Tell me your socially responsible practices, I will tell you how attractive for recruitment you are! The impact of perceived CSR on organizational attractiveness

Abstract

This experimental study seeks to extend the current knowledge about the impact of corporate social responsibility on organizational attractiveness by analyzing the mediating role of corporate image. To the best of our knowledge, no study has empirically tested this. Participants (n = 195) randomly received an individual survey containing a description of a company as fulfilling (high engagement condition) or not fulfilling (low engagement condition) a set of socially responsible practices, followed by questions about the study variables. Structural equation modeling analyses revealed that the proposed model has a strong fit to the data, evidencing that the perceived level of engagement in socially responsible practices contributes to triggering the process that leads individuals to evaluate an organization as a good place to work. Corporate social responsibility can thus be a source of competitive advantage regarding the recruitment of new employees. Accordingly, information related to corporate social performance should be considered by recruiters.

1

Introduction

Human resources are the most distinctive and valuable asset of any organization (Cappeli & Crocker-Hefter, 1996) as they provide companies the necessary knowledge, skills and competences to successfully pursue organizational goals. Following this line of reasoning, several researchers have classified human resources as a valuable capital of any organization, and thus called them human capital (e.g. Cascio & Bondreau, 2011; Hatch & Dyer, 2004). One of the current key issues in human resource management is effectiveness in the way how an organization is able to attract qualified and adjusted profiles of newcomers. As such, the pressure for effectiveness in attracting new employees is substantially high, as this is a critical matter for organizational competitiveness. This is why several practitioners usually state that “applicant attraction to organizations is business”. Recruitment involves a sequence of stages whose primary purposes are to identify and to attract applicants with a profile adjusted to the organizations’ requirements (Barber, 1998). Given its relevance to organizational success, applicant attraction issues have gained renewed importance since the beginning of this century, pressuring practitioners to be able to cope with the employment markets with high effectiveness levels, as well as researchers to investigate about ways to enhance organizational attraction efficiency. As such, several researchers and practitioners commonly refer to the employment market as a place where organizations can struggle between themselves for the most interesting employees, in a way that has lead to use the expression “war for talent” (Bhattacharya, Sen & Korschun, 2008; Michaels, Handfield-Jones, & Axelrod, 2001). The organizational attraction issues have been noticed by researchers since at least three decades, whom have recently regained focus, calling for the relevance of developing new research over the subject (e.g. Gomes & Neves, 2011; Van Hooft, Born, Taris, & Van der Flier, 2006). Consequently, the importance of organizational attraction to recruitment effectiveness has stimulated the development of an interesting and still growing body of research focused on the comprehension of applicant attraction to organizations (Erhart & Ziegert, 2005). One major finding refers to the relevance of organizational attractiveness for attraction effectiveness.

Organizational attractiveness relates to the degree to which a prospective applicant perceives an organization as a good place to work and the positive desirability of developing a work relationship with it (Aiman-Smith, Bauer & Cable, 2001; Rynes, 1991). It relates to the affective evaluation of an organization made by prospective applicants, which is usually considered as an important output of the attraction stage of recruitment as it is related with important applicants’ evaluations of the organization and also with applicants’ behaviors. Over the years, several researchers have certified for the relevance of attractiveness, elaborating that attractiveness is positively and significantly associated with the assessment of companies’ image, reputation or employer brand (e.g. Gomes & Neves, 2010; Greening & Turban, 2000; Lievens & Highhouse, 2003; Lievens, Van Hoye & Schreurs, 2005), as well as applicants’ intention to apply to a vacancy or pursuing a job in an organization (e.g. Chapman, Uggerslev, Carrol, Piasentin, & Jones, 2005; Gomes & Neves, 2011; Porter, Cordon & Barber, 2004; Roberson, Collins, & Oreg, 2005).

Variables such as job characteristics and organizational attributes (Gomes & Neves, 2010) or the source, amount and type of information used in recruitment advertising (Reeve, Highhouse & Brooks, 2006) have been established as good predictors of organizational attractiveness. Some studies suggest that corporate social responsibility (CSR) can be also an important predictor of organizational attractiveness. CSR refers to the degree to which organizations embrace social and environmental considerations alongside economic ones in their business operations and relationship with stakeholders (Aguinis, 2011; Duarte, Mouro & Neves, 2010; European Commission, 2001, 2011; Neves & Bento, 2005), and consequently develop principles, policies and practices that appear to further some social good (McWilliams & Siegels, 2001; Wood, 1991). Being a multidimensional construct, CSR comprises the implementation of a broad range of practices, such as reducing environmental impact, investing in people management and development, community support, or ensuring firm economic sustainability (Carroll & Shabana, 2010; Dahlsrud, 2008; Duarte, 2014; Neves & Bento, 2005). Previous studies found that prospective applicants consider CSR important to the overall assessment of companies as future places to work (Backhaus, Stone & Heiner, 2002) and are more attracted to companies that are considered to be more socially responsible than to companies that are perceived as less responsible (Albinger & Freeman, 2000; Alniacik, Alniacik & Genc, 2011; Bauer & Aiman-Smith, 1996; Evans & Davis, 2011; Greening & Turban, 2000; Lin, Tsai, Joe & Chiu, 2012; Lis, 2012; Smith, Wokutch, Harrigton & Dennis, 2004; Turban & Greening, 1997). This does not imply that CSR is the main predictor of prospective applicants’ options. Other organizational or job-related characteristics might be more relevant or critical to job decisions as discussed by Auger, Devinney, Dowling, Eckert and Lin (2013). Nevertheless, existing studies suggest that CSR makes a significant contribution to understanding and predicting a company's ability to attract prospective applicants. Based on this evidence, we propose that:Hypothesis 1

The level of engagement in CSR practices affects organizational attractiveness. The level of organizational attractiveness will be higher when perceived corporate engagement is high.

CSR has also been frequently related to increased corporate image, that is, to people's overall impressions of an organization (Fombrun, 1996; Fombrun & Van Riel, 1997; Lievens, 2006; Kim, Lee, Lee & Kim, 2010; Riordan, Gatewood & Bill, 1997). For instance, Brammer and Millington (2005) found that companies which make higher levels of philanthropic donations have better reputations. The development of a positive image in the eyes of stakeholders has been cited as one of the benefits of corporate investment in CSR (European Commission, 2001; Kotler & Lee, 2005). Corporate image, for its part, has been positively associated to different stakeholders’ decisions about their relationship with an organization (Alsop, 2004), including organizational commitment, job satisfaction and intention to quit (Duarte & Neves, 2012; Lee, Lee & Lum, 2008; Riordan et al., 1997), and organizational attractiveness (Greening & Turban, 2000; Lievens et al., 2005). These findings suggest that corporate image may be a potential mediating mechanism of the relationship between perceived CSR and organizational attractiveness. Consequently, the engagement in CSR practices might promote a more positive corporate image at the eyes of prospective applicants and this, in turn, might lead to a more positive evaluation of the company as a place to work. An interesting clue that can be found in literature and shape the direction we are proposing relates to Social Identity Theory, which proposes that people strive for a positive self-esteem, and this is affected by their organizational membership (Ashforth & Mael, 1989; Dutton, Dukerich & Harquail, 1994; Glavas & Godwin, 2013). Therefore, individuals are likely to be proud to identify themselves with a company that has a positive identity (Ashforth & Mael, 1989; Dutton et al., 1994), since the association with such a company will help to derive a positive self-concept. In the case of prospective applicants, organizations with higher CSR might be considered a more attractive place to work because they manage to anticipate enhanced self-concepts through the association with an organization that does good things for its members or for community and society at large and has a positive image (Albinger & Freeman, 2000; Backhaus et al., 2002; Greening & Turban, 2000; Turban & Greening, 1997). Despite previous literature suggestions on this regard, to the best of our knowledge no study has empirically investigated the potential mediating role of corporate image in the relationship between CSR and organizational attractiveness. Against this backdrop, the present study aims to investigate this matter. Based on previous literature, we propose that:Hypothesis 2

Corporate image mediates the effect of CSR on organizational attractiveness.

A description of the experimental study designed to explore our hypotheses is now provided.

2

Method

2.1

Sample

A non-probabilistic convenience sample of 195 participants, aged between 16 and 67 years (M = 24.6; SD = 10.1), most of them female (66.2%), has participated in this study. The educational level of participants is as follows: 8.8% have completed 9 years of schooling or less, 68.0% have between 10 and 12 years of schooling, and 23.2% have a higher education qualification. Most participants have previous work experience (67.2%) and 14.4% were looking for a new job at the time of the study. A little more than half of the sample were full-time students (53.6%), 42.3% were employed workers and 4.1% were unemployed workers at the time of the study. Participants were invited to voluntarily participate in the study during training courses organized by a trade association previously contact by researchers and also during undergraduate and master classes lectured by research team members. Since all individuals above 16 years can legally enter the job market in Portugal and therefore make decisions regarding job choices this was the only criteria defined for the sample (having 16 years or more). Our main concern was to collect data in controlled context in order to assure randomization. We choose to collect data in professional training sessions and classes for this reason. Regarding sample's characteristics it is important to say that the use of samples of students is common in this field for several reasons. Students are an accessible group (Smith et al., 2004) and are likely to be entering the job market in the near future, being therefore potential prospective employees (e.g. Albinger & Freeman, 2000; Alniacik et al., 2011; Backhaus et al., 2002). As such they are an appropriate research subjects for the topic of organizational attractiveness and other aspects of job search process. Other studies before us have used mixed samples of actual and potential job seekers (e.g. Albinger & Freeman, 2000).

2.2

Procedure and measures

As mentioned above, Participants were asked to voluntarily participate in the study during training courses organized by a trade association previously contact by researchers and also during undergraduate and master classes lectured by research team members. Participants completed an individual survey containing the description of a company and questions about its engagement in CSR practices, corporate image, attractiveness as a place to work and socio-demographic characteristics.

Scenarios were used to manipulate two levels of engagement in CSR practices (high versus low; independent variable). A scenario for each experimental condition depicted a hypothetical company as fulfilling a set of socially responsible practices in high corporate engagement conditions or as fulfilling none of the practices in low engagement conditions (e.g. investing in training and human resource practices that promote equity between men and women; support social, cultural and sports activities; investing in environmental protection programs; obtaining profits). Scenarios were based on Evans and Davis's experimental paradigm (2011), which was adapted and pretested in a previous study by Duarte (2011). To decrease socially desirable responses, the scenarios were written in the third person (Evans & Davis, 2011; Hughes & Huby, 2004).

Participants were randomly assigned to one of the experimental conditions. The instructions informed them that they were participating in a study that was meant to understand the relationship between individuals and organizations. After reading the corresponding scenario, participants were asked to evaluate the extent to which the company was engaged in CSR practices, had a good image and was considered a good place to work.

Perceived engagement in CSR (manipulation check) was measured using three items taken from Duarte (2011; “This company is a socially responsible company”; “This company is concerned with the welfare of society”; “This company manages its employees in a responsible way”; response scale: 1 – strongly disagree to 5 – strongly agree; α = .86). A manipulation check showed that perceived engagement in CSR practices ranged as expected. Contrary to participants in high engagement condition (M = 3.92; SD = .50), participants in low engagement condition considered the company to be less socially responsible (M = 1.92; SD = .60; t = −25.023, p < .000).

Corporate image (mediator variable) was measured using three items based on Riordan and colleagues (1997). A sample item is “This company has a good overall image” (response scale: 1 – strongly disagree to 5 – strongly agree; α = .89).

Organizational attractiveness (dependent variable) was assessed using three items adapted from Bauer and Aiman-Smith (1996) and Highhouse, Lievens, and Sinar (2003). A sample item is “This would be a good company to work for” (response scale: 1 – strongly disagree to 7 – strongly agree; α = .96).

Participants were also asked to indicate a set of socio-demographic characteristics (gender, age, educational level, previous work experience, if they were searching for a job at the time of the study).

3

Results

Data were analyzed using structural equation modeling (SEM) (software: AMOS 20), as it allows modeling structural relationships and yielding overall fit indices, while estimating mediational relationships (Hu & Bentler, 1999). In terms of analytical procedure, we have tested first the goodness-of-fit of the proposed theoretical model and compared it with a single factor model. Second, we analyzed the mediation hypothesis. The level of engagement in CSR entered the analyses as an observed variable and corporate image (CI) and organizational attractiveness (OA) as latent variables.

We have also performed our SEM analyses using the bootstrapping technique (Efron, 1979) by permitting a solid re-sample distribution as it calculates “the statistic of interest in multiple re-samples of the dataset and by sampling n units with replacement from the original sample of n units” (Preacher, Rucker & Hayes, 2007, p. 190). For estimating model fit, we have considered the root mean square error of approximation (RMSEA; Steiger & Lind, 1980), comparative fit index (CFI; Bentler, 1990), Tucker–Lewis index (TLI; Tucker & Lewis, 1973) and χ² values, providing a statistical basis for comparing the relative fit between models. Based on Hu and Bentler (1999) and Marsh, Hau and Wen (2004), we have considered models with CFI, TLI values < .90, and RMSEA values > .10 as deficient. Models with CFI, TLI values > .90 to < .95, and RMSEA values < .08 ranges as acceptable. Models with CFI, TLI values > 0.95 and RMSEA values ≤ .06 ranges as very good.

Table 1 presents the descriptive statistics and the correlations between all indicators used.

Table 1.

Descriptive statistics and correlations.

	M	SD	1	2	3	4	5	6
1. Level of engagement in CSR (low, high)	–	–
2. This company has a good image among its costumers (CI_1)	3.14	1.12	.676^**
3. This company has a good overall image (CI_2)	2.98	1.18	.783^**	.769^**
4. This company has a good reputation in the community (CI_3)	2.90	1.37	.764^**	.650^**	.767^**
5. This is a very attractive company regarding as a place to work (OA_1)	3.47	1.84	.705^**	.601^**	.694^**	.596^**
6. This would be a good company to work for (OA_2)	3.55	1.82	.703^**	.605^**	.708^**	.627^**	.893^**
7. To have a job in this company would be very appealing to me (OA_3)	3.42	1.79	.670^**	.581^**	.647^**	.574^**	.859^**	.893^**

Notes: Corporate social responsibility (CSR) was coded as 1 – low engagement condition, 2 – high engagement condition; corporate image (CI) varies between 1 – strongly disagree to 5 – strongly agree; organizational attractiveness (OA) varies between 1 – strongly disagree to 7 – strongly agree.

**

p < .01.

As there are several strong and moderate correlations between the items used as indicators of the latent variables, we compared the goodness-of-fit of our theoretical model with the goodness-of-fit of a single factor model. In the theoretical model (Fig. 1), we have specified a direct path from CSR engagement to organizational attractiveness and to corporate image. We have also specified a direct path from corporate image to organizational attractiveness.

Figure 1.

Theoretical model.

Analysis of the goodness-of-fit of the proposed model showed very good fit to the data (Table 2; χ² (12) = 17.883, n.s.; RMSEA = .05; CFI = .99; TLI = .99). The alternative single factor model has revealed unacceptable fit indices (χ² (14) = 226.690, p < .000; RMSEA = .280; CFI = .85; TLI = .77).

Table 2.

Fit indices.

	χ^2 (gl)	TLI	CFI	RMSEA
Single factor model	226.690 (14)	.767	.845	.280
Theoretical model	17.883 (12)	.992	.996	.050
No direct path model	22.303 (13)	.993	.989	.061

To evaluate mediational effects, we have compared the fits of the theoretical model with the ones of an alternative model having no direct path to be estimated (Table 2). We verified that the proposed theoretical model is slightly better that the alternative model. This evidence suggests a mediational effect of corporate image in the relation between the engagement in CSR and organizational attractiveness.

To observe the magnitude of the mediational effect (if this mediation is either partial or total), we have followed the procedures commonly recommended for the analysis of mediation using SEM (Alwin & Hauser, 1975; Kenny & Judd, 1984) and analyzed the direct, indirect and total effects. Table 3 presents the standardized total, indirect and direct effects for the mediational hypothesis validation purposes. The direct effect of the level of CSR engagement on organizational attractiveness is significant (.24; p < .05), supporting Hypothesis 1. The total effect of this predictor on organizational attractiveness is also significant (.74; p < .000), as well as the indirect effect through corporate image (mediator) (.50; p < .000). These evidences constitute basis for partial mediation of corporate image in the relation between the level of engagement in CSR and organizational attractiveness, thus supporting Hypothesis 2.

Table 3.

Theoretical model: total, indirect and direct effects.

	Total effect	Indirect effect	Direct effect
Level of engagement in CSR-organizational attractiveness	.736^***	.495^***	.241^*

*

p < .05.

***

p < .000.

4

Discussion and conclusions

This study examined the effect of CSR on individuals’ evaluation of an organization as a good place to work, by considering the mediating role of corporate image. Consistent with previous studies, findings indicate that company's engagement in CSR practices has influenced its attractiveness to the eyes of participants (e.g. Albinger & Freeman, 2000; Backhaus et al., 2002; Greening & Turban, 2000; Turban & Greening, 1997). Participants considered the company as a significantly more attractive place to work when it was presented to them has highly engaged in CSR practices than when it was described as a poor performer in this domain. The level of engagement in CSR practices also affected the image participants formed of the company, with high engagement in CSR practices producing more positive perceptions of corporate image than the opposed level of engagement. This is a very interesting result, since a company's image is a fundamental intangible resource and as such can be a major factor in gaining a competitive advantage in the market (Branco & Rodrigues, 2006).

More, findings empirically show that the effect of the level of engagement in CSR practices on organizational attractiveness is partially mediated by the image individuals hold of the company. Results show that company's engagement in socially responsible practices enhances the image individuals hold of the company, and subsequently, this image influences their opinion about the attractiveness of the company as a good future place to work. These results mean that the perceived level of engagement in CSR practices activates the process that leads individuals to evaluate an organization as a good place to work. Accordingly, to attract job seekers, information related to CSR should be considered by recruiters.

This study has some theoretical and practical implications. At a theoretical level, it extends previous research over the relationship between CSR and organizational attractiveness issue, by identifying corporate image as a relevant mediator variable that helps to explain, at least in part, how CSR impacts organizational attractiveness. Kim and Park (2011) recently found that person–organization fit perceptions also help to explain the relationship between CSR and organizational attractiveness but much of the psychological process that lies beneath this relationship continues to be essentially a “black box”. This study helps to shed some light about this matter and thus contributes to both CSR literature and that of recruiting.

At a practical level, findings reinforce the importance of corporate social performance for recruitment matters (Bhattacharya et al., 2008) since they show that companies can make use of their social performance to raise their ability to attract prospective applicants. From the perspective of this stakeholder “high CSR” seems to be a “good business”, as it fosters positive responses toward the company. Communicating their engagement in CSR, alongside with providing other specific information about job and organizational attributes (Auger et al., 2013; Bhattacharya et al., 2008), can help maximize the applicant pool and the recruitment efficacy. Having this mindset in consideration, it is advisable that practitioners enhance the organizations’ social performance in recruitment advertisements, as this seems to be a valid way of maximizing the organization's capabilities of attracting applicants. As such, the organizational communication strategy may very well be more organizational-rooted, valuing organizational policies and its corporate social performance, when compared to job-related information, such as tasks or job demands. An additional and relevant consideration is that corporate social performance seems to be particularly relevant in the case of job seeking populations with high levels of job choice (Albinger & Freeman, 2000). Therefore, companies’ social performance seems to be a relevant, additional tool for winning the “war for talent” (Bhattacharya et al., 2008; Michaels et al., 2001). As for this issue in particular, the “war for talent trends” are likely to persist in the following years, as current social and entrepreneur models of development value innovation and organizational learning and embrace change as a key characteristic of organizational behavior. As such, valid human resources are absolutely relevant to build competitive organizations, and thus, applicant attraction will persist on being relevant and critical for organizational success.

As with any research, the finding of this study must be interpreted in the light of the study's limitations. First, data were obtained in a laboratory setting based on a hypothetical situation. The concerns regarding this method are well known, but a review of organizational behavior and HRM research comparing the direction of the effects in laboratory versus field studies revealed that basically the same results were obtained in the field as in the laboratory (Locke, 1986). Second, the use of convenience samples, although common in this research field (e.g. Albinger & Freeman, 2000; Backhaus et al., 2002; Smith et al., 2004), impairs the generalization of results to the population. So, nevertheless the efforts made in this study in order to create a realistic experimental situation (Hughes & Huby, 2004), the generalization of results to actual job search settings must be made with caution. To overcome this limitation, future research can use probabilistic samples of individuals engaged in real job search (e.g. unemployed workers, students in the last year of graduation looking for a job) to test the strength of the results here obtained. Third, the study focused on the distinctive impact of only two levels of engagement in CSR practices (low versus high). The major limitation of this approach is that real life is not always so black and white (Duarte, 2011). Therefore, future research could explore the impact of less extreme levels of engagement in CSR practices (Duarte, 2011), as well as the impact of consistent and inconsistent levels of engagement in different CSR dimensions (Evans & Davis, 2011). This would contribute to clarify the CSR dimensions more valued by individuals in job searching processes.

Besides overcoming the limitations of the current study and assess the solidness of the findings reported, future studies can also consider certain individual characteristics that may moderate the impact of CSR on organizational attractiveness (e.g. degree of urgency in getting a new job; level of job choice). The present study focused on the psychological process that explains the relationship between CSR and organizational attractiveness. As explained above, the investigation of other psychosocial mediators can be a fruitful avenue for future research, as little information exists about this matter. A last, but not less interesting suggestion, is the investment in the analysis of the relative importance of CSR compared to other organizational and job attributes. Such analysis can help to determine the incremental value of CSR for recruiting objectives over and beyond other more usual human resource management practices (Auger et al., 2013; Bhattacharya et al., 2008).

In short, CSR can be a source of competitive advantage in the recruitment of new employees. By acknowledging the broader impact of CSR policies and practices, companies can strategically use these practices to gain the “war for talent”. This is particularly important in nowadays competitive and dynamic global market.