of the organization as an employer. Recruitment has received extensive attention from academics in these years (e.g. Cable & Turban, 2001; Kickul, 2001). Organizations should come up with their innovative recruitment strategies to win the war for talent by becoming an employer of choice within the talent pool (Berthon et al., 2005; Armstrong, 2006) to sustain their business and achieve competitive advantages. Employee's perception of employer attractiveness is key to organizational success in attracting and retaining talents (Williams & Bauer, 1994; Albinger & Freeman, 2000; Berthon et al, 2005). Organizational attractiveness refers to the degree to which a person favorably perceives an organization as a place to work (Rynes et al., 1991), and the intention of referring their organization to the external talent pool. While much focus in academia as well as in practice has been devoted to understand what leads to employer attractiveness (Berthon et al., 2005; Backhaus& Tikoo, 2004), substantial focus has not yet been given to measure the level of employer attractiveness through the identification of attributes that employees look for in their employer.

Employer Attractiveness

Psychological research is focusing on what makes individuals attracted, or what makes an employer attractive in terms of specific (personal) characteristics (Highhouse et al., 2003; Rentsch & McEwen, 2002; Hoye & Lievens, 2007). Recruitment literature relates this term to the decision of a job applicant to apply for a job (Allen et al, 2007; Hoye & Lievens, 2007). Despite the differences in focus, most research measures the level of attractiveness at the individual level (Judge & Cable, 1997; Turban & Greening, 1996). Perceptions of organizational attractiveness refers to the level to which a person positively perceives an organization as a great place to work (Rynes et al., 1991), or the broad professed desirability of working for an organization (Aiman-Smith et al., 2001).

Berthon et al (2005) suggested that the concept of 'employer attractiveness' leads to employer branding. In their study on dimensions of attractiveness in employer branding the authors identified five dimensions or in other words a set of value proposition that lead to employer attractiveness. This certainly helps to understand the attributes of employer attractiveness but does not say whether with these proposed attributes employees will stay attached to the organization.

Sokro (2012) studied the influence of employer branding on employee attraction and suggested that employers need to create conducive work environment with conditions to enable employees feel comfortable and remain in the organisation. The study was limited only to identify the attributes of employer attractiveness. Post implementation of these attributes and its effect on the retention matrix is un-determined.

Devendorf and Highhouse (2008) studied workplace attraction, and the contribution of existing employees on attracting the potential employee to the prospective pool. The study highlighted that job seekers look for three types of important information from potential employers i.e. people information, employer information, and job information. Out of the three, people information is particularly significant as job seekers are likely to be interested in the attributes of their potential co-workers. Authors argued that the attributes of current employees can significantly predict the organization's employer attractiveness.

Kanar et al (2010) studied on how the positive word-of- mouth of existing employees about their current organization effects in attracting potential employees towards the organization. The study revealed that negative information is having a larger impact than positive information on job seekers' organizational attraction. The result had shown that job seekers who were exposed to negative information were much less attracted to the organization compared to participants who were exposed to positive information.

Sullivan (2004) argues that organization should do periodic survey to understand that public recognizes the organization as a great-place-to-work. Organization should focus that the existing employees are satisfied with the current people practices and "proactively" telling positive stories. A satisfied employee will prefer to getting talked about his organization and thus the employers must measure this. The organization should always focus to become a benchmark firm, increasing employees and potential employees' awareness of the best people practices and finally should assess the branding metrics.

Organizational attractiveness has received considerable attention in research. Although, it is a widely used term in empirical research; no common definition is available (Bondarouk et al 2012). For example in marketing research, organizational attractiveness is mostly referred to branding (Backhaus & Tikoo, 2004; Cable & Turban, 2001; Mosley, 2007).

Past researchers were of the view that attractiveness can be influenced through symbolic and instrumental attributes, job and organizational attributes or characteristics or specific attitude towards the company (Aaker, 1997; Cable & Turban, 2003; Highhouse et al., 2003; Lievens et al., 2005; Turban & Keon, 1993; Turban & Greening, 1996; Turban et al, 1998; Turban 2001). However, since there are so many different areas in which attractiveness is measured, the focus of the study plays an important role. Employer Attractiveness in this study is operationally defined as an inductive character that propels the existing employees to gratitude their employer to the external world through word-of-mouth. Measuring this word of mouth is the level of employer attractiveness from the existing employees' point of view.

Research Design & Methodology

Examination of past scales on employer attractiveness shows no consensus regarding measuring employer attractiveness from the employees' psychological view point. Therefore, the present study used both inductive and deductive approaches to propose a scale for measuring employer attractiveness. Based on the focused group discussion and subsequent review of literature the researchers developed a pool of scale items. Further, each question of the questionnaire was evaluated for the comprehensiveness, knowledge and ability, willingness of a typical respondent to answer the questions. The draft questionnaire was shared with a small group of HR professionals of Indian IT companies for face and content validity. The comments received from these experts were carefully evaluated and appropriately incorporated in the questionnaire with due focus that the objective of the questions and study does not deviate.

The study was intended to develop an instrument to measure the employer attractiveness from the current employees of the organization. Therefore 5 statements with 5 responses (5 = strongly agree, 1 = strongly disagree) with respect to employer gratitude towards their organizations was considered to be fit to measure the level of employer attractiveness (Table 1). Slavec & Drnovsek's (2012) ten step methodological approach was followed for employer attractiveness scale development. These ten steps are subsequently categorized into three phases. The first phase regards the theoretical importance and existence of the construct, the second phase deals with the representativeness and appropriateness of data collection, and the third phase regards the statistical analysis and statistical evidence of the construct.

A questionnaire was designed incorporating the objectives of the study and was sent to 700 employees of Indian IT companies. 397 valid responses were received with a response rate of 56.71 percent. The primary data for the study has been collected from the ultimate sampled units. Basic information in respect of the IT companies has been obtained through secondary data (NASSCOM). Due to the confidentiality of the organization and respondents, the identities of these organizations are not disclosed in the current paper.

Statistical Analysis

Descriptive statistical analysis was performed to give a feel of the demographics information and subsequently the normality was tested and reported. A skewness and kurtosis value of 1 is considered very good for most psychometric uses, but by statistical convention a value of 2 is usually acceptable as normally distributed (Lewis-Beck et al., 2004). In the current research, skewness and kurtosis value for all the items fall under a value of 2 and thus the data is considered as normally distributed. Before moving to the scale validation and scale standardization, 397 respondents were split into two sub samples; Sample 1 (n = 200) used for testing the scale purification and homogeneity test followed by exploratory factor analysis to assess scale validation.

Exploratory factor analysis was carried out through SPSS version 16 to purify and reduce the data into meaningful form with principal component analysis along with orthogonal rotation procedure of Varimax for summarizing the original information with minimum factors and optimal coverage. As the study was explorative in nature the statements with Eigen values less than 1.0 were ignored for the subsequent analysis (Bagozzi & Phillips, 1991). Exploratory factor analysis was done on the employer attractiveness variables and the results of communalities table, KMO Value, Bartlett's Test of Sphericity, factor loading were checked.

Sample 2 (n = 197) was used for the confirmatory factor analysis to assess scale standardization. According to Hoyle (1995) CFA was used to test the relations among observed and latent variables. Fit statistics was evaluated to check whether the proposed employer attractiveness model is a fit to the data or not, or whether any modification is required to increase fit. Further, psychometric properties of employer attractiveness scale were also assessed.

Demographic Information

A sample of 397 respondents currently working in IT industry were identified for this study with the following demographic information: with Team Member, 44.3 %, Team Leader/ Project Leader 19.2%, Project Manager/ Account Manager/Delivery Manager 29.5%, Senior Management, 7%. Gender wise 64.71% were males and the rest were females. Experience wise, 43.8 % respondents have less than 6 years of work experience and rest more than 6 years of work experience. 46.6 percent of the respondents were below 30 years of age. Education wise 59.9% of respondents holds a BE/B. Tech or equivalent degree, 31% holds a ME/ M. Tech/MCA master degree , 7.8% holds an MBA or equivalent degree while the rest 1.3% holds other qualifications such as BSc, MSc, Diploma etc.

Purification & Homogeneity Test

Corrected item--total correlation for all the 5 items of employer attractiveness scale appeared greater than 0.60 and hence, none of the items was deleted during the scale purification (Table 1).

Exploratory Factor Analysis

Exploratory factor analysis was done on the employer attractiveness variables. KMO for sampling adequacy was 0.831. On Bartlett's Test of Sphericity whether the correlations between the questions are sufficiently large for factor analysis to be appropriate it is found to be significant, [c.sup.2](10) = 406.563, p < 0.001, indicating that the correlations within the R-matrix are sufficiently different from zero to warrant factor analysis. Percentage of variance appeared 62.782 percent. The factor analysis confirmed that all the items Q1 till Q5 are loaded into a single factor as expected (Tables 2 & 3).

Confirmatory Factor Analysis

Principal components analysis on employer attractiveness scale items confirmed that the scale is one-dimensional with 5 items and thus the next step was to confirm the EA model on sample 2 (N=197) using confirmatory factor analysis (CFA). CFA is used to verify the model fit by analysing a subset or sample of fit indices from major categories of fit indices (Holmes-Smith, 2004). Taking sample sensitivity and model complexity effect into account, Chi-square/df (CMIN/DF), comparative fit index (CFI), initial fit index (IFI), GFI, adjusted goodness of fit index (AGFI) and RMSEA are considered in this study for evaluating fit indices because these have been commonly used and reported in the literature (Hair et al., 1995). As represented in Fig. 1 all the 5 items Q1, Q2, Q3, Q4, Q5 (I tell others great things about working in this company, I would not hesitate to recommend this company to a friend seeking employment, I feel proud to say outside that I am working for this company, I rarely think about leaving this company to work somewhere else, My company keeps the promises that this is a great place to) are loadings statistically significant to predict the latent variable employer attractiveness (0.70 - Q1, 0.60 - Q2, 0.64 - Q3, 0.79 - Q4, 0.59 - Q5, p < 0.001 ). The /2 associated with the EA scale was 4.685 (df = 4, p < 0.01), and /2/df is < 3.0, probability = 0.321 suggest that the model excellently fits the data (Table 4). That the employer attractiveness yields a RMSEA value of 0.030 means that only about 3% of the variance and covariance are left unexplained, making the model highly acceptable. Further the fit indices CFI= 0.998, GFI= 0.990, AGFI= .0964, IFI= 0.998 highly satisfy the requirement for model fit. In summary, that the values of all parameters' estimates are all positive and significant suggests that the model fits the data well and that it is an acceptable model. In short, CFA confirms the 5 items structure EA instrument (Fig. 1).

[FIGURE 1 OMITTED]

Psychometric Properties

The psychometric property of employer attractiveness scale was assessed. Cronbach Alpha for the five item employer attractiveness one-dimensional scale appeared as 0.850 and proved the reliability of the scale (Table 2). Nomological validity of an instrument is established if items that are expected to load together in a factor analysis and the employer attractiveness scale was loaded into a single factor as expected and proved the nomological validity of the scale. Kaiser-Meyer-Olkin (KMO) measure of sampling adequacy appeared 0.831 and proves the construct validity (Table 3). Face and content validity was judged through internal check and discussion with the experts from academics and industry. Convergent and Discriminant Validity was assessed for the employer attractiveness scale using CFA and the results supported the factor structure of employer attractiveness, and established evidence of convergent and discriminant validity as all the items had significant loadings and the fit of the model was good as mentioned earlier.

Discussion & Conclusion

The objective of the present study was to develop a scale to measure the level of employer attractiveness through the psychological intuition of employees' gratitude towards their employer. The findings of the study show that the level of employer attractiveness can be measured using the five item employer attractiveness scale.

In helping to understand the attributes of employer attractiveness that has significant effect on the employee attraction, retention in the Indian origin software companies, the current study has derived important implications for research and practice. Employer can measure their level of employer attractiveness with the five questions during any period. Similarly from research point of view the complicated process of employer attractiveness with reference to existing employees can be measured using the five questions of employer attractiveness scale.

The samples collected for the present study was small. More accuracy can be attained with large sample size by extending the research to more Indian IT organizations. The applicability of the current research results needs further analysis and consideration. Further research is needed across various domains/sectors such as banking, manufacturing, and retail using the employer attractiveness scale to find its validity and applicability across different domains.

Salila Kumar Pattnaik (e-mail:salilapattnaik @hotmail.com) is Research Scholar in School of Management, KIIT University, Bhubaneswar 751024, and Rajnish Kumar Misra (email:rajnish_misra@yahoo.com) is Associate Professor in Human Resource Management, Jaypee Business School, JIIT University, Noida, 201307.

References

Aaker, J. L. (1997). "Dimensions of Brand Personality". Journal of Marketing Research, 34:347-56.

Adam, M., Kanar, A.M., Collins, C.J. & BellA, B.S. (2010), "Comparison of the Effects of Positive and Negative Information on Job Seekers' Organizational Attraction and Attribute Recall", Human Performance, 23: 93-212.

Albinger, H. & Freeman, S. (2000), "Corporate Social Performance and Attractiveness as an Employer to Different Job Seeking Populations", Journal of Business Ethics, 2: 24353.

Alenka, S. & Mateja, D. (2012), "A Perspective on Scale Development in Entrepreneurship Research", Economic and Business Review, 14(1): 39-62.

Allen, D.G., Mahto, R.V. & Otondo, R.F. (2007), "Web-Based Recruitment: Effects of Information, Organizational Brand, and Attitudes toward a Web Site on Applicant Attraction", Journal of Applied Psychology, 92(6): 1696-1708.

Amber, T. & Barrow, S. (1996), "The Employer Brand", Journal of Brand Management, 4: 185-206.

Armstrong, M. (2006), A Handbook of Human Resource Management Practice, 10th Edition, Kogan Page Ltd, London

Backhaus, K. & Tikoo, S. (2004), "Conceptualizing and Researching Employer Branding", Career Development International, 9(5): 501-17.

Bagozzi, R. P., Yi, Y. & Phillips, L. W. (1991). "Assessing Construct Validity in Organizational Research", Administrative Science Quarterly, 36: 421-58.

Berthon, P., Ewing, M., & Hah, L. L. (2005). "Captivating Company: Dimensions of Attractiveness in Employer Branding", International Journal of Advertising, 24 (2).

Bondarouk, T., Ruel, H. & Weekhout, W. (2012). "Employer Branding and its Effect on Organizational Attractiveness via the World Wide Web: Results of Quantitative and Qualitative Studies Combined"; Paper presented at the 4th International e-HRM Conference "Innovation, Creativity and e-HRM" 28-29 March 2012, Nottingham Trent University, UK.

Cable, D. & Turban, D. (2001), "Establishing the Dimensions, Sources and Value of Job Seekers Employer Knowledge during Recruitment", in Ferris, G.R. (Ed.), Research in Personnel and Human Resources Management, Elsevier Science, New York, NY, 11563.

Cable, D.M., & Turban, T.B. (2003), "The Value of Organizational Reputation in the Recruitment Context: A Brand-Equity Perspective", Journal of Applied Social Psychology, 33(11): 2244-66.

Chambers, E.G., Foulon, M., Handfield-Jones, H., Hankin, S.M. & Michaels, E.G. (1998) "The War for Talent", McKinsey Quarterly, 3:44-57.

Devendorf, S.A. & Highhouse, S. (2008), "Applicant-Employee Similarity and Attraction to an Employer", Journal of Occupational and Organizational Psychology, 81(4): 607-17.

Gomes, D. & Neves, J. (2011),"Organizational Attractiveness and Prospective Applicants' Intentions to Apply", Personnel Review 40(6):684-99.

Hair, J.F., Anderson, R.E., Tatham, R.L. & Black, W.C. (1995), Multivariate Data Analysis (4th Edn), Upper Saddle River, NY: Prentice-Hall International.

Highhouse, S., Lievens, F. & Sinar, E. (2003), Measuring Attraction to Organizations, Educational and Psychological Measurement, 63: 986-1001

Holmes-Smith, P., Coote, L. & Cunningham, E. (2004), Structural Equation Modelling: From the Fundamentals to Advanced Topics. ACSPRI-Summer Training Program, Canberra, Australia

Hoyle, R. H. (1995), "The Structural Equation Modelling Approach: Basic Concepts and Fundamental Issues", in R. H. Hoyle (Ed.) Structural Equation Modelling: Concepts, Issues, and Applications, Thousand Oaks, CA: Sage Publications, Inc.

Judge, T.A. & Cable, D.M. (1997), "Applicant Personality, Organizational Culture, and Organizational Attraction", Personnel Psychology, 50:359-94.

Kickul, J. (2001), "Promises Made, Promises Broken: an Exploration of Small Business Attraction and Retention Practices", Jour nal of Small Business Management, 39: 320-35.

Lewis-Beck, M., Bryman, A. & Liao, T. (2004), Encyclopaedia of Social Science Research Methods, Thousand Oaks, CA: SAGE Publications, Inc.

Lievens, F., Van Hoye, G. & Schreurs, B. (2005), "Examining the Relationship between Employer Knowledge Dimensions and Organizational Attractiveness: an Application in a Military Context", Journal of Occupational and Organizational Psychology, 78: 553-72.

Mosley, R.W. (2007), "Customer Experience, Organisational Culture and the Employer Brand", Journal of Brand Management, 15(2): 123-34.

Rentsch, N.R. & McEwen, A.H. (2002), "Comparing Personality Characteristics, Values, and Goals as Antecedents of Organizational Attractiveness", International Journal of Selection and Assessment, 10(3): 225-43.

Rynes, S., Bretz, R. & Gerhart, B. (1991), "The Importance of Recruitment in Job Choice: a Different Way of Looking", Personnel Psychology, 44: 487-521.

Smith, A. L., Bauer, T. & Cable, D. (2001), "Are You Attracted? Do You Intend to Pursue? A Recruiting Policy-Capturing Study", Journal of Business and Psychology, 16: 219-37.

Sokro, E. (2012), "Impact of Employer Branding on Employee Attraction and Retention", European Journal of Business and Management, 4(18)

Sullivan, J. (2004). "Eight Elements of a Successful Employment Brand. ER Daily, 23 February, availableat:www.erexchange.com/articles/db/52CB45FDADFAA4CD 2BBC366659E26892A.asp (accessed April 14, 2010).

Turban, D. & Keon, T. (1993), "Organizational Attractiveness: an Interactionist Perspective", Journal of Applied Psychology, 78: 184-93.

Turban, D., Forret, M. & Hendrickson, C. (1998), "Applicant Attraction to Firms: Influences of Organization Reputation and Organizational Attributes, and Recruiter Behaviours". Journal of Vocational Behavior, 52: 24-44.

Turban, D.B. (2001), "Organizational Attractiveness as an Employer on College Campuses: An Examination of the Applicant Population", Journal of Vocational Behavior, 58: 293-312.

Turban, D.B. & Greening, D.W. (1996), "Corporate Social Performance and Organizational Attractiveness to Prospective Employees", Academy of Management Journal, 40(3): 658-72.

Van Hoye, G. & Lievens, F. (2007), "Social Influences on Organizational Attractiveness: Investigating If and When Word of Mouth Matters", Journal of Applied Social Psychology, 37(9): 2024-47.

Williams, M. & Bauer, T. (1994), "The Effect of Managing Diversity Policy on Organizational Attractiveness", Group & Organizational Management, 19: 295-308.

Table 1 Item-Total Correlation

Item                                  Item Mean   Item-Total
                                                  Correlation

Q1   Given the opportunity, I tell      3.8550          .657
       others great things about
       working here.
Q2   I would not hesitate to            3.9600          .688
       recommend this company to a
       friend seeking employment.
Q3   I feel proud to say outside        3.9700          .651
       that I am working for this
       company.
Q4   I rarely think about leaving       3.8700          .712
       this company to work
       somewhere else.
Q5   My company keeps the promises      3.6350          .603
       that this is a great place
       to work.

Table 2 Factor Loadings, Variance Explained &Reliability Estimate

Items                                 Factor    Percentage    Cronbach
                                      Loading   of Variance     Alpha
                                       Score

Q4   I rarely think about leaving      0.829        62.782      0.850
       this company to work
       somewhere else.
Q2   I would not hesitate to           0.815
       recommend this company to
       a friend seeking employment
Q1   Given the opportunity, I tell     0.787
       others great things about
       working here
Q3   I feel proud to say outside       0.786
       that I am working for this
       Company.
Q5   My company keeps the promises     0.742
       that this is a great place
       to work

Table 3 KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.         .831

Bartlett's Test of Sphericity    Approx. Chi-Square   406.563
                                 Df                        10
                                 Sig.                    .000

Table 4 Confirmatory Factor Analysis Indices

CFA              Chi-square    CMIN/DF    RMSEA

Employer         4.865 Df=4;      <3.0    0.030
Attractiveness      P=<0.01    P=<0.321

CFA               CFI     GFI    AGFI     IFI

Employer         0.998   0.990   0.964   0.998
Attractiveness