Managing Internal Stakeholder

Dr. Mamta Hegde

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• Employees contribute to the formation of corporate
reputation through their interactions with other
stakeholders.

• Employees contribute to the formation of corporate

reputation through their interactions with other
stakeholder
• having a good reputation among employees is an
important aspect of a strong reputation

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• Corporate reputation is defined as by Olmedo-
Cifuentes and Martinez-Leon (2011) as the
‘estimate of the global perception that different
stakeholders have about a company, evaluated
through a set of dimensions and attributes that
create value, are linked to the organization and
distinguish it from the rest’.

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• Services dominate modern economies, for example,
they represent 73% of the GDP of Britain and 68%
of the GDP of Spain and reputation management is
relatively important in the services sector.
• Service organizations tend to present themselves to
all stakeholders under a single name and not to
brand individual product lines separately, as is the
norm in many consumer goods companies.

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• If reputation among employees has a significant
role in shaping its market, then an understanding of
how reputation can be influenced should provide a
useful starting point for managers seeking to
improve performance.

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Corporate Reputation and Performance

• Strong positive correlations between Fortune

rankings and financial performance were
traditionally argued as proof of the link.
• Employees can also influence the opinions of
members of their private social network leading to
a strong enhancement of corporate reputation by
adopting certain attitudes and behaviors in order to
become a corporate ambassadors safeguarding
corporate reputation and spreading goodwill in
support of the firm.

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• Which are the Dimensions of Reputation ?

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 Financial Performance
• This dimension considers the economic situation of the
company, its financial structure and its capacity to pay the
debts and liabilities incurred in ordinary activities.
• Any commercial organization performs financially will
influence its reputation; a loss-making company will be less
well regarded than a profitable one, especially by investors
but also by employees.

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 Quality of Management
• This dimension refers to ‘the managers' ability to
develop, direct, and control its resources to support the
discharge of its policy and program responsibilities’

• Most cognitive measures of reputation include an

assessment of the quality of a company’s management

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Human Resources
• Although the label of human resources is not
widely used in measures of reputation, most reflect
the importance of employees in one way or
another. Companies should seek to meet the
expectations of their employees, especially in labor-
intensive service firms.

Business Strategy
• Allied to quality of management, an appraisal of
business strategy is frequently included in
reputation measures.

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 Employee Stakeholders:
The Workforce In The 21st Century
• The following values were identified as motivators for
professionals:
• Competitive pay
• Benefits and opportunities
• A fair deal
• Being valued
• Decent relationships

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“Workforce 2000” related values considered most
important include:

• Recognition
• Respect and dignity
• Personal choice
• Involvement at work
• Pride in work
• Quality of lifestyle
• Financial security
• Self-development
• Health and wellness
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 The Changing Social Contract Between
Corporations and Employees

• The social contract that has historically defined the

employee/employer relationship is known as the
employment-at-will (EAW) doctrine.

• There is largely no concept of at-will employment in

India and employment may only be terminated for
reasonable cause, except for persons in management
positions in certain states. Procedures for termination of
employment vary based on the reason why an employee
is terminated and the category of the employee.

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• The EAW remains the cornerstone of U.S. labor
law.
• At issue is the continuing debate over the nature of
property and property rights.

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 Employee And Employer Rights And
Responsibilities
• The ideal relationship between employer and employees is one
based on mutual respect and trust.
• A right can be understood as a “moral claim.”
• The moral foundation for employee rights is since employees
are persons.
• The evolving social contract between employers and
employees still recognizes employers’ power over physical and
material property, but the contractual relationship aims in
principle at balance, mutual respect, integrity, and fairness.

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Employee And Employer Rights And
Responsibilities
• Employers are obliged to:
• Pay employees fair wages for work performed
• To provide safe working conditions
• Employees are responsible for:
• Fulfilling their contractual obligations to the corporation
• For following the goals, procedural rules, and work plans
• For performing productively
• Timeliness
• Avoiding absenteeism
• Acting legally and morally
• Respecting the intellectual and property rights of the employer

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 Employee And Employer Rights And
Responsibilities
Major types of employee rights in the workplace
include:
• Right not to be terminated without just cause
• Right to due process
• Right to privacy
• Right to workplace health and safety
• Right to organize and strike
• Rights regarding plant closings

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 Employee And Employer Rights And
Responsibilities
• Employees’ right to privacy remains one of the
most debated and controversial rights. Areas
centered around issues of privacy include:
• Technology use
• Polygraph and psychological testing
• Workplace surveillance
• Internet use
• Drug testing
• Genetic discrimination

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 Discrimination, Equal Employment
Opportunity, And Affirmative Action
• Recently, discrimination has surfaced in several categories
including:
• Racial profiling
• Income disparities
• Ratio of female compensation compared to male
• Examples of discriminatory practices have been found in:
• Recruitment
• Screening
• Promotion
• Termination
• Conditions of employment
• Discharge

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 Sexual Harassment In The Workplace
• Sexual harassment remains among the most
prominent civil right issues in the workplace.
• Forms of sexual harassment include:
• Unwelcome sexual advances
• Coercion
• Favoritism
• Indirect harassment
• Physical conduct
• Visual harassment

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 Whistle-Blowing V/s
Organizational Loyaltyq
• De George has identified five conditions when whistle-blowing is morally
justified:
• When the product or policy of the firm will serious and considerable harm to
the stakeholders
• When an employee identifies a serious threat of harm stating his/ her moral
concern
• When the immediate supervisor does not act, it should be reported to the
higher authority
• Employee must have adequate documented evidence
• Employee must have valid reasons to believe that such reporting and
resultant action would ensure policy change beneficial to all and is worth
taking the risk as a whistle-blower

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 Whistle blowing contd…..

• Four managerial steps to prevent external whistle-blowing

have been suggested:
• Develop effective internal grievance procedures and processes
that employees can use to report wrongdoings
• Reward people for using these channels
• Appoint senior executives to address such concerns
• Assess large fines or illegal actions ; include all wrong doers who
knowingly play on / break the rules

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