WORD-OF-MOUTH ABOUT EMPLOYERS
AND THE DECISION TO APPLY:
THE ROLE OF PRIOR EMPLOYER
KNOWLEDGE
Master Thesis
MSc Human Resource Management
TABLE OF CONTENTS
ABSTRACT ……….. 3
INTRODUCTION ………... 4
THEORETICAL BACKGROUND ……….………. 7
1. Word-of-mouth and the intentions to apply ..……….. 7
2. The mediating effect of organisational attractiveness in the relation between word-of-mouth and the intention to apply………... 8
3. The moderating role of employer knowledge in the relation between word-of-mouth and organisational attractiveness ………... 12
METHOD ………... 15
Sample ………. 15
Design & procedure ………. 15
Materials ……….. 16 Measures ………. 19 RESULTS ………... 20 Manipulation check ………. 20 Descriptive statistics ……… 20 Control variables ……….. 22 Hypotheses testing ………... 22 DISCUSSION ………. 25 Findings ………... 25 Theoretical implications ……….. 26 Managerial implications ……….. 29
Strengths, limitations and future research directions ………... 31
Conclusion ………... 33
REFERENCES ………...… 34
ABSTRACT
Word-of-mouth about an employer is a powerful information source to job seekers, due to its high level of perceived credibility. Previous recruitment literature emphasized the impact favourable word-of-mouth, while word-of-mouth can also contain unfavourable information. The present study investigated to what extent both favourable and unfavourable of-mouth influence intentions to apply. Impressions about the employer prior to receiving word-of-mouth influence the way word-word-of-mouth is perceived. These impressions are called employer knowledge and are incorporated in this study. Results of our online experiment (N = 146) indicated that the favourability of word-of-mouth determined job seekers’ level of organisational attractiveness and, consequently, their intentions to apply. Prior employer knowledge moderated this relation, in a way that word-of-mouth had more impact on organisational attractiveness when job seekers had a sophisticated level of employer knowledge. We address implications of these findings in the discussion section.
INTRODUCTION
For organisations to ensure their survival, employing talented people is a must. Organisations that can attract excellent talent will outperform competitors who do not, since talent is rare, valuable, difficult to imitate and hard to substitute (Barney & Wright, 1998; Ployhart, 2006). However, attracting talented applicants is not an easy job. A study across more than 42,000 organisations in 43 countries pointed the difficulty of finding talent by showing that 40% of the organisations had to deal with talent shortages in 2016 (ManpowerGroup, 2017). Due to these shortages, competition for attracting talent is high and organisations need to find ways to become an employer of choice; an employer that is the first choice of first-class candidates due to the employers’ status and reputation (Sutherland, Torricelli & Karg, 2002).
Job seekers are people who have some interest in the job, meet the criteria for the job and might consider applying (Ryan, Horvath, & Kriska, 2005). For them, talent shortages result in a situation of various employment options and hence they are in the position in which they can critically compare and evaluate potential employers (Chapman, Uggerslev, Carroll, Piansentin, & Jones, 2005). Job seekers need to feel attracted to an employer to take it into serious consideration and to develop the intention to apply (Gomes & Neve, 2011; Slaugther, Stanton, Mohr, & Schoel, 2005). Consequently, higher levels of organisational attractiveness increase candidate application pools and enlarge chances for employers to select the most appropriate and talented employees (Liu, Keeling & Papamichail, 2016; Thomas & Wise, 1999). Therefore, it is important for employers to know on what grounds job seekers base their sense of organisational attractiveness and how that sense eventually leads to intentions to apply.
non-commercial communicator (such as current employees of an organisation) and a receiver (Arndt, 1967). Word-of-mouth can differ in its favourability: it can contain both favourable and unfavourable information about an employer.
Most recruitment studies emphasize the impact of favourable word-of-mouth and these studies find significant positive effects on the perceived organisational attractiveness (e.g. Collins and Stevens, 2002; Jaidi, Hooft & Arends, 2011; Van Hoye, 2013; Van Hoye and Lievens 2005, 2007, 2009). Only a few scholars also incorporated unfavourable word-of-mouth and the outcomes are mixed: whereas some studies find a significant negative effect on organisational attractiveness (Kanar, Collins & Bell, 2010; Van Hoye & Lievens, 2009), some studies find no effect at all (Jaidi et al., 2011; Van Hoye & Lievens, 2007).
It is important to understand what impact unfavourable word-of-mouth has on organisational attractiveness and under what conditions, since unfavourable word-of-mouth can be detrimental for attempts to become an employer of choice. In current literature, not much attention is given to the explanations for the inconsistency in findings regarding the impact of unfavourable word-of-mouth on organisational attractiveness.
However, previous research has not investigated the impact of these prior employer knowledge structures on the effect of the favourability of word-of-mouth on organisational attractiveness. Organisational attractiveness can eventually lead to application intentions and it is therefore important to know how a sense of organisational attractiveness is formed. Word-of-mouth and employer knowledge as information sources to job seekers have not been studied together This study attempts to fill this gap in current literature by studying the combined effect of word-of-mouth and prior employer knowledge. This study will answer the following research question:
How does word-of-mouth about an employer impact intentions to apply for a job vacancy and how does the level of prior employer knowledge impact this effect of
word-of-mouth?
Everyone can receive word-of-mouth about employers in various contexts, but when one is not looking for a job, this information is not as useful as it is for people who are looking for a job. Therefore, in this study we focus on the impact of word-of-mouth on job seekers in particular. The conceptual model of this study can be found in Figure 1.
Favourability of
word-of-mouth Intentions to apply
Organisational attractiveness Employer knowledge
Figure 1. Conceptual model
+
+
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The effect of the favourability of word-of-mouth will be examined by an online experiment among a sample of graduate students and job seekers. In this experiment, a video scenario is used. Eventually, the results will be analysed and the outcomes will be presented.
THEORETICAL BACKGROUND 1. Word-of-mouth and intentions to apply
When you are considering a job at an employer, you think about people in your personal network who work for that employer. You contact them and they share their experience with you regarding the employer. This is an example of word-of-mouth in a recruitment context, which is defined as “an interpersonal communication, independent of the organisation’s recruitment activities, about an organisation as an employer or about specific jobs” (Van Hoye & Lievens 2005: 180. By definition, the aim of the communication is not to persuade the job seeker to apply for a job opening, but just to share experiences or to help the job seeker in shaping realistic ideas about the employer (Matos & Rossi, 2008; Van Hoye, Weijters, Lievens & Stockman, 2016). Therefore, word-of-mouth can contain both favourable and unfavourable information about the employer (Van Hoye, 2013).
of word-of-mouth gives job seekers the feeling that they are enabled to make better job choices (Van Hoye & Lievens, 2005).
In marketing, unfavourable word-of-mouth is found to negatively affect consumers’ buying behaviour, while favourable word-of-mouth positively affects consumers’ buying behaviour (Bone, 1995; Laczniak, DeCarlo, & Ramaswami, 2001). These findings can be applied to a recruitment context, in which the situation of the job seeker can be compared to the situation of the consumer and buying behaviour can be compared to application decisions. This leads to the following hypothesis:
Hypothesis 1: the favourability of word-of-mouth about an employer as a place to
work positively influences job seekers’ intentions to apply for a job vacancy.
2. The mediating effect of organisational attractiveness in the relation between the favourability of word-of-mouth and the intention to apply
The relation between the favourability of word-of-mouth and intentions to apply for a job could be explained by the degree of organisational attractiveness, since we expect word-of-mouth to be related to organisational attractiveness and organisational attractiveness to relate to application intentions. Therefrom, we argue that organisational attractiveness serves as a mediator in the relation between the favourability of word-of-mouth and intentions to apply.
2.1 The impact of word-of-mouth on perceived organisational attractiveness
several authors found evidence that favourable word-of-mouth explains incremental variance in perceived organisational attractiveness held by job seekers (e.g. Collins and Stevens, 2002; Jaidi et al., 2011; Van Hoye, 2013; Van Hoye & Lievens 2005, 2007, 2009; Van Hoye et al., 2016). Word-of-mouth helps building an impression about an employer. How positive this impression is, determines to a large extent whether a job seeker feels attracted to an employer (Agrawal & Swaroop, 2009).
The high impact of word-of-mouth on these impressions job seekers hold towards an employer can be explained by applying the accessibility-diagnosticity model of Feldman & Lynch (1988) to a recruitment context (Herr, Kardes, & Kim, 1991). According to this model, the chance that information is used as input for forming an opinion depends on the accessibility and diagnosticity of that information (Feldman & Lynch, 1988).
Accessibility is high if information is easily retrieved from memory (Herr et al., 1991). Word-of-mouth makes information accessible and vivid, due to its personal and interactive nature (Herr et al., 1991; Van Hoye & Lievens, 2009). Since word-of-mouth is usually provided in a face-to-face setting, the job seeker is able to see the emotions of the sender (e.g. disappointment, enthusiasm). Therefore, the information is emotionally interesting. Furthermore, job seekers have the possibility to ask questions, and clarify on topics they want to learn more about. This makes the information more concrete. Also, since the information provided is often based on the senders’ own ideas and experience, it is imagery-provoking to the job seeker. In sum, word-of-mouth is more vivid than information received via formal channels, such as a recruitment advertising (Taylor & Wood, 1983). Research of Herr et al. (1991) found that vivid information provokes recipients’ thoughts and draws attention.
attractive or not (Van Hoye & Lievens, 2007). Due to its company-independent nature and the perceived expertise of the source, word-of-mouth is perceived to be reliable and a rich source of information. Therefore, word-of-mouth is an information source that is perceived as highly diagnostic and has therefore impact on the level of organisational attractiveness (Pornpitakpan, 2004).
While research on favourable word-of-mouth is consistent in showing a positive impact on organisational attractiveness (e.g. Collins and Stevens, 2002; Jaidi et al., 2011; Van Hoye and Lievens 2005, 2007, 2009), research on the impact of unfavourable word-of-mouth is scarce and not consistent in showing effect on organisational attractiveness. However, marketing literature shows that customers feel less attracted to products they have heard unfavourable stories about (e.g. Arndt, 1967; East, Hammond, & Lomax, 2008; Williams & Buttle, 2014). In addition, marketing literature states that attractiveness will be typically aligned with the directional valence of the information provided by word-of-mouth (i.e. favourable mouth leads to positive evaluations of products, unfavourable word-of-mouth leads to negative evaluations) (Baker, Donthu, & Kumar, 2016). This is in line with the accessibility-diagnositicy model, which argues that word-of-mouth is a powerful source in shaping attitudes towards the subject in question. Hence, we draw the following hypothesis regarding the relation between word-of-mouth and organisational attractiveness:
Hypothesis 2: the favourability of word-of-mouth has a positive impact on perceptions
of organisational attractiveness held by job seekers.
2.2 The impact of organisational attractiveness on intentions to apply
intention to apply for a job vacancy within that organisation (Carless, 2003). The importance of initial attitudes can be explained by making use of the Theory of Reasoned Action (TRA) (Fishbein & Ajzen, 1975). This theory states that the best predictor of performing behaviour is the intention to do so. Applying the TRA to job application decisions, job seeker’s intention to apply for a job vacancy is an immediate antecedent of the job seeker’s decision to apply (Van Hooft, Born, Taris, & Van der Flier, 2006). Therefore, it is important to study the factors that cause a job seeker to develop intentions to apply.
In addition, according to the TRA, an action is predicted by the subjective norm and the attitude toward the action (Fishbein & Ajzen, 1975). Attitude is defined as “the degree to which one has a positive versus a negative evaluation of the behaviour” (Albarracín et al., 2001: 143). Applied to a recruitment context, we expect job applications intentions to be formed based on the extent to which a person evaluates the employer as being attractive (Van Hooft et al., 2006). Hence, we draw the following hypothesis:
Hypothesis 3: perceived organisational attractiveness positively influences the
intention to apply.
Combining hypothesis 2 and 3, we propose a mediation effect of organisational attractiveness in the relation between the favourability of word-of-mouth and the intention to apply. Hence, we draw the following mediation hypothesis:
Hypothesis 4: the relation between word-of-mouth and the intention to apply is
3. The moderating effect of employer knowledge in the relation between word-of-mouth and organisational attractiveness
Even before job seekers start actively orientating themselves on the labour market and exploring their possibilities, they often have an impression about the organisation as a place to work (Lievens et al., 2005). These impressions are highly influential for the way in which new information (e.g. word-of-mouth) about an employer is received.
Cable and Turban (2001) developed the employer knowledge framework to study the way in which the beliefs of job seekers affect how they respond to organisations (Cable & Turban, 2001). Employer knowledge is defined as “a job seeker’s memories and associations regarding an organisation” (Cable & Turban, 2001: 123). Cable and Turban (2001) argued that employer knowledge consists of three dimensions: employer familiarity (i.e. awareness), employer reputation (i.e. affective evaluation) and employer image (i.e. attribute recall). We will explain these dimensions separately first. In the remainder of this study we consider these dimensions together as one level of employer knowledge.
Employer familiarity is defined as “the level of awareness that a job seeker has of an organisation” (Cable & Turban, 2001: 124). When an employer is familiar, job seekers can store information more easily in mind than when an employer is less familiar (Gatewood, Gowan & Lautenschlager, 1993). Job seekers are more motivated to pay attention to favourable employers and see them in a more favourable light than unfamiliar employers (Collins, 2007; Scott & White, 2016).
positive effect on one’s feelings of pride and prestige, since working for such employer leads to public recognition (Rindova, Williamson, Petkova, & Sever, 2001; Yu & Davis, 2017). As a result, an employer with a good reputation is perceived as more attractive.
Employer image is defined as “the set of beliefs that a job seeker holds about the attributes of an organisation” (Cable & Turban, 2001: 125). These beliefs contain objective aspects of the organisation such as its size and location, aspects of the specific job such as the type of work and subjective aspects such as the type of individuals that comprise the organisation. Image illustrates the potential benefit of being an employee of the organisation (Schreurs et al., 2010). The more important these benefits are to the job seekers, the more attractive the employer is to them.
As stressed before, research has not yielded consistent findings regarding the favourability of word-of-mouth. Findings are particularly inconsistent when it comes to the effect of unfavourable word-of-mouth (Van Hoye, 2013). Employer knowledge prior to receiving mouth could be a moderator for the impact of the favourability of word-of-mouth, as proposed by Van Hoye and Lievens (2009) and Van Hoye (2013). In marketing literature, brand knowledge is found to act as a buffer against the detrimental impact of unfavourable word-of-mouth. Word-of-mouth has a greater impact on product attractiveness for brands the consumer is unfamiliar with or has unfavourable impression about than for familiar and favourable brands (Laczniak, et al., 2001). In those cases, word-of-mouth is less useful in forming an opinion about the brand, since the consumer already has an impression about the favourability of the brand. This can be applied to a recruitment context. When a job seeker is familiar with an employer, believes it has a good reputation and holds a positive image about the employer, the job seeker may be less influenced by word-of-mouth about this employer compared to a situation in which the level of employer knowledge is low. In that case, word-of-mouth is of less value to form an impression.
In short, we expect that word-of-mouth will be less influential in forming perceptions when the job seeker has a sophisticated employer knowledge structure. When having a sophisticated employer knowledge structure, word-of-mouth will be less useful in forming opinions and hence it has less impact on organisational attractiveness (Cable & Turban, 2003; Herr et al., 1991; Threurer, et al., 2016). Based on the above-mentioned, we draw the following moderation hypothesis:
Hypothesis 5: When a job seeker has strong employer knowledge structures prior to
To integrate all factors, we draw a moderated mediation hypothesis to test our proposed conceptual model (figure 1).
Hypothesis 6: We expect the indirect effect of the favourability of word-of-mouth on
the intention to apply through perceptions of organisational attractiveness to be weaker when the job seeker has a high level of prior employer knowledge before receiving the word-of-mouth compared to when the job seeker has a low level of EK.
METHOD
Sample. Our sample consisted of students and people who are currently looking for a
job. This sample resembles the situation of job seekers, since job seekers are people who might consider applying for a job, but have not yet made the decision (Barber & Roehling, 1993; Wei et al., 2016). 283 respondents started the survey, but only 146 respondents managed to complete it. Thus, 146 participants were included in the analyses (101 women) with mean age of 22,13 years (SD = 2.36). Nearly all participants were students (93,2%) and the other respondents were looking for a full-time job (6,2%). Most respondents had (part-time) work experience (94,5%) and the respondents had on average applied 7,2 times for a job (SD = 5.34). Therefore, the task of evaluating organisational attractiveness and potential intentions to apply for a job was realistic and relevant for the participants.
Design and procedure. The experiment was conducted online. Respondents could
study, respondents had the chance to win one of eight prizes (e.g. gift vouchers of a well-known online shop, chocolate packages).
A 2 × 2 between-subjects factorial design was applied, with word-of-mouth (favourable vs. unfavourable) and employer knowledge (low vs. high) as experimental variables. In all scenarios, the subject of the information was a fictitious organisation that frequently hired graduates. Participants were randomly assigned to one of these four conditions. For a medium effect size with four groups at power .80 and α=.05, about 150 participants were needed (GPOWER; Erdfelder, Faul & Buchner, 1996).
In this study, it is assumed that job seekers hold some ideas about an employer (either low or high employer knowledge) and thereafter receive word-of-mouth about that employer. To resemble this real-life situation, respondents read the scenario about the employer first and after that saw the video with word-of-mouth. Before each information source was presented, participants were told to (a) process the information carefully, (b) imagine as if the company was real, (c) imagine as if they were currently looking for a job and (d) form an impression about the employer.
Materials. Firstly, information about the level of employer knowledge was presented,
thereafter respondents were exposed to word-of-mouth.
Employer knowledge. The study began with information about a fictitious
employer reputation with a very high ranking in the 2016 talent survey. Lastly, employer image was manipulated by for example stating that the organisation offered opportunities in a competitive, hierarchic and productive environment in the low employer knowledge scenario, while stating that the organisation offered opportunities in a creative, dynamic and friendly environment in the high employer knowledge scenario. This was based on the report of Universum (2016) that showed that Dutch students and starters on the labour market are looking for organisations with a creative, dynamic and friendly atmosphere.
All manipulations were based on items used in employer knowledge surveys designed by Cable and Turban (2003), Collins (2007) and Turban et al. (1998). In both scenarios, it was stated that the fictitious organisation was looking for graduates from all fields of studies, so that no participant was excluded from application. Word count and information (e.g. kind of organisation, products, etc.) were held constant in both scenarios.
Pilot study. The design of the materials regarding the employer knowledge scenarios
was evaluated in a pilot study among 23 respondents (13 women, 10 men; M age = 27 years), who were randomly assigned to one of the two scenarios regarding the fictitious organisation. Participants were asked to judge the employer familiarity, employer reputation and employer image of the fictitious company, as well as the clarity and realism of the written scenarios. Table 1 shows the means and standard deviations of the three employer knowledge categories per scenario. To analyse whether the levels of employer familiarity, employer reputation and employer image differed per employer knowledge scenario, we performed three independent samples t-tests. All these tests were significant (familiarity: t (21) = 2.73, p < .05; reputation:
t (21) = 3.89, p < .01; image: t (21) = 3.19, p < .01). The average levels of employer
Feedback of the respondents of the pilot study were incorporated in the scenarios used in the online experiment.
Table 1. Evaluation of Scenarios in Pilot Study
Low Employer Knowledge High Employer Knowledge
(n = 12) (n = 11) M SD M SD Employer Familiarity 3.35 1.26 4.89 1.56 Employer Reputation 3.65 1.49 5.70 .97 Employer Image 4.15 .69 5.29 .99 Note. N = 24.
All items were rated on a 7-point Likert scale ranging from 1 (very unlikely) to 7 (very likely)
Word-of-mouth. Word-of-mouth was operationalized as a casual conversation between
two persons about the fictitious employer. To resemble the personal and vivid nature of word-of-mouth while still remaining control over the content of the information source, the conversation was presented in video format (Van Hoye & Lievens, 2007). Research of Herr et al. (1991) showed that the measured impact of word-of-mouth in an experimental setting is stronger when the vivid nature of the word-of-mouth is captured in video format instead of a written anecdote.
word-of-mouth scenario it was stated that the atmosphere within the organisation was really good, that there was time for fun every now and then and that there were a lot of opportunities for career advancement.
Measures. For all dependent measures and manipulation checks we used a 7-point
Likert-type response scale ranging from 1 (strongly disagree) to 7 (strongly agree). All measures can be found in Appendix A.
Employer Knowledge manipulation check. All three categories of employer knowledge
were measured to assess the level of employer knowledge. Job seeker’s employer familiarity was measured with two items based on the study of Cable and Turban (2003), for example “I am familiar with the organisation” (α = .90), employer reputation with two items from Turban et al. (1998), for example “The organisation has a good public image” (α = .93) and employer image with three items derived from Collins (2007), for example “The organisation has good opportunities for career advancement” (α = .87). The internal consistency of employer knowledge as for the three categories together was .88.
Favourability word-of-mouth manipulation check. Three items were used to check the
manipulation of word-of-mouth, for example “The actor was very positive about the organisation” (α = .96).
Organisational attractiveness. The attitude towards the organisation was assessed with
five items from the study of Highhouse, Lievens and Sinar (2003), for example “For me, this organisation would be a good place to work” (α = .94).
Intentions to apply. The six-item application intentions measure is a combination of
questionnaires that were developed by Birgelen, Wetzels and Dolen (2008) and Wei et al. (2016) and include “If I saw a job opening for this organisation, I would apply for it”
RESULTS Manipulation checks.
Employer knowledge. To analyse whether the average level of employer knowledge
differed per scenario, we performed an independent samples t-test with the two scenarios and the employer knowledge items. The independent samples t-test was significant: t (144) = 14.73, p < .001. The average level of employer knowledge of respondents who read the high employer knowledge scenario (N = 68, M = 5.17, SD = 1.01) is significantly higher than the level of employer knowledge of the respondents who read the low employer knowledge scenario (N = 78, M = 2.80, SD = 0.92).
Word-of-mouth. To analyse whether the perceived favourability of word-of-mouth
differed for the two videos, we performed an independent samples t-test with the two videos
and the word-of-mouth items. The independent samples t-test was significant:
t (144) = -19.11, p < .01. The average level of perceived favourability for respondents who
saw the favourable word-of-mouth video (N = 80, M = 5.75, SD = 1.01) is significantly higher than for respondents who saw the unfavourable word-of-mouth video (N = 68, M = 2.69, SD = 0.92).
Descriptive statistics. Table 2 presents means, standard deviations and correlations
between variables included in this study. We discuss the most important correlations to this study.
Table 2. Means, Standard Deviations and Correlations Among Study Variables Variables M SD 1 2 3 4 5 6 7 8 9 1. Gendera .38 .93 - 2. Age 22.13 2.36 -.18* - 3. Education Levelb 3.95 0.98 .07 .34** - 4. Graduationc 4.15 1.73 .07 -.35** -.31** - 5. Number of Applications 7.18 5.34 .17* .22** .15 -.27** - 6. Employer Knowledged -.07 1.00 .12 -.09 .02 .12 -.03 - 7. Favourability WOMe .10 .10 .02 -.05 -.02 -.07 -.00 .05 - 8. Org. Attractiveness 3.93 1.58 -.07 -1.13 -.11 .10 -.06 .41** .55** - 9. Intentions to apply 3.88 1.39 -.21 -.17* -.13X .10 .03 .40** .45** .90** - Notes. N = 146
a-1 = men; 1 = women. b1 = high school; 2 = intermediate vocational education; 3 = university of applied sciences; 4 = university Bachelors degree; 5 = university Masters degree; 6 = university PhD. clooking for a job within: 1 = 1-3 months; 2
= 4-6 months; 3 = 6-12 months; 4 = 1-1.5 years; 5 = 1.5-2 years; 6 = >2 years. d-1 = low; 1 = high. e-1 = negative; 1 = positive.
**p < 0.01; *p < 0.05; Xp < .1, marginally significant
level and intentions to apply correlated marginally (r = -.13, p < .1). The higher the education level, the less likely the respondent had intentions to apply.
Control variables. Since age and education level correlate (marginally) significant
with intentions to apply, we controlled for age and education level in all analysis. We did this to exclude additional explanations related to these variables.
Hypotheses testing. To test our Hypothesis 1, which stated that the favourability of
word-of-mouth positively influences intentions to apply, we performed an independent samples t-test with word-of-mouth and intentions to apply. This independent-samples t-test was significant, t (144) = -6.11, p < .01. Supporting Hypothesis 1, the average intentions to apply for respondents who received favourable word-of-mouth (M = 4.45, SD = 1.41) is significantly higher than for respondents who received unfavourable word-of-mouth (M = 3.19, SD = 1.00).
To test the remainder of the hypothesized moderated mediation model, we performed a regression analysis through PROCESS for SPSS developed by Andrew F. Hayes (2013). To test the conceptual model, we used model 7 (Andrew F. Hayes, 2013) and 5000 bootstrap samples. For analysing the moderated mediation model, we used favourability of word-of-mouth as independent variable, organisational attractiveness as mediator, intentions to apply for a job vacancy as dependent variable and employer knowledge as a first step moderator. Results of these analyses can be found in Table 3.
Table 3. Moderated Mediation Analysis
Dependent Variable Organisational Attractiveness
ß T Ci […] Favourability WOMa .85** 8.73 [.66 ; 1.04] EKb .58** 5.94 [.39 ; .77] Favourability WOM * EK .23* 2.30 [.03 ; .42] Age -.02 -.35 [-.10 ; .07] Education Levelc -.17 -1.49 [-.37 ; .05]
Dependent Variable Intentions to Apply
ß T Ci […]
Organisational Attractiveness .81** 21.09 [.74 ; .89]
Favourability WOMa -.07 -1.21 [-.19 ; .05]
Age -.03 -1.20 [-.07 ; .02]
Education Levelc -.01 -.26 [-.12 ; .09]
Conditional Indirect Effects
ß Ci […]
Effect Moderation Low .50 [.28 ; .72]
Effect Moderation High .87 [.64 ; 1.11]
Note. N = 146, Ci = 95% confidence interval. ** p < .01 * p < .05
aWOM = word-of-mouth; -1 = negative, 1 = positive; bEK = employer knowledge; -1 = low; 1 = high; c. b1 = high school;
2 = intermediate vocational education; 3 = university of applied sciences; 4 = university Bachelor’s degree; 5 = university
Master’s degree; 6 = university PhD
Organisational attractiveness was higher when participants read the high employer knowledge scenario (M = 3.33, SD = 1.37) compared to the low employer knowledge scenario (M = 4.62,
SD = 1.53), ß = .58, t = 5.94, p < .01. The effect of word-of-mouth on organisational
Figure 2. This finding disconfirms Hypothesis 5, which predicted that word-of-mouth would have less impact when levels of employer knowledge were high.
Figure 2. Interaction Effect of Word-of-Mouth and Employer Knowledge on Organisational
Attractiveness
Furthermore, as predicted by Hypothesis 3, organisational attractiveness was related to intentions to apply for a job vacancy, ß = .81, t = 21.09, p < .01. This means that a higher level of organisational attractiveness increases application intentions. Consequently, and consistent with Hypothesis 4, the effect of word-of-mouth on intentions to apply was mediated by organisational attractiveness. The indirect effect of the favourability of word-of-mouth on intentions to apply through organisational attractiveness was stronger for participants who had high levels of employer knowledge (indirect effect = .87, 95% CI [.64 ; 1.11]), than for participants who had low levels of employer knowledge (indirect effect = .50, 95% CI [.28 ; .72]). Therefore, the moderation-mediation model was significant.
2 2,5 3 3,5 4 4,5 5 5,5 6
Negative WOM Positive WOM
DISCUSSION Findings
This research had set out to study the effect of employment related word-of-mouth on job seekers’ intentions to apply for a job and the role of prior employer knowledge.
We found that the favourability of word-of-mouth was positively related to intentions to apply for a job opening. When a job seeker receives favourable word-of-mouth about an employer, this job seeker shows more intentions to apply than when a job seeker receives unfavourable word-of-mouth. Furthermore, we found that this relation was mediated by organisational attractiveness. Favourable word-of-mouth leads to high levels of organisational attractiveness and in turn, high levels of organisational attractiveness lead to intentions to apply. Unfavourable word-of-mouth was neglected in previous literature. This study shows that unfavourable word-of-mouth leads to lower levels of organisational attractiveness and to lower intentions to apply.
word-of-mouth has more impact on the level of organisational attractiveness than when job seekers have low levels of employer knowledge. This finding disconfirmed our hypothesis that the favourability of word-of-mouth would have less impact on organisational attractiveness when job seekers had a sophisticated employer knowledge structure. We expected this because in the case of high prior employer knowledge, word-of-mouth would be less useful for job seekers in forming an opinion (Cable & Turban, 2003; Herr et al., 1991; Threurer, et al., 2016).
We propose an interpretation for these results in the remainder of the discussion.
Theoretical Implications
Second, organisational attractiveness is positively related to application intentions. Previous studies have already demonstrated the importance of organisational attractiveness for application intentions (Carless, 2003; Gomes & Neves 2011). So, our study corroborates the importance of organisational attractiveness. Organisational characteristics that cause job seekers to feel attracted to an organisation differ per individual, as research of Lievens et al (2001) showed that personality traits moderate the relation between organisational characteristics and organisational attractiveness. However, Biwas and Suar (2016) reviewed current literature on organisational attractiveness, and found that job seekers generally feel more attracted to organisations that (a) provide a realistic job preview, (b) show concern for the well-being of their employees, (c) provide outputs (e.g. pay, benefits, promotion, status, recognition) equal to the inputs of the employees (e.g. education, experience, effort, seniority), (d) have a prestigious image to reference groups that are important for the job seeker, (e) have a leader with a philosophy that appeals to the job seeker and (f) focus on their corporate social responsibility. Since our research emphasized the importance of organisational attractiveness, the factors that make an organisational attractive to job seekers show to be important for organisational survival and success.
2001). When the valence of the information is inconsistent with their impression, the receiver is likely to attribute the valence to the sender instead of the subject being talked about. Therefore, job seekers attribute unfavourable information about an organisation of which they have high employer knowledge towards the communicator instead of the organisation itself. Accordingly, the attractiveness of an employer is less impacted by unfavourable word-of-mouth when prior employer knowledge was high.
Our results could serve as an explanation for the differing outcomes in previous literature regarding word-of-mouth, and unfavourable content in particular. Prior employer knowledge structures influence the way word-of-mouth is processed and therefore influences the outcomes of word-of-mouth. In some studies, real company names are used. Some of these company names are familiar, have a good image and/or reputation to the participants of the study, while other company names are not. This might influence findings of these studies regarding the impact of word-of-mouth and explains for the differences between the outcomes of the studies.
If the impact of employer knowledge could be compared to the impact of brand knowledge, then recruitment researchers can gain insights from brand knowledge literature and from marketing activities known to affect that brand knowledge.
Managerial Implications
Findings of this study hold several implications for managers. First, organisational attractiveness is an important predictor for job seekers’ intentions to apply. Larger applicant pools have a positive impact on firm performance (Kashive & Khanna, 2017). Consequently, managers should find out what targeted job seekers find important and they should invest in activities that make the organisation more attractive to these job seekers. Only then the organisation can become an employer of choice.
increasingly motivated to collect information about employers. As a result, word-of-mouth becomes more influential for job seekers’ decisions.
In addition, word-of-mouth leads to a better quality of hire, which is good for organisational performance on the long term. Word-of-mouth is usually a source of realistic information about the job and the organisation (Van Hoye & Lievens, 2009). Several authors found that realistic information leads to lower turnover rates and better performance of the applicants hired (Bretz & Judge, 1998; Pane Haden, 2012). Hence, employment-related word-of-mouth is beneficial for organisations.
In most cases, word-of-mouth is provided by employees (Van Hoye & Lievens, 2009). Therefore, organisations should look for ways to stimulate employees to spread favourable word-of-mouth and to prevent them to spread unfavourable word-of-mouth. This is hard, since word-of-mouth is an information source that is per definition outside the direct control of the organisation (Bone, 1992). However, increasing job satisfaction seems an effective means, since Van Hoye (2013) found that satisfied employees spread more favourable and less unfavourable word-of-mouth.
Additionally, organisations should invest in a strong employer brand, as research shows that a strong employer brand increases employees’ willingness to recommend their employer to others (Edwards, 2010; Van Hoye, 2008). Employer branding was defined by Sengupta, Bamel and Singh (2015: 307) as “a targeted, long-term strategy to manage the awareness and perceptions of employees, potential employees, and related stakeholders with regards to a particular firm”.
choice, organisations should invest in the development of a strong employer brand. This can be done by for example investing in sponsorships (e.g. sponsoring events job seekers attend) or advertising (e.g. campus recruitment advertisements) (Collins & Stevens, 2002).
Strengths, limitations and future research directions
This study knows several strengths, as well as limitations. One important strength is that this study presented word-of-mouth in a video format instead of a written scenario. This format allows for maintaining the vivid nature that causes real-life word-of-mouth to be highly influential. In addition, we had control over the content participants were exposed to since we used a controlled experiment. However, the use of an online experiment knows several limitations.
A strength of this research is that only job seekers and students, who resemble the situation of job seekers, could participate in the experiment. For that reason, outcomes of this experiment are representative for the situation of job seekers. However, majority of the participants was student and part of generation Y. This is a limitation of our study, since research of Reis and Braga (2016) shows that employer attractiveness factors differ per generation. Li, Liu and Wan (2008) report comparable findings and show a significant impact of age, education, position and gender on work values. In future research, the impact of demographic characteristics on the impact of word-of-mouth and employer knowledge should be further explored.
Our study revealed an extremely high level of correlation between organisational attractiveness and intentions to apply. This finding might reveal that mean two variables tested the same construct. This is a limitation of this study, since we intended to predict actual application behaviours. Intentions to apply are not the same as the actual behaviour of applying for a job. Therefore, future research should make use of research methods that allow for examining real application decisions, rather than intentions to do so.
There are several interesting directions for future research on word-of-mouth and employer knowledge.
First, since we found that unfavourable word-of-mouth has the potential to harm the organisation and its attractiveness to job seekers, it might be fruitful for future research to pay attention to unfavourable word-of-mouth in a recruitment context. It could be interesting to investigate who the senders of unfavourable word-of-mouth about an employer are and what motivates them to spread this unfavourable word-of-mouth. Also, future research could investigate how spreading unfavourable word-of-mouth could be discouraged.
It is interesting to study what role each of these elements play and how they interact with word-of-mouth. Especially the role of employer image is interesting to study, since employer image highly depends on the individual preferences of job seekers. Image consists out of several factors, such as salary, location, corporate culture and advancement opportunities (Collins & Stevens, 2002). The impact of these factors on the effect word-of-mouth and organisational attractiveness, together with their individual characteristics, should be further explored.
To conclude, on a practical level we strongly suggest future research to explore the role of employer branding. It is important for organisations to know what role employer branding activities play in shaping employer knowledge structures and how these activities relate to the impact on word-of-mouth.
Conclusion
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APPENDIX A: MEASURES
Manipulation Checks
Employer Familiarity (Cable & Turban, 2003) 1. I am familiar with the organisation
2. I recognize the organisation among other employers Employer Reputation (Turban et al., 1998)
1. The organisation has a good public image
2. The organisation has an excellent reputation on campus Employer Image (Collins, 2007)
1. A job at the organisation has above-average pay
2. The organisation has good opportunities for career advancement
3. The organisation provides jobs with good prospects for work-life balance Word-of-mouth
1. I know (one of) these actors very well (= check for tie strength)
2. Henk Jan (the sender) is very positive about the organisation
3. Henk Jan (the sender) thinks the organisation is a good employer to work for 4. The brother of Henk Jan likes to work for the organisation
Organisational attractiveness (Highhouse, Lievens & Sinar, 2003)
1. For me, the organisation would be a good place to work 2. The organisation is attractive to me as a place for employment 3. I am interested in learning more about the organisation
4. A job at the organisation is very appealing to me
Intentions to apply (Birgelen, Wetzels, & Dolen, 2008; Wei et al. (2016)
1. If I saw an opening for the organisation, I would apply for it
2. I would make the organisation one of my first choices as an employer 3. If the organisation invited me for a job interview, I would go
