2.1 Employee perception of CSR

As Du Preez and Bendixen (2015) note, a consumer’s initial exposure to a company’s brand typically comes from the employees who stand on the front lines of the company’s workplace. These employees represent the face of the business and thus embody the business’s brand. They are the brand’s diplomats in a sense, and if the consumer is put off by the employees, the brand suffers. In order for employees to represent their organization’s brand with confidence and enthusiasm, they must be able to believe in the brand, embrace the organization’s CSR policies, and promote the spirit of these policies in their engagement with consumers on the front lines. The employees represent the values of the company and feel (if they are happily employed) that the company represents their own values as well.

Thus the employee is attracted to the business for the same reasons as the consumer: the company’s brand has appeal to workers just like it does to consumers based on the organization’s values, policies and image (de Chernatony, Cottam & Segal-Horn, 2006; Brexendorf & Kernstock, 2007). Likewise, Stawiski, Deal and Gentry (2010) show that “CSR improves employees’ perceptions of the company” (p. 2) mainly because workers tend to tie their own identities to the identity of that which is associated with them: if a company enjoys a positive CSR reputation, the employee feels more confident and proud that his or her reputation is boosted by way of association with the company. In this sense, it can be hypothesized that positive employee perception of an organization’s CSR can lead to the organization having attractiveness for potential employees.

2.2 Attractiveness to potential employees

Potential employees are attracted to businesses that offer both positive corporate social responsibility (CSR) policies as these are often reflective of community concerns and an awareness on the part of the firm of what is important to the community (Luo & Bhattacharya, 2006). A firm that shows its interest in the community’s interests and needs is one that is more likely to be respected by potential employees. Most employees tend to seek incentives and want to be employed somewhere where they feel that their organization is supportive and has their interests at heart (Lazaroiu, 2015). A firm that does pay attention to a community’s interests is more than likely going to be a firm that is not interested either in the needs and interests of its employees, just like bad and ineffective managers are detached from and indifferent to their followers and workers (Schyns & Schilling, 2013). Moreover, organizational leaders know that by practicing CSR, they are really helping themselves through the establishment of a ground work of positive human capital (Petrenko, Aime, Ridge, & Hill, 2016).

As CSR programs can be viewed as effective forms of management that both directly and indirectly have an effect on the “social, environmental and economic environment in which” the organization operates, potential employees can be viewed as being impacted by CSR in the sense that they are on the receiving end of these CSR programs as members or stakeholders in the community (Castka, Bamber, Sharp, 2005, p. vii). CSR thus serves to attract both consumers and potential employees because of the reciprocal nature of relationships (Schyns... A company that is capable of attracting talent is going to be a company that has a strong standing both in the markets and in the communities in which it is based. Stakeholders in the company are likely to feel good about their connections to the company just as shareholders are likely to feel confident about their investments in the company. Organizations that promote positive CSR policies that are embraced by consumers are likely to be just as equally embraced by workers, as all will feel as though they are part of the same “spirit of mission” that runs like a thread through each of these variables (Samaan & Verneuil, 2009).
H1 thus refers to the employee’s perception of CSR as a valuable informational input in communicating to other potential employees the attractiveness of the firm. Employees are on the frontlines not just in terms of how they interact with consumers but also in terms of how they represent their company to other potential employees. Through the use of social media and the spread of information in personal communications, employees will represent the company to potential employees based on how they perceive their firm’s CSR policies, whether or not they approve of those policies and whether or not they find those policies to be reflective of their own personal values and beliefs (Lemmink, Schuijf & Streukens, 2003).

2.4 Employer brand equity

Employer brand equity is an asset that allows an organization to attract potential employees. Brand equity can be achieved in a number of ways but often it is developed through the offering of incentives or rewards that employees find to be appealing (Neckerman & Frey, 2013). CSR as employer brand equity follows in line with what Miles and Friedman (2002) describe as a plan to establish a “better world” through socially-proactive positioning on the part of the organization (p. 1). Ethical approaches typically play a role in the construction of the CSR program, as ethical systems and frameworks serve as the backbone for the corporate policy stance (Pearce & Doh, 2005; AnyangoOoko, 2014). Companies that lack an ethical backbone are eventually revealed as such—once prominent case in the 21st century being that of Enron, whose leaders made questionable ethical decisions in leading the company, and whose appeal to employees quickly evaporated once it became apparent that the company was no longer trustworthy (Tiwari, 2010).

Employer brand equity feeds into the attractiveness of an organization to a potential employee and Burmann, Schaefer and Maloney (2008) show that “corporate brand image is indeed determined by the industry image, and that this determination is moderated by involvement and knowledge about the specific corporation” (p. 157). The flow of information is thus processed differently in this transaction, with information coming to potential employees by way of the employer brand equity instead of by way of the employee perception of CSR. While each flows can contribute to the…