An Evaluation of the Effects of Corporate Reputation on Employee Engagement: The Case of a Major Bank in South Africa

Abstract

Employee engagement and corporate reputation are both scarce organizational resources that have been shown to influence competitive performance and profitability. This study explores the impact of employee perceptions of corporate reputation on employee engagement. The study was designed 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 organization. Following the development of a theoretical model, data gathered via a survey of 509 employees of a large South African Bank was analyzed using Structural Equation Modelling. The results of the model confirmed that corporate reputation perceptions are an important predictor of employee engagement. It was also found that psychological contract breach is negatively related to employee perceptions of reputation and to their engagement. The results of the study demonstrate the importance of managing employee perceptions of corporate reputation both directly and indirectly through the management of the psychological contract.