The mediating effect of organizational trust on the relationship between organizational reputation and turnover intentions

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The Mediating Effect of Organizational Trust on the

Relationship between Organizational Reputation and

Turnover Intentions

Name: Naomi Snoeij Student number: 10789758

MSc. Business Administration, Strategy Track

University of Amsterdam, Faculty of Economics and Business Supervisor: Hesam Fasaei

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Statement of Originality

This document is written by Student Naomi Snoeij who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

The purpose of this study is to explore the relationship between organizational reputation and employees’ turnover intentions. Specifically, this study will examine the role of

organizational trust on the relationship between organizational reputation and employees’ turnover intentions. A total of 108 employees from several organizations located in the Netherlands, participated in this study by filling in an online questionnaire. The results show that organizational trust increases when an organization’s reputation is perceived more favorable. Additionally, higher organizational trust is associated with lower turnover

intentions. Organizational reputation did not have a direct influence on employees’ turnover intentions. Thus, trust fully mediates the relationship between organizational reputation and turnover intentions. These findings suggest that the relationship between organizational reputation and turnover intentions may reside in the influence of organizational reputation on organizational trust. Building a favorable reputation can lead to more trust in an organization, which can reduce employees’ turnover intentions. Hence, managers should focus on

organizational strategies to improve organizational reputation and on trust-building activities, to reduce voluntary turnover.

Keywords

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1. Introduction

“Take care of your reputation. It's your most valuable asset.”

- H. Jackson Brown, Jr. (2007) Organizational reputation is increasingly recognized for its influence on stakeholder support and engagement with organizations (Fombrun, 2012). Employers aspire to be known for their work environment to attract talent, customers, and other important resources that will promote excellence and success (Cable & Turban, 2003; Turban & Cable, 2003). There is empirical evidence that job seekers are more attracted to firms with strong positive reputations than firms with either no or negative reputations (Cable & Turban, 2003). Not only does a favorable reputation make an organization more attractive (Turban & Cable, 2003), it also increases the satisfaction individuals feel and their desire to remain working for the

organization (Herrbach, Mignonac, & Gatignon, 2004). This indicates that reputation can be a signal of collective desirability, which can connect employees to an organization, relating to lower turnover rates (Makarius, Stevens, & Tenhiaelae, 2017). Many real-life examples show that a negative organizational reputation can indeed impact employees’ turnover intentions. Several executives and employees have left Uber after a series of scandals had occurred, which harmed the Uber's reputation (Bort & Carson, 2017). Uber had lost the trust of both the public and a large proportion of its employees. Now CEO Travis Kalanick is working on re-establishing the organization’s reputation and restoring the trust of employees. Apparently, reputation and trust matter to employees.

Organizational reputations have become more exposed as companies and the media have globalized (Schwartz, 2000). Hence, the impact of (un)favorable reputations is more significant, which makes it important to assess the effect of organizational reputation on employees. Despite the fact that employees are one of the most important stakeholders of an organization, research on the relationship between organizational reputation and employee

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behavior is still relatively scarce (Alniacik, Cigerim, Akcin, & Bayram, 2011). Employees play a crucial role in creating value for organizations (O’Cass & Sok, 2013) and high employee turnover may lead to loss of valuable skills and resources, thereby affecting subsequent performance of organizations. This raises the question if and how organizational reputation can impact employee behavior, especially their turnover intentions.

The extent to which employees believe that their employers are concerned about their well-being has a significant impact on their work-related attitudes and behaviors (Hemdi & Nasurdin, 2006). Organizational trust has been empirically reported as an important

intervening variable impacting from one’s beliefs to behavioral intentions or outcomes (Hemdi & Nasurdin, 2006). Although previous research has already discussed the mediating role of organizational trust across different organizational issues (Hsin Chang & Wen Chen, 2008; Poon, Salleh, & Senik, 2007), none of the previous research has considered

organizational trust as a mediator in the issue of organizational reputation and employees’ turnover intentions. However, a positive reputation might enhance employee trust by signalling positive information, which may influence their intention to stay with the

organization. On the contrary, a negative reputation might be detrimental to trust by signalling negative information to employees, which might influence their intention to leave. Hence, to better understand the relationship between organizational reputation and employees’ turnover intentions, it is important to examine the role of organizational trust. Taken together this thesis aims to answer the following research question:

What is the mediating effect of organizational trust on the relationship between organizational reputation and employees’ turnover intentions?

The objective of this study is to fill in this gap in the literature and to contribute to existing literatures in three ways. First this research aims to extend current knowledge regarding the antecedents of turnover intention. Despite the increasing awareness that

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turnover often has negative effects on organizations (Park & Shaw, 2013), there is limited research of the antecedents of turnover (Hausknecht & Trevor, 2011). Although

organizational reputation is a theoretically relevant antecedent of turnover intention (Alniacik et al., 2011), its effects have not been widely studied. Therefore, this research will focus on the relationship between organizational reputation and turnover intention, thereby

contributing to the development of a richer understanding of the impact of organizational reputation on employee behavior.

Second, this research aims to go beyond the unidirectional models that are typically proposed, by investigating organizational reputation as a multidimensional construct (Lange, Lee, & Dai, 2011). Most research has treated organizational reputation as a simple,

unidimensional construct, however this implicitly restricts the conceptualization of reputation. Current research has shown that reputation consist of multiple dimensions (Lange et al., 2011; Rindova & Martins, 2012; Rindova, Petkova, & Kotha, 2007; Rindova, Williamson, Petkova, & Sever, 2005). Following Fombrun, Ponzi and Newburry (2015), this research will

investigate organizational reputation along multiple dimensions and assess its full implications.

Third, this research aims to contribute to existing literature by examining the

mechanisms by which organizational reputation influences turnover intention. Notions such as trust are crucial in understanding how resources, such as organizational reputation, are

important in determining organizational success (Branco & Rodrigues, 2006). Prior research has shown the importance of trust in turnover intentions (Mulki, Jaramillo, & Locander, 2006), but not yet in the issue of organizational reputation. Hence, this research will

contribute to a better understanding of the mechanisms underlying the relationship between organizational reputation and turnover intention.

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In practice, this research will raise managerial attention to the subject of organizational reputation and will highlight the importance of developing and maintaining a strong

reputation. Understanding employees' turnover intentions is valuable for managers, as the employees have not yet left the organization and managers can actively influence the factors causing employees' turnover intentions (Perryer, Jordan, Firns, & Travaglione, 2010). Reputational loss can be partly buffered by impression management tactics to repair any damage and restore public faith (Reuber & Fischer, 2010). By focusing on attaining a

favorable organizational reputation, managers can avoid the loss of valuable human resources (Barney, 1991). With this knowledge, managers may be able to restore their reputation and decrease turnover and turnover-related costs.

Both for practitioners and academicians, it is interesting to investigate how employees respond to organizational reputations and if organizational trust plays a role in the relationship between organizational reputation and employees’ turnover intentions. In the next section the literature review on organizational reputation, turnover intentions and trust is provided. Following the literature review, the research methodology and data analysis are presented. The paper is finished by concluding remarks and research implications.

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2. Literature review

2.1. Reputation

Reputation is a complex construct and a variety of definitions are used in the literature. One of the most widely referenced definitions of reputation is “An organizational reputation is a collective representation of a firm’s past actions and results that describe the firm’s ability to deliver valued outcomes to multiple stakeholders” (Fombrun & Van Riel, 1997, p. 10; Walker, 2010). The three key attributes emphasized in this definition are that reputation is based on perceptions, it is a collective judgement of stakeholders and it is comparative

(Wartrick, 2002). Walker (2010) added two more attributes, namely reputation can be positive or negative and is stable and enduring. Together these attributes led to a new definition of organizational reputation as “A relatively stable, issue specific aggregate perceptual

representation of an organization’s past actions and future prospects compared against some standard” (p. 370). However, this definition does not define organizational reputation in terms of a specific stakeholder group (Fombrun, 2012). Different stakeholder groups may have different perceptions of organizational reputations (Walker, 2010), which implies that attributions will be different depending on the set of perceivers that is sampled. Another definition that is often used is from Barnett, Jermier and Lafferty (2006) who define organizational reputation as “A collective judgments about an organization based on assessments of the financial, social, and environmental impacts over time” (p. 34). This definition implies that organizational reputation consists of attributions along multiple dimensions. No single definition of organizational reputation has been accepted as a uniform definition (Bontis, Booker, & Serenko, 2007; Fombrun, 2012).The concept of organizational reputation as a multidimensional construct has begun to gain increasing acceptance, therefore this research will follow this approach by examining organizational reputation along multiple dimensions. Scale measures may be used to capture the multiple dimensions of the reputation

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construct (Bontis, Booker, & Serenko, 2007). Thus, quantitative research where stakeholders are asked to rate the company on a number of attributes might be an appropriate option for reputation research (Cornelissen & Cornelissen, 2017).

Research suggests that organizational reputations develop in three ways: The personal experiences that stakeholders have with an organization, the initiatives and communications that managers make to strategically influence stakeholder perceptions, and the specialized coverage the organization receives from influential intermediaries such as analysists,

journalists and other sources in social networks (Fombrun, 2012). Media coverage influences the information held and interpretations made by stakeholders about the validity and merits of an organization’s initiatives and communications. Whether the information is true or not, negative publicity can cause reputational damage to how stakeholder perceive a company (Aula, 2010). 57% would attach credence to negative information regarding an organization which they do not trust and 25% would credit negative news regarding an organization they do trust upon (Edelman, 2011; McCorkindale & DiStaso, 2013). Loss of reputation can affect competitiveness, local positioning, the loyalty of stakeholders, media relations, the legitimacy of operations and even the license to exist (Rayner, 2003). Additionally, negative publicity can reduce trust in an organization, because publicity is considered a credible source of information (Ahluwalia, Burnarant, & Unnava, 2000). Compared to conventional media such as newspapers and television, social media content cannot be easily controlled and managed, which means that it is almost impossible for organizations to control the information that is released about themselves (Aula, 2010). Although organizations have little control over their reputation, they should understand that not all stakeholder groups share the same perspective (Honey, 2017). This research will focus on a specific stakeholder group, namely employees. Employees may be of particular interest because they exhibit behavior that may either have positive or negative consequences to an organization (Branco & Rodrigues, 2006). Prior

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research has shown that organizational reputation can affect employees’ attitudes and behaviors toward their organization (Hopkins & Weathington, 2006). Employees can withhold their effort through shirking, job, neglect, social loafing, or free riding (Bennett & Naumann, 2005) and may change the level of resources that the organization is dependent on, which can directly impact the organization’s financial performance (Neville, Bell, & Mengüç,

2005). Hence, a favorable reputation is critical for organizational performance, not only because of its potential for value creation, but also because employees’ exchanges with the organization are affected by favorable perceptions (Rindova & Martins, 2012). Although the literature on reputation shows theoretical support for organizational reputation as a driver of several performance and behavioral outcomes, empirical support for the impact of

organizational reputation on employee behavior could be established more thoroughly (Alniacik et al., 2011). Since the effects of organizational reputation on employees have not been widely studied, this research will examine the impact of organizational reputation on employee behavior.

2.2. Turnover Intention

One of the behavioral outcomes that may be impacted by an organization’s reputation is employees’ turnover intentions. Turnover intention is one of the most studied outcomes in the organizational behavior literature (Alniacik et al., 2011). Turnover intention is a measure of the psychological intention to quit that employees may develop as a result of discontent with their organization or potential better opportunities with other organizations, and may lead to actual turnover (Allen, Weeks, & Moffitt, 2005). Turnover intention should be clearly distinguished from leaving the organization. Turnover intention is the conscious and

deliberate willfulness to leave the organization (Tett & Meyer, 1993), or an individual’s desire to leave his or her current job (Nazir, Shafi, Qun, Nazir, & Tran, 2016). Actual turnover is when an employee separates from an organization (voluntary, involuntary, or other; McElroy,

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Morrow, & Rude, 2001). Turnover intention is a serious problem in organizations, while many organizations are understaffed, and permanent employees must often work longer hours and are under more pressure (Lynn, 2003). Furthermore, attracting and retaining qualified employees has become more difficult by the fact that job mobility is increasing (Hiltrop, 1999). Valuable and skilled employees are essential to an organization's performance in financial terms, employee morale and competitive advantage (Mayfield & Mayfield, 2008), which makes retention of employees of great importance to employers. Turnover has several costs for an organization such as the financial cost of separation, replacement costs and the training of the replacement (Buck & Watson, 2002; Cascio, 2006). Moreover, there are negative consequences such as productivity loss, workplace safety issues, and morale damage (O’Connell & Kung, 2007). More important, organizations may lose valuable resources, which may generate inefficient operations (Buck & Watson, 2002). In sum, retention of employees seems of great importance, which makes it useful to examine the antecedents of turnover intention.

2.3. Reputation and Turnover Intention

Research has shown that a favorable reputation matters in managing turnover intentions (Helm, 2013). Reputation can inform others about the trustworthiness, credibility and quality of the firm (Branco & Rodrigues, 2006). Therefore, reputational assets can be key drivers of positive reactions towards an organization. Organizations want to proclaim to employees that they are a good, safe place to work and a favorable reputation will actively support this message (Dowling, 2006). Organizations with strong reputations attract more job applicants and generate more loyalty and productivity from their employees (Fombrun & Van Riel, 2004). Honey (2017) expresses the value of reputation in terms of magnetism; a good reputation attracts and a bad reputation repels. This indicates that organizational reputations can affect employees’ intentions to stay with or leave an organization.

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A theory that could be helpful in explaining the effects of organizational reputation is signaling theory (Connelly, Certo, Ireland, & Reutzel, 2011; Spence, 1973). According to signaling theory, organizational reputations signal information about the past and future activities of an organization, that influence how employees, customers and other stakeholders view and behave towards them (Fombrun, 1996). Organizations are trying to communicate reputation through stories (Dowling, 2006), press releases, advertisements, websites etc. and stakeholder are to rely on their disclosures (Fombrun & van Riel, 2004). Especially under conditions of information asymmetry and uncertainty stakeholders will turn to an

organization’s reputation to inform them about the firm (Connelly et al., 2011) in terms of trustworthiness, credibility and quality (Branco & Rodrigues, 2006). Companies are trying to signal positive information to convey positive organizational attributes (Connelly et al., 2011). However, stakeholders do not only receive signals from companies themselves but also from other sources such as the media (Van den Bogaerd & Aerts, 2014). Thus, different sources may influence the perceptions that individuals have of an organization, which in turn influences an organization’ reputation (Spence, 1973). As mentioned before, organizational reputation can influence stakeholders’ decisions about the organization (Alniacik et al., 2011). More specifically, a favorable reputation may attract employees, consumers, and investors to an organization (Mulki, Jaramillo & Locander, 2006). On the other hand, an unfavorable reputation can lead to loss of employees, consumers and investors. Thus, the effects of reputation depend on the nature of the information that is conveyed to stakeholders.

Prior research has shown that having a reputation for being one of the best places to work resulted in lower turnover and increased applicant quality (Dineen & Allen, 2016). Building on signaling theory (Spence, 1973), it can be explained why employees are more likely to be attracted and retained by organizations with positive reputations. Employees may use organizational reputations as signals that provide information about the organization and

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prefer to stay with organizations that have better reputations. This way, reputation can elicit positive reactions towards an organization relative to its competitors (Branco & Rodrigues, 2006). Building a positive reputation can ensure the continuing participation of stakeholders in organizational activities (Brammer & Pavelin, 2006). Research has shown that perceived organizational reputation positively affects employee engagement (Men, 2012) and negatively affects turnover intentions (Alniacik et al., 2011). In sum, a positive reputation signals

positive information towards employees, which makes it more likely that employees will stay with the organization. Then, it follows logically that negative reputations may signal negative information towards employees and it is more likely that employees will consider to leave the organization.

The above arguments elucidate how the perception of the characteristics of the

organization for which one works can influence employees’ intention to stay with or leave the organization. It is expected that a positive reputation will lead to lower turnover intentions of employees, whereas a negative reputation will lead to higher turnover intentions of

employees. Taken together, this leads to the first research hypothesis;

H1: Organizational reputation will be negatively related to employees’ turnover intentions.

As noted above, extant literature indicates that reputation may affect turnover intentions. However, there is limited literature about the underlying mechanisms of this relationship. Trust is a fundamental mechanism in all social contexts (Bachmann & Zaheer, 2006) and is an important determinant of key workplace behaviors (Costigan, Iiter, & Berman, 1998). Previous research shows that trust is a key mediator of relations between organizational antecedents and employee outcomes (Colquitt, Scott, & LePine, 2007; Dirks & Ferrin, 2002). Trust might also be a primary mechanism through which organizational

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obtain a better understanding of the relationship between organizational reputation and the turnover intentions of employees, it is necessary to consider the underlying mechanisms of this relationship.

2.4. Trust

Organizations rely on relationships with stakeholders to create value and to survive (Freeman, 1984). Therefore, they need to maintain goodwill and legitimacy with various stakeholders, such as employees, governments, local communities, financiers, suppliers and customers. Trust may generate goodwill, which may favor the granting of legitimacy (Brinkerhoff, 2005). Trust is defined a as the willingness to be vulnerable to the discretionary actions of another party (Davis, Schoorman, Mayer, & Tan, 2000). Organizational trust describes the extent to which individuals trust an organization (Schoorman, Mayer & Davis, 2007). Stakeholder trust in organizations, then, entails the willingness of individuals to accept vulnerability to the actions of an organization based on positive expectations. Trustworthiness is seen as an important antecedent to trust (Schoorman et al., 2007) and should be distinguished from the concept of trust. Attributions along the dimensions of trustworthiness are what create trust, or the willingness to accept vulnerability (Branzei, Vertinsky, & Camp, 2007). Research has shown that trust in organizations differs across different types of stakeholders (Pirson & Malhotra, 2011) and that different dimensions of trustworthiness may be relevant in different types of relationships (Sheppard & Sherman, 1998). Trustworthiness is constituted of six dimensions, namely managerial competence, technical competence, integrity, benevolence, identification and transparency. Before discussing the role of trust, it is important to

understand the concept of trustworthiness and its dimensions, which will now be further explained. Attributions of managerial competence are based on perceptions of the organization’s ability to make strategic decisions and manage stakeholder relationships, whereas attributions of technical competence are based on the organization’s ability to deliver

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high-quality products and services (Schoorman et al., 2007). Integrity refers to the perceptions of the organizations general tendency to act fairly and ethically and benevolence refers to perceptions about the organization’s concern for stakeholders’ well-being. Moreover, identification stems from perceptions of value congruence and commitment. Last, transparency is based on the perceived willingness of the organization to share relevant information with their stakeholders. Altogether these dimensions of trustworthiness make up perceptions of trust and therefore will be incorporated in this research. However, depending on the stakeholder group, some dimensions are more important than others in predicting trust. According to stakeholder theory, stakeholders differ in in their expectations and interests and they will look for different signals regarding the trustworthiness of organizations (Pirson & Malhotra, 2011). Two dimensions of stakeholder relationships are particularly appropriate when studying organizational trust because each of them influences the type and degree of vulnerability a stakeholder faces, the type of information a stakeholder can access, and the attributions the stakeholder is likely to make regarding the organization. First, the depth dimension consists of a measure based on the frequency of interaction and the duration of the relationship between a stakeholder and an organization. It distinguishes between those that have shallow versus deep relations with the organization. The first base their trust largely on perceptions of integrity, whereas the latter base their trust largely on perceptions of

benevolence. Second, the locus dimension focuses on the position of the stakeholder relative to the organization and distinguishes between internal and external stakeholders. Internal stakeholders, such as employees, are more likely to base their perceptions on managerial competence, whereas external stakeholders, such as customers, are more likely to base their perceptions on technical competence. Employees are internal stakeholders and have deep relations with the organization, because they have frequent interactions with the organization and the duration of contact is likely to be long. This means that the dimensions of managerial

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competence, benevolence, identification and transparency will be of greater importance to them, compared to the dimensions of technical competence and integrity.

Trust has been widely recognized as a key enabler of organizational success (Davis et al., 2000) and fulfils a key role in organizational relationships (Bachmann & Zaheer, 2006). Research has shown that turnover intentions of employees is affected by their trust in the organization (Wong, Ngo, & Wong, 2003). Moreover, it is well established in the literature that trust is an important variable that lowers employee turnover and improves employee retention (Griffeth, Hom, & Gaertner, 2000; Tett & Meyer, 1993). Employees who trust their employer are more likely to stay with the organization and less likely to examine outside job possibilities. Hence, it is interesting to examine whether trust plays a role in the relationship between organizational reputation and turnover intention.

2.5. Reputation, Trust and Turnover Intentions

A key aspect of any stakeholder relationship built on trust is reputation (Oetzel, Westermann-Behaylo, Koerber, Fort, & Rivera, 2009). Reputation dictates how people behave and in whom they place trust (Honey, 2017). Indeed, research shows that organizational reputation has been associated with trust (Jin, Yong Park, & Kim, 2008). Trust is a valuable property which is required for all organizations, yet it could be lost in an instant (Yuncu & Karaca, 2017). When trust is lost, it becomes quite hard to regain it and such a loss of trust brings about inevitable consequences which could be referred to as trust damages. A negatively perceived organizational reputation can have a negative impact on trust, as well as on loyalty, word-of-mouth and satisfaction (Walsh & Wiedmann, 2004). Organizations with strong reputations are often observed to have earned public trust in four different ways (Yuncu & Karaca, 2017). First, a strong reputation reduces uncertainty when evaluating firms by showing expertise, reliability and intentionality (Rindova et al., 2005), which will improve employees willingness to be vulnerable to the company. Second, it signals the competence

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and goodwill of the firm (Campbell, 1999). Third, organizations with a strong reputation are expected to be less likely to engage in negative behaviors (Keh & Xie, 2009). Fourth, building a strong brand identity will help in developing trust (Karmark, 2013). Reputation is connected to branding through the brand’s ability to establish a distinct identity for the products and services its stands for. Brands have symbolic meanings for stakeholders and such meanings are what translate into affection and support for the brand (Karmark, 2013). Moreover, strong brands can engender feelings of trust and respect (Aaker, 2012). A brand can enhance an organization’s reputation and such a reputation reinforces the brand in turn (Fan, 2015). Hence, a brand is an essential part of an organization’s reputation management. In sum, stakeholders develop trust in an organization based on positive beliefs regarding their expectations about the intent and behavior of the organization (Shockley-Zalabak, Ellis, & Winograd, 2000), therefore people are more likely to perceive organizations with highly favorable reputations as trustworthy.

In a social exchange relationship, people exchange and reciprocate with positive attitudes, when their expectations and needs have been met by the other party (Blau, 1964; Gouldner, 1960). Accordingly, based on social exchange theory (Blau, 1964) and the theory of norm reciprocity (Gouldner, 1960), organizations that signal concern towards employees, may induce employees to reciprocate by increasing their display of organizational trust and willingness to stay with the organization (Hemdi & Nasurdin, 2006). Under the light of previous findings, a positive relationship between how employees perceive their organization and their trust is proposed. A good reputation creates trust, whereas a bad reputation may diminish trust (McCorkindale & DiStaso, 2013) This may hinder an organization’s relations with its stakeholders and can limit its networking abilities. Furthermore, by strengthening relationships between the firm and its various stakeholders, like employees (Davis et al., 2000), trust can influence the intention to stay with or leave an organization. Research has

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shown the importance of trust in employee attitudes and it has been linked to turnover intentions (Hopkins & Weathington, 2006). More specifically, it has been reported that organizational trust has a negative impact on turnover intentions of employees (Bijlsma & Koopman, 2003; Hemdi & Nasurdin, 2006; Lee, Lee, & Li, 2012; Schnake & Dumler, 2000) and that organizational trust acts as a significant predictor of an individual’s intent to quit (Dirks and Ferrin, 2001). When employees have faith in their organization, they are likely to remain loyal and committed, resulting in lower turnover intentions (Hemdi & Nasurdin, 2006). In other words, the higher employee’s trust in organization, the less likely he or she will leave the organization (Hemdi & Nasurdin, 2006). Hence, it is hypothesized that trust in an organization will be negatively related to turnover intentions. Taken together, employees’ perceptions about the organization seem to play a key role in shaping their trust in the organization, which in turn can influence their turnover intentions. Based on the previous findings it is hypothesized that when organizations have a positive reputation, it signals that employees can count on the statements and promises of the organizations which makes it is more likely that employees will trust the organization and stay with it. Contrary, when firms have a negative reputation it is less likely that employees perceive they can count on the statements and promises of the organizations and employees are more willing to examine outside job possibilities. This reasoning explains how employees’ perception of an

organization can influence trust and the intention to stay with or leave the organization, which leads to the second research hypothesis.

H2: Organizational trust will mediate the relationship between organizational reputation and turnover intentions.

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3. Methodology

3.1. Sample and Data Collection

Research data is collected through an online questionnaire. Online surveys are relatively inexpensive to conduct, have the potential to collect a lot of data quickly (Ritter & Sue, 2007) and are less time consuming, which makes it more cost effective and convenient to collect data online (Wang, Rothschild, Goel, & Gelman, 2015). Web-based surveys provide a measure of anonymity for survey respondents similar to other self-administered surveys (Ritter & Sue, 2007). However, web-based surveys often have higher unit and item

nonresponse rates (Fricker & Schonlau, 2002). Another disadvantage of online surveys is that there is no way to guarantee if the participant is reading the questions and understands them (Schoenherr, Ellram, & Tate, 2015), or is responding without regard to the content of the item (Meade & Craig, 2012). When the quality of the data is a concern, special items can be designed to detect careless responses. In this research, a control question is added to detect such careless responses. G*Power, a statistical power analysis program designed to analyze different types of power and compute sample size (Faul, Erdfelder, Buchner, & Lang, 2009, is used to determine the required sample size. The a priori test with G*Power indicated that at least 107 responses were needed to ensure the sample is large enough for analysis. The survey is administered to employees of several organizations located in the Netherlands. The criteria in this study included individuals who are 18 years or older, reside in the Netherlands, and currently have a full-time or part-time job. The population can be of any race, gender, or ethnicity, but must be able to read and understand English. A total of 172 individuals

participated in this study by voluntarily filling in the online questionnaire. After filtering out careless responses through a control question and removing unfinished cases, 108 cases were used for data analysis. First, an introductory sheet described the survey and explained the purpose of the study. Next, the respondents had to confirm that there was informed consent.

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Following the recommendations of Podsakoff, MacKenzie and Podsakoff (2012), the antecedents were separated from the outcomes in the survey and respondents were assured about the anonymity and confidentiality of their responses. Participants were asked about their perceptions of the organization they are currently working for. Furthermore, they had to rate how much they trust the organization and if they intended to leave the organization on the short term. Some demographic data (age, gender, education level, tenure in the organization) was also collected. Data was recorded on online forms via internet. The survey took around ten minutes. The mean age of subjects was 34 years (range: 20-64; SD =13.3) and 48% were male. The mean respondent organizational tenure is 8 years with a standard deviation of 9.2. The average education levels were associate’s degree and bachelor’s degree.

In this study, a quantitative method is used to guide the research. When the research issues is clearly defined and the questions put to respondents require unambiguous answers, quantitative measures such as a questionnaire may be appropriate (Brannen, 2005). A cross-sectional approach is used, as the data is collected over a short period. E-mail messages containing the web-link of the online questionnaire were sent to several employees. Additionally, social media is used to reach more participants. The use of social media for recruitment in online surveys may be particularly fruitful and can provide access to a large number of potential participants (Fazzino, Rose, Pollack, & Helzer, 2015).

3.2. Measurement

3.2.1. Organizational Reputation

Perceived corporate reputation was measured using The RepTrak® System (Fombrun, Ponzi & Newburry, 2015). The RepTrak® System recognizes the fact that a company’s overall reputation is rooted in the perceptions of its stakeholders (Newburry, 2010), each of which responds to different signals or informational inputs (Spence, 1973). RepTrak® System is increasingly being used for reputation measurement (Fombrun, Nielsen & Trad, 2007) and

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can be applied across stakeholders, industries and countries (Fombrun et al., 2015). It consists of 23 attributes within seven dimensions, namely Products/Services, Innovation, Workplace, Governance, Citizenship, Leadership and Performance (Fombrun, Ponzi & Newburry, 2015). The first dimension, the Products/Services dimension, assesses perceptions of an

organization’s offerings based on whether they are thought to be high in quality, in value and service, and if they are able to meet customers’ needs. Second, the Innovation dimension assesses whether the organization is perceived as innovative and adaptive. Third, the Workplace dimension assesses perceptions of an organization’s practices in maintaining an environment that shows concern for employees, and for treating and rewarding them fairly and equitably. Fourth, the Governance’ dimension assesses whether the organization is perceived as ethical, fair and transparent. Fifth, the Citizenship dimension assesses

perceptions of an organization as environmentally friendly, a supporter of good causes and a positive contributor to society. Sixth, the Leadership’ dimension is intended to assess

perceptions of leaders as excellent and visionary managers, and strong endorsers of their organization. Last, the Performance dimension assess perceptions regarding the overall financial performance, profitability and growth prospects of the organization. The RepTrak® system is a multidimensional measure of reputation that differs from commonly used

measures of reputation such as Fortune’s “America’s Most Admired Companies”, which restrict the range of organizational reputation (Lange et al., 2011). It is empirically proven that the RepTrak® System is a reliable and validated measure of organizational reputation with Cronbach’s α’s were all above 0.7 (Fombrun et al., 2015). It contains 23 items which can be scored on a seven-point Likert scale ranging from “Does not describe well” (1) to “Describes very well” (7). Respondents also had the option to reply “Not sure” to the questions posed. Example items are “The organization rewards its employees fairly” and “The organization is open and transparent about the way the company operates”.

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Trust will be measured using the six trustworthiness dimensions of Pirson & Malhotra (2011). Attributions along these dimensions are what create the willingness to accept vulnerability (Branzei et al. 2007; Davis et al., 2000; Schoorman et al., 2007). This conceptualization is consistent with earlier work that has focused on the attributional underpinnings of trust (Mayer & Davis, 1999). Attributions along six key dimensions of trustworthiness are examined, namely Managerial competence, Technical competence, Integrity, Benevolence, Identification and Transparency. Attributions regarding ability are based on the perception that organization has the requisite level of competence to perform the tasks entrusted in the organization (Mayer, Davis, & Schoorman, 1995). The dimension of ability is disaggregated into managerial competence and technical competence (Pirson & Malhotra, 2011).

Managerial competence is based on the organization’s ability to make strategic decisions and manage stakeholder relationships, whereas technical competence is based on the

organization’s ability to deliver high-quality products and services. Attributions of integrity are based on whether the organization is perceived as forthcoming, honest and moral.

Attributions regarding benevolence assess whether the organization is perceived as exhibiting goodwill and has concern for the employees’ wellbeing. Identification-based trust stems from the understanding and internalization of the interests and intentions of the other party, based on shared values and commitment (Lewicki & Bunker, 1996). Last, transparency is about the perceived willingness to share information with vulnerable stakeholders. Research has shown that it is a validated and reliable scale with Cronbach’s alphas ranging from 0.85 to 0.93 (Pirson & Malhotra, 2011). The test consist of 17 items which can be scored on a five-point Likert scale ranging from “Strongly disagree” (1) to “Strongly agree” (5). Higher scores indicate higher levels of trust. Example items are “The organization listens to my needs” and “The organization openly shares all relevant information”.

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Employees’ turnover intention is measured with a six-item scale (TIS-6) adapted from the 15-item scale initially developed by Roodt (2004). The original version of the turnover intention scale, developed by Roodt (2004), contained 14 items and used a five-point Likert scale for measurement (Martin & Roodt, 2008). However, Jacobs and Roodt (2008) listed an updated version of the turnover intention scale that included 15 items on a five-point Likert scale. Bothma and Roodt (2013) later published a shortened version of the scale, known as TIS-6, which included six items from the 15-item scale (Bothma & Roodt, 2013). The six-item version was the guide for this study. Research has shown that the TIS-6 can be used for business applications and academic research to validly and reliably (α=.8) assess turnover intention (Bothma & Roodt, 2013; Taboli, 2015). The six items can be scored on a five-point Likert-type scale with options ranging from “Never” (1) to “Always” (5), “To no extent” (1) to “To a very extent” (5), and “Highly unlikely” (1) to “Highly likely” (5). Higher scores indicate higher levels of turnover intentions (Taboli, 2015). An example item is “How often have you considered leaving your job?”.

3.2.4. Control Variables

Following prior literature, some control variables need to be considered, namely gender, age, education level and tenure. Variables all found to correlate with turnover intentions (Huselid & Day, 1991). Demographic control variables will be measured using single-item measures. Gender was coded as 1 for male and 2 for female, age and tenure are measured in years and education is reported on an eight-point scale ranging from 1 (less than high school) to 8 (doctoral degree). Staines, Pottick and Fudge (1986) argued that these types of variables need to be controlled for, because these kinds of variables have the potential to inflate the relations between other variables.

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Stepina, & Boyle, 2002). It is found that female workers report higher levels of turnover intentions than men (Igbaria & Baroudi, 1995). Moreover, research suggests that older

workers may report lower turnover intentions (Griffeth et al., 2000). Also, age and gender are often included as a control variable in research related to behaviors such as being trusting (Tan & Lim, 2009). One reason is that older age groups are more likely to trust than younger ones because of their greater experience (Sutter & Kocher, 2007). Hence, age and gender may be important negative correlates of trust and turnover intention, therefore they are controlled for in this study

Education level can also impact turnover intentions. It is often assumed that the level of education has a positive effect on the probability of changing jobs since a higher education is often associated with better labor-market alternatives (Royalty, 1998). Several researchers found a positive effect for the level of education on turnover intentions (Hom & Griffeth, 1995; Griffeth et al., 2000). More specifically, it was found that employees with graduate degrees are less likely to change positions, change institutions, or leave (Ingersoll, Olsan, Drew-Cates, DeVinney, & Davies, 2002).

Tenure was found to be negatively associated with turnover at the individual level (Griffeth et al., 2000). People with more years of experience tended to have lower turnover intentions (Nadiri & Tanova, 2010). Moreover, longer tenured employees may have long standing personal trust issues (positive or negative) with top management that could affect their responses to the trust measure (Hansen, Dunford, Boss, & Angermeier, 2011). Hence, this research will control for the possible influence of tenure.

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4. Data Analysis

Data from the current study were processed and analyzed by using Statistical Package for Social Science (SPSS) version 24. Before starting the data analyses, the internal consistency of the construct measures was evaluated using Cronbach’s α and descriptive statistics were calculated. The descriptive statistics consist of the mean scores and standard deviations of the variables. Three statistical procedures were depicted for the data analyses, namely Pearson correlation analysis, multiple regression analyses and simple mediation. Pearson correlation analysis is used to look at the relationships between the control variables, organizational reputation, organizational trust and turnover intentions. This gives an initial picture about the strength of the relationships between the variables. However, correlation coefficients give no indication of the direction of causality (Field, 2013). The first hypothesis expects a negative relationship between organizational reputation and turnover intentions. In order to test the first hypothesis, hierarchical multiple regression was used, as both the independent and the

dependent variable are continuous. Multiple regression analyses can be used to determine the significant predictors of turnover intention and to explore the variance explained. The second hypothesis tried to establish whether organizational trust acts as a mediator in the relationship between organizational reputation and turnover intentions. This is known as a simple

mediation, which was analyzed by using the Process macro developed by Andrew F. Hayes (2012) for SPSS. The model used in Process was number 4, for a simple mediation. This is useful to examine any direct and indirect effects (Hayes, 2012).

178 participants filled in the questionnaire. After deleting records with missing cases and cases that failed the attention check, 108 questionnaires remained and constituted the sample for this study. A test for multivariate normality had been conducted prior to the analysis, which yielded positive results (skewness and kurtosis of all items below one). Also, the histogram and normal probability plot show that the distribution is normal. The

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Kolmogorov-Smirnov and Shapiro-Wilk were not significant for organizational trust and turnover intention (p > .05). However, for organizational reputation both tests were significant (p < .05), which means the variable is not normally distributed. The Q-Q plot shows that the variable is slightly negatively skewed, which indicates that a higher proportion of the scores were at the higher end of the distribution. Furthermore, the boxplot shows there are some outliers. Due to violation of the normality assumption bootstrapping was applied. The scatterplot shows the standardized residuals against the predicted values of the model. It shows that the assumptions of linearity and homoscedasticity have been met. The assumption that the errors are independent is likely to be met if the Durbin-Watson statistic is close to 2 (Field, 2013). In this case, The Durbin Watson statistic was 2.018, which indicates that the residuals are independently. Additionally, multicollinearity tests were performed. The statistics generally used to test for collinearity are the variance inflation factor (VIF) and the condition index (CI). The VIF is an index of the degree of inflation of the variance of parameter estimates that results from the correlation between two predictor variables;

variances that are too high can result in unstable parameter estimates. A VIF larger than 10.0 is the generally accepted value indicating a problem of collinearity (Field, 2013). In this study the VIFs were 1.018 and 1.088, well below the threshold value of 10.0. In addition, CI is also used to test for the presence of collinearity. The CI is an index of the dependency of one variable on the others. Thus, like the VIF, large CIs (>30) indicate inflation in the standard error of the parameter estimate of a variable (Field, 2013). Fortunately, in the present sample, the largest CI was 24.73, thus, there is no need to examine variance proportions. Together, these two collinearity diagnostics indicate no major problem associated with multicollinearity in the present data.

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4.1. Reliability Analysis

Alpha coefficients were used to measure the reliability of the scales used for organizational reputation, organizational trust and turnover intention, see Figure 1. A value of .7 is an acceptable value for Cronbach’s α, values substantially lower indicate an unreliable scale (Field, 2013). Before conducting the reliability analysis, the counter-indicative items, items that are phrased so that an agreement with the item represents a low level of the construct being measured, were recoded into different variables. The analysis shows that the reputation scale has high reliability, with Cronbach’s Alpha = .924. The corrected item-total correlations indicate that all the items have a good correlation with the total score of the scale (all above .30), except for the item “The company is a profitable company” (r=.270). Also, none of the items would substantially affect reliability if they were deleted. The turnover intention scale (α=.826) and trust scale (α=.917) were also shown to be reliable. The corrected item-total correlations indicate that all the items have a good correlation with the total score of their respective scale (all above .30). Again, none of the items would substantially affect reliability if they were deleted.

4.2. Correlation

Pearson correlation test was used to examine the relationship between organizational

reputation, organizational trust and turnover intentions. The bootstrap function is used to get robust confidence intervals. As shown in Table 1 there was a negative and significant relationship between organizational reputation and turnover intentions (r = -.484, p < .001), likely indicating that organizations who are perceived to have a higher reputation, will experience lower employee’ turnover intentions. Also, there was a positive significant relationship between organizational reputation and organizational trust (r = .673, p < .001). This could indicate that as an organization is perceived to have a better reputation, it will be perceived as more trustworthy. Finally, there was a negative, significant correlation between

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trust and turnover intentions (r = -.654, p < .001), which could be indicative of the fact that organizations who are perceived to be more trustworthy, will experience lower employee turnover intentions. Finally, the control variables were only weakly and not significantly correlated with organizational reputation or turnover intentions, indicating that there is no linear relationship between the variables. However, trust showed a weak, but significant correlation with gender, indicating that women have higher levels of organizational trust. Given the lack of normality in some of the variables, it is advised to be more concerned with the bootstrapped confidence intervals than the significance per se (Field, 2013). This is

because the bootstrap confidence intervals will be unaffected by the distribution of scores, but the significance value might be. For the relationship between organizational reputation and turnover intentions the interval is -.612 to -.346, for organizational trust and turnover intentions it is -.749 to -.542, and for organizational reputation and organizational trust it is .525 to .789. A confidence interval is the boundary between which the populations value falls (in 95% of samples), therefore, if this interval crosses zero it means that the population value could be zero (no effect at all). For the three correlation coefficients none of the intervals cross zero, therefore we can be confident that there is a genuine effect in the population (Field, 2013). Analysis through hierarchical multiple regression will investigate this further.

Table 1: Descriptive Statistics, Correlations and Reliabilities

Variables M SD 1 2 3 4 5 6 7 1. Gender 1.52 0.51 - 2. Age 33.68 13.32 -.264 ** [-.440, -.077] - 3. Tenure 8.08 9.6 -.281 ** [-.443, -.102] .740** [.638, .838] - 4. Education Level 4.83 1.21 .120 [-.075, .311] -.250* [-.440, -.039] -.176 [-.365, .017] - 5. Turnover Intention 2.60 0.80 -.134 [-.324, .062] -.075 [-.264, .140] .037 [-.162, .237] -.091 [-.135, .309] (.826) 6. Reputation 4.91 0.95 .052 [.144, .261] -.087 [-.296, .135] -.131 [-.351, .094] .025 [-.125, .171] -.484** [-.612, -.346] (.924) 7. Trust 4.77 0.91 .207* [.001, .394] -.0.55 [-.255, .159] -.189 [-.419, .055] .015 [-.167, .194] -.654** [-.749, -.542] .673** [.523, .789] (.917)

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Note: Alpha coefficients are on the diagonal in parentheses. Bootstrap 95% CIs reported in brackets. **. Correlation is significant at the 0.01 level (2-tailed).

*. Correlation is significant at the 0.05 level (2-tailed).

4.3. Regression

Hierarchical multiple regression was performed to investigate the ability of organizational reputation and organizational trust to predict levels of turnover intentions, after controlling for gender, age, tenure and education level. As before, bootstrapping will be used to overcome any problems associated with non-normality. In the first step of hierarchical multiple

regression, four predictors were entered: gender, age, tenure and education level. This model was not statistically significant F(4, 94) = 1.266, p = .298 and explained only 1.1 % of variance in turnover intentions. After entry of organizational reputation and organizational trust in Step 2, the total variance explained by the model as a whole was 48%, F(6, 92) = 13.812, p < .001. Thus, the introduction of organizational reputation and organizational trust explained additional 47% variance in turnover intentions, after controlling for gender, age, tenure and education level (R² Change = .423; F(2, 92) = 36.966, p < .001). This means that 53% of turnover intentions are related to other factors. In the final model only one out of five predictor variables was statistically significant, with organizational trust recording the highest Beta value (β = -.635, p < .001). In other words, if trust in an organization increases,

employees’ turnover intention decreases. Organizational reputation was not found to be a significant predictor of turnover intentions (β = -.058, p =.591). As can be seen in Table 2, trust is the strongest predictor of turnover intentions. The bootstrap confidence intervals also show that organizational trust is a significant predictor of turnover intentions, b = -.544 [-.694, -.382], p < .001, and organizational reputation is not, b = -.047 [-.193, .068], p = .544. The latter interval crosses zero, which means that the population value could be zero (no effect at all).

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Table 2. Hierarchical regression Model of Turnover Intentions, with 95% bias corrected and

accelerated confidence intervals. Confidence intervals and standard errors based on 1000 bootstrap samples. R R² R² Change B SE B β T Step 1 .266 .051 Constant 3.049*** (1.850, 4.222) .596 5.763 Gender -.243 (-0.598, 0.110) .176 -.154 -1.463 Age -.013 (-0.033, 0.009) .011 -.221 -1.455 Tenure .014 (-0.017, 0.045) .016 .172 1.141 Education level .056 (-0.093, 0.207) .079 .084 .813 Step 2 .688 .474*** .423** Constant 5.482*** (4.446, 6.484) .531 10.810 Gender -.061 (-0.309, 0.216) .123 -.039 -4.73 Age -.005 (-0.024, 0.011) .009 -.088 -.758 Tenure -.002 (-0.023, 0.023) .012 -.023 -.195 Education level .053 (-0.073, 0.185) .061 .080 1.202 Reputation -.047 (-0.193, 0.068) .086 -.058 -.540 Trust -.544 (-0.694, -0.382) .095 -.635*** -5.752

Note: Statistical significance: *p<.05; **p<.01; ***p<.001. Bootstrap 95% CIs reported in parentheses.

4.4. Mediation Analysis

The mediation test examines the indirect effect of predictor (X) on the outcome (Y) variable through mediator variable (M). Figure 2 shows the mediation model of the relationship between the independent variables and the outcome variable. Path a shows the relationship between the independent variable and the mediator. Path b refers to the relationship between the mediator and the dependent variable. Path c’ indicates the relationship between the independent variable and the dependent variable after controlling for the mediator. From a simple mediation analysis conducted using ordinary least squares path analysis (Hayes, 2018), it appeared that organizational reputation influenced turnover intentions through its effect on

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organizational trust. As can be seen in Figure 2, participants perceiving relatively higher reputation, are estimated to be higher in their trust (a₁ = .642, p < .001) and participants relatively higher in trust are estimated to be lower in their intention to quit (b₁ = - .528, p < .001). A bias-corrected bootstrap confidence interval for the indirect effect (ab =-.399, p < .001) based on 5.000 bootstrap samples was entirely below zero (-.462 to -.219), which makes it more likely to be a genuine indirect effect (Field, 2013). Moreover, the total effect was significant (c₁: -.406, p < .001). Together, this indicates a tendency for those who perceive their organization more favorable, to trust the organization more, which in turn translates into lower turnover intentions. As observed from table 3 and 4, there was no evidence that

reputation influenced turnover intentions independent of its effect on organizational trust (c′ =-.067, p = .425). Thus, when paths a and b are controlled for, a previously significant relation between the independent and the dependent variables is no longer significant (Baron & Kenny, 1986). This means that reputation has an indirect, but not a direct effect on turnover intention. Baron and Kenny (1986) claim that the evidence for mediation is strongest when there is an indirect effect but no direct effect in equation, which they call “full mediation”. The results of the mediation analysis are depicted in Table 3 and 4.

Figure 2. Standardized regression coefficients of the relationship between organizational

reputation and turnover intentions, mediated by organizational trust.

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Table 3. Beta coefficients for the paths and R2 for the variables

Consequent

Trust (M) Turnover (Y)

Antecedent Coeff. SE p Coeff. SE p

Reputation (X) a₁ .642 .068 <.001 c₁' -.067 .083 .452

Trust (M) --- --- --- b₁ -.528 .087 <.001

Constant i₁ 1.621 .343 <.001 i₂ 5.453 .340 <.001

R₂ = .452 R₂ = .431 F(1,108) = 87.699, p < .001 F(2,105) = 39.80, p < .001

Table 4. Results of the Mediation Analysis

Effect SE P LLCI ULCI

Direct effect c₁' -.067 .083 .425 .235 .098

Total effect c₁ -.406 .071 <.001 .547 .264

_{Boot SE} Boot LLCI Boot ULCI

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5. Conclusion and Discussion

The current study examined the relationship between organizational reputation, organizational trust and turnover intentions of employees. Specifically, the study examined the potential mediation role of organizational trust on the relationship between organizational reputation and turnover intentions. Findings show that organizational reputation was not significantly related to turnover intentions on its own. Hypothesis 1, which stated that organizational reputation would be negatively related to employees’ turnover intentions, is not supported. However, together with organizational trust, organizational reputation is significantly related to turnover intentions. The results demonstrate that organizational reputation can increase organizational trust and that organizational trust can reduce employees’ turnover intentions. Thus, trust fully mediates the relationship between organizational reputation and turnover intentions as hypothesized, which means hypothesis 2 is supported. Hence, to reduce turnover intentions and to increase retention of employees, organizations should try to attain a

favorable organizational reputation and focus on the creation of organizational trust.

Employees who perceive high trust and support from their organization will be most likely to stay with the organization. Additionally, those employees will have strong positive attitudes about their organization and are more likely to commit to its vision, mission, values, and long-term goals (Ertürk, 2014).

This research contributes to the literatures on organizational reputation, organizational trust and turnover intentions in several ways. First of all, this study contributes to

management and organizational research and I/O psychology by examining the antecedents of turnover intention. There was limited research of the antecedents of turnover (Hausknecht & Trevor, 2011) and the impact of organizational reputation on employee behavior (Alniacik et al., 2011). This research examined the effects of organizational reputation on employee behavior, which was a relevant antecedent of turnover intention (Alniacik et al., 2011).

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Additionally, this research investigated the importance of organizational trust, which is assumed to fulfil a key role in organizational relationships (Bachmann & Zaheer, 2006). The findings show that organizational reputation and organizational trust are important factors in the retention of employees. This is consistent with prior literature that shows that

organizational reputation is an intangible yet key factor that influences stakeholder behavior, such as employee behavior (Friedman, 2009). The results of this study indicate that

organizational trust is a key determinant of employee behavior. Depending on the level of trust and other factors, like the availability of outside options, employees will either stay with the organization or withdraw from the situation (Riegelsberger, Sasse, & McCarthy, 2005). Trust will be influenced by the information that an organizational reputation signals, thus signalling trust-warranting properties seems a primary concern for organizations. This research extends findings on the antecedents of turnover intention and contributes to a richer understanding of the impact of organizational reputation on employee behavior.

Second, this research is contributing to a broader understanding of the impact of organizational reputation by conceptualizing organizational reputation as a multidimensional construct. Most definitions of organizational reputation employed in the management

literature are largely unidimensional (Lange et al., 2011), but these measures have a strong potential to implicitly restrict the range of reputation along one of the dimensions. In order to assess the full implications of organizational reputation, it needs to be measured along multiple dimensions. In an attempt to go beyond the unidirectional models that are typically proposed (Lange et al., 2011), this research examined organizational reputation along seven dimensions (Fombrun et al., 2015). Additionally, this research has focused on a specific set of perceivers, namely employees. Some researchers define organizational reputation in terms of an aggregate perception of all stakeholders (Fombrun, 1996), but it is shown that there are major problems with this definition (Walker, 2010). Organizations may have a different

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reputation per stakeholder group, therefore it is not appropriate to simply sum these opposing reputations in the development of an aggregate perception. Prior research has indeed

acknowledged that the dimensions will be very different depending upon the set of perceivers that is sampled (Lange et al., 2011). The findings of this research extend the emerging trend in the management literature to draw on multiple dimensions of organizational reputation and to make a distinction between different stakeholder groups.

Third, this research is an extension of the current literature by identifying organizational trust as one of the underlying mechanisms through which organizational reputation influences employees’ turnover intentions. This knowledge is of great value because retaining talent has become increasingly difficult as managers compete for high performing employees in a global market (DeJesus, 2017). Attraction and retention of

employees is important to obtain and develop human capital with high levels of skill (Branco & Rodrigues, 2006) and organizations can achieve a sustainable competitive advantage when they retain highly skilled employees (Friedman, 2009). The findings show that trust is an important mediator, which can impact employees’ turnover intentions. This is consistent with prior research that already showed the importance of trust in turnover intentions (Mulki, Jaramillo, & Locander, 2006). However, this research extends the current knowledge

regarding the relationship between organizational trust and organizational reputation. Hence, this research will contribute to a better understanding of the mechanisms underlying the relationship between organizational reputation and turnover intention.

Last, the findings of this research may contribute to business practice. This study calls attention to the efforts companies and managers can make to actively influence the factors causing employees’ turnover intention (Perryer, Jordan, Firns, & Travaglione, 2010). More specifically, it will raise managerial attention to the subject of corporate reputation and will highlight the importance of developing and maintaining a strong reputation. By focusing on

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attaining a favorable organizational reputation and on creating organizational trust, managers can avoid the loss of valuable human resources (Barney, 1991). Organizational reputations can be seen as signals or marketing messages projected to stakeholders to convey a desirable image of the company (Basdeo, Smith, Grimm, Rindova, & Derfus, 2006). Corporate

communication, reporting, lobbying, and other social interactions are considered strategic signals that are aimed at influencing people’s perceptions about a company and inform others about the key features of the firm (Hooghiemstra, 2000). Perceptions that stakeholders have of an organization are not only based on the information and cues that are received from the organization itself, but other sources such as word-of-mouth and media reporting can have an impact as well (Cornelissen & Cornelissen, 2017). Firms can contribute to the construction of their reputations by targeting important intermediaries and channels such as analysists, journalists and other sources in social networks, and seeking to manage the impressions that others portray (Fombrun, 2012). Furthermore, reputational loss can be partly buffered by impression management tactics to repair any damage and restore public faith (Reuber & Fischer, 2010). Damage to reputation can occur in a crisis situation (Coombs & Holladay, 2002) or when trust is shown to have been misplaced (Honey, 2017). An organization’s communicative response to a crisis can limit and repair the reputational damage (Coombs & Holladay, 2002). With this knowledge, managers may be able to restore their reputation and decrease turnover and turnover-related costs.

Moreover, Human Resource Management (HRM) can be linked to organizational reputation (Friedman, 2009). Organizational reputations are built from the inside out and strategic HR is linked to corporate reputation through corporate communication and employer branding (Martin, 2009). Strategic HRM practices include marketing the organization as an ideal place to work by offering benefits that go beyond compensation (DeJesus, 2017). Effective HRM practices are the main factor for the success of a firm on employee retention

The mediating effect of organizational trust on the relationship between organizational reputation and turnover intentions