Evaluating the effects of corporate reputation on employee engagement

Abstract

This study explores the previously less researched impact of corporate reputation on employees, more specifically on employee engagement. Employee engagement and corporate reputation are concepts that have been receiving attention in both business and academia alike, especially in view of the economic turmoil of the past decade as both constructs have been shown to affect profits. The study was designed in a way to measure the impact of employees’ perceptions of corporate reputation on their engagement with the corporation, while controlling for the state of their psychological contract with the organisation. An online survey of 509 employees from a large South African bank provided the data to which a Structural Equation Model (SEM) emanating from the theoretical background was fitted. The results of the model unequivocally confirmed that corporate reputation perceptions are an important predictor of employee engagement. It was also found that psychological contract breach influences both perceptions of reputation by employees and employee engagement directly. The implication is that corporate reputation can have a strong influence on tangible results through employee engagement.