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http://bas.sagepub.com/ Exploringthe Relationship Between Corporate Social Performance and Employer Attractiveness
Kristin B. Backhaus, Brett A. Stone and Karl Heiner Business Society 2002 41: 292 DOI: 10.1177/0007650302041003003 The online version of this article can be found at: http://bas.sagepub.com/content/41/3/292

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Backhaus et al. / CSP AND EMPLOYER ATTRACTIVENESS BUSINESS & SOCIETY / September 2002

Exploring the Relationship Between Corporate Social Performance and Employer Attractiveness
KRISTIN B. BACKHAUS BRETT A. STONE KARL HEINER
State University of New York at New Paltz

Building on existing studies suggesting that corporate social performance (CSP) is important in the job choice process, the authors investigate job seekers perceptions of importance of CSP and explore effects of CSP dimensions on organizational attractiveness. Job seekers consider CSP important to assessment of firms and rate five specific CSP dimensions (environment, community relations, employee relations, diversity, and product issues) as more important than six other CSP dimensions. Using signaling theory and social identity theory, the authors hypothesize differences in effects of CSP data on ratings of employer attractiveness and find that environment, community relations, and diversity dimensions have the largest affect on attractiveness ratings.

The demographics of our workforce are changing, highlighted by the exit of the baby boom generation and the entrance of Generation Y workers. The evolving needs and values of todays workers make employee recruitment more challenging. How-to articles about recruiting and attracting new employees abound in the popular business press, but scholars are challenged to explain clearly the science of organizational attraction. What makes an organization attractive to a potential applicant? One stream of research suggests that job seekers prefer organizations with whom they perceive congruence between their and the organizations primary values (Cable & Judge, 1994; Chatman, 1989, 1991; Judge & Bretz, 1992; Judge & Cable, 1997; Schneider, 1987). In the job search process, individuals tend to be more attracted to organizations with which they perceive a match (Judge & Bretz, 1992).
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A second stream of research focuses on attributes of the organization. Studies suggest that organization structure (Turban & Keon, 1993) and reward systems (Bretz, Ash, & Dreher, 1989) influence initial organizational attraction. Organization image has also been shown to influence the firms ability to attract applicants (Belt & Paolillo, 1982; Gatewood, Gowan, & Lautenschlager, 1993; Rynes, 1991; Tom, 1971). By organizational image, we refer to the general impressions held by those outside the organization (Barber, 1998). Tom (1971) described image as the collection of knowledge, beliefs, and feelings about an organization. Image may derive from snippets of information or from in-depth involvement with the organization. Image resides at the level of perception and can change over time. Organizational image has been shown to influence early job choice decisions (Fombrun & Shanley, 1990). Gatewood and colleagues (1993) found image to be related to familiarity with the firm and personal interaction with it. Because image is constructed from a broad range of impressions created by various organizational activities, the firms corporate social performance helps to inform perceptions of image (Greening & Turban, 2000). Corporate social performance (CSP) has been defined as a business organizations configuration of principles of social responsibility, processes of social responsiveness and policies, programs, and observable outcomes as they relate to the firms societal relationships (Wood, 1991, p. 693). CSP is a multidimensional construct, encompassing organizational activities related to treatment of employees, the natural environment, workplace diversity, customers, product, and other issues (Berman, Wicks, Kotha, & Jones, 1999). Research suggests that a firms corporate social performance may influence perceptions of organizational attractiveness (Greening & Turban, 2000; Turban & Greening, 1997). Our study aims to add to this literature by investigating job seekers perceptions of the importance of CSP and exploring the differential effects of CSP dimensions on organizational attractiveness. This study adds to previous research in a few key respects. First, we examine both the attitudes of job seekers toward CSP and the way in which CSP information affects job seekers as they evaluate the attractiveness of employers. Second, of 11 CSP dimensions typically considered under the rubric of CSP, most research focuses on only 5 (employee relations, the natural environment, product quality, treatment of women and minorities, and community relations). Although these 5 dimensions are the ones most commonly used in CSP research, no empirical evidence has been presented to support the inclusion of these 5 dimensions over any others. Given the growing list of CSP areas of concern in our society today (Stone, 2001), it is becoming increasingly important to demonstrate empirically that these particular

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CSP dimensions are considered most important to job seekers. Third, previous research results (Greening & Turban, 2000; Turban & Greening, 1997) support the notion that there is a relationship between CSP and organizational attractiveness, but still we cannot discern the degree to which variations in levels of corporate social performance across various CSP areas will affect this relationship. We address this issue. Finally, we explore patterns of effects of combinations of CSP ratings on organizational attractiveness.

CONCEPTUAL FRAMEWORK AND HYPOTHESES

Corporate Social Performance

Corporate Social Performance (CSP) has become an important issue to the public, even to the extent that it influences financial investments. Investment in socially and environmentally responsible firms increased 82% in 2 years, whereas investment in the broad market was up only 42% (Social Investment Forum, 1999). In addition, considerable scrutiny has been placed on the role of business in society over the past 10 years (Harrison & Freeman, 1999). Marketing research suggests that consumers are paying attention to the CSP records of the companies from whom they are making purchases (Gildea, 1994; Maignan, Ferrell, & Hult, 1999; Owen & Scherer, 1993; Paul, Zalka, Downes, Perry, & Friday, 1997). A recent survey revealed that 88% of consumers are more likely to buy from a company that is considered socially responsible (Smith, 1996). Most CSP research has been conducted to measure the relationship between financial performance and social performance. Although these studies have been largely inconclusive, there have been positive links found between the two (Cochran & Wood, 1984; Coffey & Fryxell, 1991; McGuire, Sundgren, & Schneeweis, 1988; Waddock & Graves, 1994; Wokutch & Spencer, 1987), but others have revealed unclear or negative links (Alexander & Buchholz, 1982; Aupperle, Carroll, & Hatfield, 1985; Cochran & Wood, 1984; Coffey & Fryxell, 1991; McGuire et al., 1988; Shane & Spicer, 1983). However, in the process of exploring the financial implications of CSP, researchers have uncovered other important aspects of CSP. Waddock and Graves (1997) found that good CSP contributes to improved financial performance. From this, they developed the good management theory, suggesting that good management of relationships with various stakeholders results in stronger corporate performance (Waddock & Graves, 1997).

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Stakeholder theory provides the underpinning for the good management theory and also provides conceptual support for the study reported here. Stakeholder theory posits that companies have a responsibility to those who have vested interests in firm performance and those who are directly affected by the firms actions (Evan & Freeman, 1983; Freeman, 1984). Stakeholder theory provides a logical explanation for why CSP matters. Treating stakeholders well, making decisions that affect employees, communities, and the environment positively leads to positive outcomes. Indeed, studies support the notion that effective management of key stakeholder relationships has positive financial implications for organizations (cf. Berman et al., 1999). Stakeholder theory suggests that organizations must be responsive to the competing demands of those who hold a stake in the organization. Employees are among the important stakeholders identified in CSP research. Effective management of the relationship with employees was found to affect firm financial performance (Berman et al., 1999). Mitchell, Agle, and Wood (1997) suggested that employees have sufficient power, legitimacy, and urgency to become salient stakeholders to top management. As Greening and Turban (2000) argued, prospective employees may also have this power, legitimacy, and urgency, especially when jobs are plentiful. Moreover, based on stakeholder theory and public interest in CSP, there is reason to argue that CSP may be an important tool in attracting employees.
Signaling Theory

In his seminal work on recruitment and selection, Wanous (1992) pointed out that job seekers require complete and accurate organizational information to match their needs properly with organizational offerings. However, job seekers usually have limited information about organizations and must use bits and pieces of data to construct a view of what it would be like to work for an organization (Barber, 1998). Organizational characteristics have been shown to be indicative of personnel practices (Jackson, Schuler, & Rivero, 1989), and job seekers tend to use these characteristics as clues. This use of organizational attributes as predictors of working conditions is captured under the rubric of signaling theory. Signaling theory suggests that individuals use various clues, dropped by the firm, to draw conclusions about the firms intentions or actions (Srivastava & Lurie, 2001). In the organizational choice process, prospective employees use any available information to improve their efforts to make a rational decision (Wanous, 1992). Information about certain CSP dimensions may

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provide the data a job seeker needs to assess the appropriateness of the employer.
Social Identity Theory

Social identity theory suggests that individuals derive their self-concept in part from their membership in certain social groups (Tajfel, 1982). In other words, we define our identity in terms of our group membership, and enhance our self-esteem by comparing our group to lesser quality groups (Stets & Burke, 2000). The successes and reputation of our group contribute to our self-concept (Underwood, Bond, & Baer, 2001). Our employer is an important source of self-concept (Tajfel, 1982). We enjoy the benefits of our employers positive reputation but also suffer detrimental effects of our firms negative reputation (Dutton, Dukerich, & Harquail, 1994). This provides another foundation on which to argue that a firms CSP will be important to job seekers as a way of selecting a self-enhancing employment setting.
Organizational Attraction

Although the study of organizational attraction has revealed some insights, there remains much to be learned (Barber, 1998). One stream of extant research investigates organizational characteristics and their effects on attraction to the organization. Structural attributes, such as decentralized decision making (Turban & Keon, 1993) and reward systems (Bretz et al., 1989), are shown to influence perceptions of attractiveness. Gatewood and associates (1993) examined corporate image, another organizational characteristic, finding that perception of an organizations image is a significant predictor of decisions to pursue employment with that company. Specifically in the area of CSP, Bauer and Aiman-Smith (1996) find that individuals are attracted to employers with a proenvironmental stance, whereas Wright and associates (Wright, Ferris, Hiller, & Kroll, 1995) concluded that organizations with positive affirmative action programs are more successful in attracting high-quality applicants. Turban and Greenings (1997) study found a positive relationship between published ratings of firms CSP and participants ratings of firms attractiveness. Because they find a correlation between CSP and attractiveness, the study concluded that organizational attractiveness perceptions may be influenced by CSP. Greening and Turbans (2000) study expanded on their previous study, measuring the relationship between CSP and attractiveness more directly by supplying CSP data to participants and testing the

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effects of that information on their perceptions. Again, they found a positive relationship between CSP ratings and attractiveness ratings. Albinger and Freeman (2000) also found that CSP influences attractiveness ratings but only for those job seekers with high levels of job choice. Thus, previous research suggests that attractiveness and CSP are related. Furthermore, signaling theory and social identity theory suggest that CSP may inform the applicants job choice process. On that basis, we begin our two-phase study by determining the extent to which our sample considered CSP relevant in the job search process.
Hypothesis 1: Job seekers rate CSP as an important organizational attribute when considering prospective employers. Dimensions of CSP

Methodological problems have made the study of CSP difficult (Waddock & Graves, 1997). The primary problem relates to the multidimensionality of CSP. Various measures have been used as proxies for CSP, but the variation among them has led to difficulty in generalizing findings or even drawing practical conclusions from studies. Many of these problems have been addressed effectively by the use of data from Kinder, Lydenberg, and Domini (cf. Graves & Waddock, 1994.) Kinder, Lydenberg, Domini (KLD) ratings measure social performance of major corporations, assessing firms in 11 (previously 8) categories of CSP, which include community, diversity, employees, product, (ecological) environment, non-U.S. operations, nuclear power, involvement in alcohol, gambling, tobacco, and military contracting, as well as an other category (Waddock & Graves, 1997). Of these 11 dimensions, 5 (environment, community relations, diversity, product issues, employee relations) have become widely used in management research on CSP (Berman et al., 1999; Greening & Turban, 2000; Johnson & Greening, 1999; Turban & Greening, 1997). These 5 dimensions have proved to be most relevant to research related to stakeholder impressions of CSP (Berman et al., 1999; Waddock & Graves, 1997) and have been the most studied of 11 dimensions in the academic literature. However, with regard to recruitment, no empirical evidence has been compiled to indicate that these 5 dimensions are the most relevant to job seekers. In addition to the weight of evidence presented in other stakeholder/CSP studies, we suggest that signaling theory and social identity theory support the importance of these 5 dimensions. First, as previously indicated, signaling theory suggests that job seekers look for clues to indicate what it would be like to work for a company.

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The concept of issue intensity, a term borrowed from ethical decisionmaking theory (Jones, 1991), suggests that the greater the importance of an issue to the decision maker, the more salient that issue becomes to the decision process. Therefore, we reason that important issues about the workplace that have direct personal impact on the individual will carry greater issue intensity than those that have a less direct, less personal impact. For that reason, employee relations and management of diversity, having a greater daily effect on the worker, would signal more salient messages about life in the firm than other, more distant dimensions. Albinger and Freemans (2000) work on CSP dimensions supported this suggestion. Their study revealed that firms support for diversity and employee relations was related to positive perceptions of the firm as an employer. Second, social identity theory supports the importance of treatment of the environment, the community, and product issues to the job seeker. Workers derive a sense of self-identity and self-esteem from their association with their employer (Crocker & Luhtanen, 1990). Furthermore, Dutton and colleagues (1991) study of the Port Authority of New York and New Jersey revealed that individual employees were personally affected by the negative image of their employer with regard to a particular issue, namely, the treatment of the homeless community. The poor image of the organization was transferred to the individual organization members (Dutton et al., 1991). This work suggests that behaviors of the firm that are visible to the public affect self-identity of the worker. Thus, we assert that they would prefer to be associated with firms that contribute positively to the environment and the community and produce quality goods. Based on this, we propose:
Hypothesis 2: Job seekers consider the CSP dimensions of environment, community relations, diversity, product issues, and employee relations more important than the other dimensions, which include non-U.S. operations, alcohol, tobacco, gambling, military contracting, and nuclear power.

Having argued that CSP is important to job seekers, and also having proposed that certain aspects of CSP are more important than others, we now turn to the area of individual differences. The following hypotheses propose that certain aspects of CSP are more important to some groups of job seekers than to others. Studies indicate that women and minorities place greater value on organizational diversity efforts than do White men (Kossek & Zonia, 1993; Thomas & Wise, 1999; Williams & Bauer, 1994). Furthermore, Greening and Turban (2000) revealed that gender moderates the relationship between treatment of women and minorities and organizational

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attraction under certain circumstances. On this basis, we hypothesize that female and minority job seekers may use data about organizational treatment of women and minorities as a signal of potential working conditions for themselves. A poor record of treatment of minority or female employees may discourage such candidates from going forward to apply or accept a position. Thus, we propose the following:
Hypothesis 3: Female job seekers will rate the dimension of diversity as more important than male job seekers. Hypothesis 4: Minority job seekers will rate the dimension of diversity as more important than nonminority job seekers. Knowledge of CSP

As we have discussed, we believe that CSP may be an important element in recruitment. In terms of attracting potential employees, it is important for organizations to convey specific information (Barber, 1998) as well as information that is personally relevant to the job seeker (Chaiken & Stangor, 1987). For example, studies show that decentralized organization structure, allowing participative decision making, has a positive effect on applicant attraction (Turban & Keon, 1993). Reward structure has been shown to signal career growth opportunities and impact attraction (Thompson, 1967). Similarly, there has been increasing focus on organizational image and its effects on applicant attraction. The concept of employer branding suggests that firms must create a desirable employment image and convey that to prospective candidates (Engaging Employees Through Your Brand, 2001). Organizational values are an integral part of the employment image, as they convey signals to candidates indicating what it will be like to work for the company. Second, organizational values and behaviors create an organizational identity, and that identity is central to the individuals identity formation after they join the organization (Hatch & Schultz, 1997). CSP, which is a value-based construct, communicates a wealth of information to the job seeker about the organization, and that information can be used in the job-choice process. Thus, we argue that knowledge of CSP has an affect on job choice.
Hypothesis 5: Firms CSP ratings will influence job seekers assessment of employer attractiveness.

CSP can be conceptualized as a singular attribute, as we did for Hypothesis 5, or could be seen as multiple attributes. Waddock and Graves

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(1997) suggested that we can understand CSPs functions better when we examine them on a dimension-by-dimension basis. In our next set of hypotheses, we build on previous findings indicating that employee relations, product quality, concern for the natural environment, and treatment of women and minorities appear to be more important than community relations (Greening & Turban, 2000). We begin with this hypothesis and continue with more specific propositions.
Hypothesis 6: Individual dimensions of CSP will have differential effects on job seekers assessment of employer attractiveness.

Of the five dimensions under consideration, employee relations hits closest to home when it comes to effects on workers. Job seekers, especially college students, demonstrate concern for growth opportunities, part of the employee relations dimension (Jeffords, Scheidt, & Thibadoux, 2000). A companys positive or negative record in terms of treatment of employees sends a clear signal to potential employees about the desirability of that employer (Albinger & Freeman, 2000). Therefore, we hypothesize the following:
Hypothesis 7: Employee relations will be most influential of the five dimensions on assessment of employer attractiveness.

Product issues, although seemingly less central to an employees life, has been shown to be important to prospective employees. In a study of the fast-food industry, Highhouse, Zickar, Thorsteinson, Stierwalt, & Slaugher (1999) found that product image was one of the most important indicators of employer image. Social identity theory suggests that an individual would derive a more positive sense of self-identity from association with high-quality or prestigious products. Generalizing from this, we hypothesize that product issues will be the second most influential of the five dimensions, after employee relations.
Hypothesis 8: Product issues will rank second among the dimensions in its effect on assessments of employer attractiveness.

METHOD
Procedure

This was a two-part study. In Part 1, data were collected from 297 undergraduate business students as an in-class exercise. The survey was

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administered in upper-division accounting and management courses. Discussion of CSP was not part of the curriculum of these classes. Almost all students (93%) indicated that they were involved in a job search or were beginning to gather information about employers. Most respondents were juniors/seniors (86%), with a median age of 21. Of respondents, 50% reported their ethnicity as White, 37% as minority, and 13% declined to respond to the ethnicity item, and 52% were female. Participants completed a questionnaire that first asked them to indicate the importance of CSP in their job choice process. They reported the importance of CSP at four points in the job-choice process, when considering the attractiveness of a firm as a potential employer in general; when determining positions for which to submit a rsum; when considering whether to interview with a company; and when considering whether to accept a job offer. Participants rated each of these using a 5-point Likerttype scale, from 5 (very important to 1 (unimportant) (Cable & Judge, 1996). We were interested in determining the stages at which job seekers consider CSP and also wanted to determine an overall score indicating their general concern for CSP, which would be called importance of CSP. The second section of the questionnaire asked them about the relative importance of 11 dimensions of CSP. Participants were provided with definitions of each of the dimensions of CSP, drawn from the KLD definitions to ensure that each student was rating the same construct. Again, participants used the same 5-point Likert-type scale. This phase of the study was completed 2 months prior to beginning the next phase of the study. Part 2 of the study examined the effects of CSP knowledge on attractiveness ratings of firms. The same sample was used for this stage. We used a quasi-experimental design, in which participants were first asked to rate the attractiveness of an organization using only what they already knew about the company. After 2 weeks, students were presented with the same list of companies but were provided with CSP data about each organization and were told to add this information to what they already knew about the company and rate its attractiveness. The data described the firms records in 5 areas of CSPenvironment, community relations, diversity, product issues, and employee relations. We selected these 5 areas based on previous studies (Berman et al., 1999; Waddock & Graves, 1997) and from our findings from our Part 1, which supported the hypothesis that these 5 areas are the more important elements of a group of 11 dimensions. In both parts of the experiment, participants used a 6-point Likert-type scale, ranging from 5 (very good) to 1 (very poor) to 0 (cannot judge). We used policy capturing (Slovic & Lichtenstein, 1971) to examine the extent to which each CSP dimension affected the participants perception

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of the organization. This technique has been frequently used to examine individual differences in decision processes (Cable & Judge, 1994; Graves & Karren, 1992; Klaas & Wheeler, 1990). Using this method, we can systematically vary the CSP conditions to produce a large set of combinations. Because we were using five dimensions of CSP and we provided three conditions for each dimension, there were a possible 243 combinations. We asked participants to make judgments on 50 of these possible combinations. The 50 profiles were randomly selected from the complete set. To test for bias in the questionnaire design, we conducted a test-retest. A control group of 80 students, members of another section of an upperdivision business course completed questionnaire one, which asked them to rate the attractiveness of the same organizations, using the same scale as the experimental group. Two weeks later, the students filled out the questionnaire again but did not receive any additional information. In the retest, part of the group received a questionnaire that listed the firms in a different order to test for order effects. The overall multivariate tests of significance are not statistically significant, indicating that there is no significant difference between pretest and posttest responses when no new information is presented (F = 1.47, p = .26). Furthermore, it also eliminates the question of order effects within the questionnaire.
Measures

CSP data. For each organization they were asked to assess, participants received ratings for each of the five CSP dimensions. As we indicated, we used the KLD dimensions and definitions to follow mainstream CSP research, but for methodological reasons, we modified their rating scale. KLD assigns a value on a 5-step rating scale running from 2 (major weakness) to +2 (major strength) for each dimension. Because we believed that the distinctions between points on a 5-point scale would be difficult for a participant to interpret, we broadened the scale to three points (1 = poor performance, 2 = neutral performance, and 3 = good performance). This simplified the construction of the combinations and reduced the effect of bias in respondent interpretation. Furthermore, in contrast to Greening and Turban (2000), we chose to use numerical rather than verbal descriptions to avoid semantic biases that may be introduced with narratives. The sample of 50 organizations was drawn from the Fortune 500 using the following two criteria: the organization had to be generally familiar to the researchers and the group of 50 had to represent a broad range of

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industries. The companies were listed on the survey instrument in alphabetical order. Control variables. Gender and student status were also measured, as these have been used as control variables in previous studies (Greening & Turban, 2000). We included these variables in our analysis of the pretest and posttest data in Part 2 of the study.

RESULTS
Importance of CSP

In Part 1 of the study, we determined that a mean response that fell statistically significantly above the midpoint of the scale, which is labeled important, would indicate support for the hypothesis. To test this hypothesis, we conducted one-sample t tests, using 3.5 as a test value. Although all four items garnered a mean response of 3.5 or greater, Item 1 (when considering attractiveness in general), and Item 4 (when considering whether to accept a job offer) were significantly above 3.5. Item 1 had a mean of 3.66 (t = 2.53, df = 293, p = .012), and Item 4 had a mean of 3.82 (t = 4.9, df = 291, p = .00). We also assessed the importance of CSP in the job-search process by creating a composite score, which is the sum of the four items, importance of CSP in general, when determining positions for which to submit a rsum, when considering whether to interview, and when considering whether to accept a job offer. This new item called importance of CSP, has a strong scale reliability of Cronbachs alpha = .86. The high correlation among the four items suggests that they are tapping a single jobsearch criteria, thus we combined them into a single measure. Importance of CSP had a mean response of 14.59 (SD = 3.62), which was significantly higher than the midpoint of the scale, again signifying a level of importance that exceeds important (t = 2.776, df = 291, p = .006). Thus, Hypothesis 1 is supported (see Table 1). Hypothesis 2 proposes that job seekers consider the CSP dimensions of environment, community relations, diversity, product issues, and employee relations more important than other commonly used dimensions of CSP when assessing employer attractiveness. Our findings indicate support for this hypothesis. Analysis of variance revealed that the means of the 11 dimensions differed significantly (F = 84.05, p <.000). The 5 dimensions named in the hypothesis are indeed the 5 top-rated dimensions. Post hoc analysis confirms that these 5 dimensions are

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Table 1 Correlations and Descriptive Statistics Item

1. General 2. Rsum 3. Interview 4. Job offer 5. Overall 6. Age 7. Gender (1 = male) 8. Ethnicity (1 = nonminority) 9. Employee relations 10.Product issues 11. Environment 12. Diversity 13. Community relations 14. Non-U.S. operations 15. Nuclear power 16. Tobacco 17. Gambling 18. Alcohol 19. Military

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M
3.66 3.60 3.50 3.82 14.59 22.59 1.54 1.57 4.49 3.84 3.82 3.81 3.73 3.18 2.90 2.71 2.63 2.48 2.35

SD
1.08 1.06 1.05 1.10 3.62 5.10 .50 .50 .70 .95 1.04 1.30 1.05 1.19 1.56 1.63 1.62 1.59 1.47

10

11

12

13

14

15

16

17

18

.64** .54** .75** .62** .57** .55** .83** .88** .84** .82** .01 .06 .03 .06 .04 .16** .15** .21** .19** .21** .13* .10* .05 .08 .11 .28** .32** .27** .31** .34** .37** .37** .44** .44** .48** .35** .38** .38** .31** .43** .35** .33** .36** .31** .40** .37** .40** .42** .34** .46** .37** .37** .29** .32** .40** .16** .28** .20** .15** .22** .22** .28** .29** .18** .29** .23** .28** .31** .15** .29** .25** .32** .31** .19** .32** .11** .27** .31** .11** .21**

.09 .13* .06 .04 .12 .02 .05 .05 .11 .01 .01 .02 .07 .00 .14* .24** .15** .23** .15* .22** .25** .19** .17** .21** .09

.04 .04 .07 .32** .25** .09 .00 .09 .23** .20 .08

.40** .26** .26** .30** .28** .10 .05 .11 .03 .10

.30** .34** .47** .49** .35** .32** .35** .31** .32**

.24** .55** .29** .18** .20** .24** .23** .24**

.44** .49** .17** .22** .29** .28** .18**

.34** .16** .22** .30** .30** .25**

.28** .25** .30** .29** .23**

.46** .46** .68** .36** .69** .70** .59** .42** .52** .44**

*p < .05. **p < .01.

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Table 2 CSP Dimensions and p values for Tests of Differences between Mean Ratings Dimension M SD 1 2 3 4 5 6 7 8 9 10 11

1. Employee relations4.49 2. Product issues 3.84 3. Environment 3.82 4. Diversity 3.81 5. Community relations 3.73 6. Non-U.S. operations 3.18 7. Nuclear power 2.90 8. Tobacco 2.71 9. Gambling 2.63 10. Alcohol 2.48 11. Military 2.35

.70 .95 .00 1.04 .00 .73 1.30 .00 .63 .87 1.05 .00 .06 .086 .22 1.19 1.56 1.63 1.62 1.59 1.47 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00 .00

.00 .00 .00 .00 .00

.06 .00 .26 .00 .00 .03 .00 .00 .00 .22

Note: Within-groups df = 3,187; F = 84.05; p < .000. Values on the diagonals are p values for t tests between mean ratings of each dimension. Table 3 ANOVA, Diversity Dimension by Sex and Ethnicity Description Minority Nonminority Male Female Minority males Nonminority males Minority females Nonminority females **p < .00. M 4.27 3.46 3.50 4.10 4.15 3.02 4.37 3.84 SD .95 1.38 1.39 1.12 .95 1.45 .95 1.21 df 255 266 117 137 F 27.88 14.89 23.35 8.06 Significance .00** .00** .00** .00**

significantly higher than the other 6 dimensions. Table 2 indicates the results of t tests among each of the dimensions, demonstrating the differences among the means. Hypothesis 2 is supported. Hypotheses 3 and 4 predict that women and minorities place more importance on the diversity dimension than men or nonminorities. Women gave significantly higher ratings to diversity than men, thus supporting Hypothesis 3. Similarly, minority participants rated diversity significantly higher than nonminorities did. Hypothesis 4 is supported (see Table 3).

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Effects of Knowledge of CSP

In Part 1, we confirmed previous findings suggesting that CSP is important to job seekers. Now we move to the effect of knowledge of CSP records on assessments of organizational attractiveness. This portion of the study yielded 110 usable, matched pretest and posttest surveys. To analyze our data, we fit a mixed-effects linear model (Laird & Ware, 1982; Pinheiro & Bates, 2000). The model is fixed because we are concerned with inferences about the specific means in the study (the company ratings), and random, as we are also concerned about the means of the ratings for a random sample of students (Dielman, 1996). We use the mixed effects to account for the covariance structure introduced by the repeated measurements (the pre-post test design). The results are displayed in Table 4, the analysis of variance table, and in Table 5, attractiveness ratings at Times 1 and 2. In addressing the next set of hypotheses, we first classified each participant in the experiment by two between-participant factors, the participants gender and the participants student status (freshmen/sophomore or junior/senior), to identify any differences related to these characteristics. In our analysis, we would expect to find differences on between-participant factors, if any exist, because of the reasonably large number of participants. In spite of the large number of denominator degrees of freedom, neither of the between-participant factors, gender, nor student status had significantly different levels, which indicates that these personal characteristics had little effect on the ratings of the corporations at either Time 1 or Time 2. Within-participant differences are almost surely to be judged significant because of the extremely large number of pre-post correlated pairwise comparisons. Because each test of within-participant differences has 8,730 denominator degrees of freedom, we needed to examine the magnitude of the estimates of these effects to shed light on these two hypotheses. We assume that the effects of knowledge of CSP dimensions would become evident in the time-dimension interactions (Time 1 is pretest, Time 2 is posttest); for example, we should recognize the effect of a timeenvironment or a time-community relations interaction. Due to the extremely large number of denominator degrees of freedom associated with the within-participant main effects, all effects are judged to be significantly different from zero, but the only main effect with meaningful magnitude is time. As participants were told of the CSP records of each company, their rather favorable opinions based on name recognition declined on the average of 1.67 points on the 6-point scale. This finding supports Hypothesis 5, that knowledge of firms CSP records will

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Table 4 Analysis of Variance Table, Effects of Corporate Social Performance Knowledge Numerator Denominator df df 1 1 1 1 2 2 2 2 2 2 2 2 2 2 4 2 3 3 4 4 3 2 2 3 8,730 95 95 8,730 8,730 8,730 8,730 8,730 8,730 8,730 8,730 8,730 8,730 8,730 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4,859 4.859 F Value 7,174.15 1.66 0.05 167.89 93.04 2.13 99.73 84.90 27.58 40.96 35.70 28.41 24.98 15.74 10.88 2.48 .75 3.10 3.69 8.25 5.03 .40 5.83 1.28 p Value < .001 0.20 0.83 < .001 < .001 0.12 < .001 < .001 < .001 < .001 < .001 < .001 < .001 < .001 < .001 .08 .52 .02 .005 < .001 .001 .67 .003 .28

Predictor Intercept Main effects Gender Student status Time Environment Community relations Diversity Product issues Employee relations Interactions Time: environment Time: diversity Time: community relations Time: product issues Time: employee relations Environment: community relations Environment: employee relations Environment: diversity Environment: product issues Community relations: employee relations Community relations: diversity Community relations: product issues Employee relations: diversity Employee relations: product issues Diversity: product issues

influence assessment of the firms. It is important to note that participants Time 1 scores for many companies were high, very often in the highest category. In these instances, only two options remained at Time 2score the same or score lower. Thus, we see the average company score decline from Time 1 to Time 2. Our next question, however, was, How did the CSP scores affect ratings from Time 1 to Time 2? After participants received the CSP ratings, the estimates of the interaction parameters became considerably larger. As hypothesized, the 5 dimensions of CSP did have differential effects on participants assessment of the firms. The largest changes in ratings are associated with the environment, diversity, and community relations dimensions. The affect

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Table 5 Employer Attractiveness Ratings at Time 1 and Time 2 Time 1 Mean Rating 3.85 2.47 3.73 3.59 1.87 2.15 4.12 3.64 3.37 3.90 3.21 1.71 2.14 3.42 2.96 4.11 3.45 3.83 3.82 3.71 3.28 3.52 3.73 3.90 3.97 1.45 3.32 3.81 3.46 2.32 3.91 3.36 3.03 2.54 3.66 3.79 4.12 2.31 2.47 2.85 2.66 3.46 3.38 1.63 Time 1 SD 1.20 1.82 1.04 1.32 1.89 2.10 .97 1.21 1.31 1.39 1.24 1.78 1.92 1.63 1.35 .90 1.38 1.25 1.23 1.42 1.64 1.60 1.30 1.52 1.17 1.81 1.23 1.40 .97 2.00 1.14 1.40 1.83 1.78 1.22 1.27 1.14 1.71 1.87 1.75 1.88 1.38 1.25 1.94 Time 2 Mean Rating 3.57 2.64 2.05 2.81 2.86 3.65 3.37 3.30 2.22 3.00 2.64 2.38 2.60 2.89 2.97 2.93 3.33 2.66 2.95 2.92 3.52 2.79 3.40 3.69 3.34 2.83 2.82 3.64 3.00 3.24 3.39 2.80 3.54 3.12 2.78 2.79 2.97 2.80 2.67 3.20 2.55 2.73 2.75 2.62 Time 2 SD .95 1.12 1.37 1.05 1.07 1.21 1.12 1.03 .97 1.06 1.08 1.04 1.10 .97 1.05 .96 1.42 1.11 1.03 1.22 .97 .95 1.18 .94 1.05 1.31 .93 1.29 1.06 1.04 .95 1.01 1.06 1.01 1.04 1.07 1.04 1.06 1.04 1.073 .96 1.05 .96 1.13

Company Name American Express Anheuser-Busch AT&T Bell Atlantic Boeing Cisco Systems Coca-Cola Compaq Computer CVS Dell Computer Delta Air Lines Dow Chemical DuPont Eastman Kodak Exxon FedEx Ford Motor Company Gap General Electric General Motors Goodyear Hewlett-Packard Home Depot Intel IBM International Paper JC Penney Johnson & Johnson Kmart Lucent McDonalds MCI WorldCom Merrill Lynch Metropolitan Insurance Mobil Motorola PepsiCo Philip Morris Procter & Gamble RJR Nabisco Sara Lee Sears Roebuck Sprint Sun Microsystems

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Table 5 continued Company Name Texaco Toy R Us UPS Wal-Mart Walt Disney Xerox Time 1 Mean Rating 2.79 3.80 3.51 3.71 4.25 3.59 Time 1 SD 1.39 1.07 1.69 1.21 1.28 1.45 Time 2 Mean Rating 2.36 3.05 3.57 3.62 3.23 2.75 Time 2 SD 1.04 1.03 .95 .88 1.15 1.11

of product issues is less, whereas that of employee relations the least. Therefore, Hypotheses 7 and 8 are not supported. The analysis also revealed interesting patterns in the way CSP dimension ratings affected firm ratings. As might be anticipated, participants gave more favorable ratings to firms that had higher CSP ratings. CSP ratings of 1, defined as poor, resulted in the lowest firm ratings. For all dimensions, a CSP rating of 2, defined as neutral, resulted in significantly higher firm ratings. This difference was quite marked, especially in the area of environment. The difference in effect between a CSP rating of 2 and 3, good, again was significant and is particularly dramatic in the area of community relations and diversity. The difference between a neutral and good rating in the areas of environment and employee relations had less impact. In the product issues dimension, a rating of neutral resulted in a better overall firm rating than the good rating. This was the only dimension that had an outcome that deviated from the expected order. We next describe our interpretations of these findings in the following Discussion section.

DISCUSSION
This study continues the exploration of the role of CSP in organizational attractiveness that was started by Turban and Greening (1997) and Greening and Turban (2000). Reporting the results of two studies, we first confirm that potential job seekers consider CSP important to the overall assessment of a company. We find that job seekers consider CSP records important at all stages of the job search, but most important when determining whether to take a job offer. Also, as anticipated, job seekers find some aspects of CSP more relevant than others. Namely, environment, community relations, employee relations, diversity, and product issues outrank 6 other categories of CSP. The study also reveals that women

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express greater interest than men in a firms diversity record, and similarly, minorities express greater interest than nonminorities. As we explored the data, we were also interested to see how gender and minority status affected overall concern for CSP. We found that women report a significantly greater concern for CSP than men. Minorities report a slightly greater concern than nonminorities, but not significantly so. We suggest that signaling theory may help to explain these findings. The presence of good social performance may indicate to job seekers that a firm has positive values. Because historically, both women and minorities have faced barriers to entry and career growth in corporations, they may be particularly sensitive to any attributes that suggest concern for the betterment of society or consciousness of societal needs. The presence of a positive CSP record may suggest a better and more welcoming environment. Research in the area of corporate social orientation, a construct that measures the perceived importance of a firms responsibility to society, also suggests that women and minorities are more philanthropically, and less economically oriented than nonminority men (Edmondson & Carroll, 1999; Ibrahim & Angelidis, 1994). With the results of the first study as a foundation, our second study investigates how knowledge of CSP affects opinions about organizational reputation. Before they were presented with CSP data, participants initial ratings of the organizations were highthe top 10 mean ratings were greater than 4.0 on a 5-point scale. We investigated a number of factors to try to explain this high initial rating effect. First, we looked for a relationship between ratings and firm size but found no apparent relationship. Using Turban and Greening (1997) as a foundation, we also did post hoc tests to determine whether initial ratings were related to actual CSP. Using data from Fortune magazines ratings of CSP, there was no significant correlation between CSP and our participants initial ratings of the firms (r = .06, p = .66). We also grouped the 50 firms by industry, and found only two noteworthy rating trends. Computer/ electronics/telecommunications tended to be rated higher overall (m = 4.00) than any other major category, whereas the petroleum industry was rated lower (m = 3.39). The difference between these two ratings was significant (p = .01). Familiarity with the firms presents a second possible explanation for the high ratings. We selected firms for inclusion in the study on the basis of their general familiarity to us. In their study of organizational attractiveness, Gatewood and colleagues (1993) found a high correlation between familiarity with the firm and ratings of firm image. Their findings may help explain the unusually high ratings given by our participants to a group of well-known organizations.

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As discussed earlier, after receiving information about CSP, participant ratings of organizational attractiveness dropped significantly. Part of this drop is explained by the fact that initial ratings were so high (i.e., that there was no place to go but down). But a significant portion of the change in ratings related to the CSP data students received. Participants gave higher ratings to organizations with higher CSP scores and lower ratings to those with poorer CSP scores. To illustrate this in another way, we conducted a between-participants analysis. We summed the ratings of the five dimensions to calculate the overall CSP score assigned to each firm. This overall score was highly correlated (.77, significant at .01 level) with the net change in ratings from Time 1 to Time 2. The lower the CSP score, the greater the reduction in ratings. Therefore, it is clear that there was a change in firm ratings at Time 2, and that change relates to knowledge of CSP data. We expected to find a change in ratings, but the more interesting question is, How do the specific CSP dimensions work to create this change? Or, which dimensions seem to impress job seekers the most? Variations in CSP ratings, from poor to good, resulted in different reactions among the participants. For example, in the environment dimension, there was a notable difference between the effects of a poor rating and a neutral rating. When presented with an organization with a poor environmental rating, reactions were quite strongly negative. However, there was little difference between a neutral and a good environmental rating. The employee relations dimension displayed the same effect, although to a lesser extent. Poor employee relations result in a serious downgrading of an organization, whereas neutral and good ratings are perceived in much the same way as one another. For these areas, it appears that as long as the record is not poor, it is considered acceptable. A poor rating may provide a warning to the job seeker that the organization has a negative image. The areas of diversity and community relations work in a somewhat different way. There was a large gap in ratings between organizations with neutral CSP data and good CSP data. In the case of these dimensions, it seems as if an organization has to be able to demonstrate positive accomplishments to prove itself. It appears from these findings that job seekers set a higher benchmark for employer performance in the areas of diversity and community relations than they do for environment and employee relations. The interactions among pairs of dimensions also revealed some interesting patterns. Using analysis of variance, we examined interactions among each pair of dimensions. First, firms with a low employee relations score garnered low attractiveness ratings even when other factors were

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high. For example, the mean rating for all firms with the lowest employee relations score was 2.9. However, when paired with a high community relations score or a high product issues score, the mean remains at 2.9, (p < .00 for both sets of interactions. Interactions between employee relations and the other dimensions were not statistically significant). When community relations is scored low and employee relations is scored high, there is a large jump in attractiveness ratings (from m = 2.9 to m = 3.2, p < .00). However, that same effect does not take place with other dimensions. When community relations is low and environment is high, the mean attractiveness rating does not change. When we look at combinations of low scores, however, we see some different trends. When community relations and environment are both scored low, the mean attractiveness rating drops to 2.5. However, when environment and product issues have low scores, we reach the lowest of all interaction means, 2.4. Although we can offer no clear explanation of this, it suggests that there is a level of tolerance for organizational shortcomings among job seekers. Although a low rating in one area might have only a small effect on overall impressions of the firm, combinations of low ratings lead to a sharp drop-off in organizational attractiveness. It appears that a combination of low ratings, even among dimensions that are not foremost in the job seekers priorities, contribute to the development of an overall negative image. Hence, even a positive record in one area, such as environment or community relations, may not be enough to offset the negative image conveyed by other, multiple weaknesses. Analysis of the two-way interactions presents data that stand in contrast to the main effects. When we examine main effects, we see that diversity and environment most strongly affect participants ratings of employer attractiveness. Yet, when we view interactions among dimensions, we see that employee relations plays a large role in raising ratings when the firm is performing poorly in another dimension. It is also interesting to compare this to Part 1 of the study, in which participants reported that employee relations is most important to them in assessing an organizations attractiveness. Additional research should be conducted to continue to understand how the dimensions interact and how job seekers value the dimensions differently. Overall, our results indicate that potential job seekers are interested and concerned about a firms record of corporate social performance when considering firms as prospective employers. They also indicate that knowledge of CSP data has an effect on the way in which these prospective employees view the reputation and attractiveness of firms. This study also indicates that certain dimensions of CSPenvironment, community relations, employee relations, diversity, and product issuesare more

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important than other dimensions, and have differing effects on prospective employeesassessments of firms. Specifically, firms with a poor environmental record are likely to encounter hurdles in recruitment, as job seekers are critical of weakness in that dimension. On the flip side, having a good environmental record adds little to the attractiveness of the organization. Similarly, demonstrating positive employee relations adds little, but being guilty of poor employee relations creates a negative recruitment image. Finally, the presence of multiple weaknesses creates a measurable image problem for the firm. Our results are also somewhat surprising, in that issues that would seem to be most salient to job seekers, those issues that have a direct relationship to their daily lives, were less important than broader issues. Again, this may be answered by social identity theory. Job seekers may be concerned about being associated with firms with poor environmental records or poor treatment of the community. Conversely, workers may derive a positive sense of identity from association with a firm that does good things for the neighborhood and the world. Our findings support the need for image management among recruiting organizations. Image management refers to the attempts of an organization to construct positive perceptions of itself to stakeholders (Griffin, 1999). First, our study supports the growing movement that recognizes the importance of corporate social responsibility to the stakeholder group that includes prospective employees. This is a group that has not been given sufficient attention in the CSP stakeholder literature (see Harrison & Freeman, 1999). Second, our study provides preliminary data indicating that these stakeholders use information about the various dimensions of CSP in different ways. Environment, community relations, and diversity ratings create the largest change in opinions about the firm, with employee relations and product issues having a lesser effect. There are also differing levels of tolerance for poor, neutral, and good performance among the dimensions. Although it appears sufficient for a firm to have a neutral environmental record, job seekers have higher expectations when it comes to community relations and employee relations. Good ratings in those areas provide an edge for firms in the eyes of job seekers. Moreover, women and minorities are more critical of a firms CSP record than nonminority men, and express greater concern about these records. This study may be limited in generalizability because of the nature of the sample. Although upper-division students are beginning to engage in the job-search process, another study utilizing a sample of active job seekers is necessary to test the limits of our findings. Future studies might broaden the sample of job seekers to include individuals at different career stages, with different skills, education and experience.

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Additional research is needed to explore further the effects of CSP. This study analyzed the response to CSP data in a hypothetical situation. Researchers might investigate the way in which actual job candidates react to CSP data presented to them during the job search process and how this data influences their job choices. It would also be interesting to explore the relative importance of CSP data compared to other organizational attributes. In other words, does CSP matter in the job-choice process after we introduce other job-choice factors such as salary, working conditions, and opportunities for promotion? The results of our study prompt more questions about the importance of the various dimensions of CSP. Our study suggests that positive employee relations is valued highly and can offset a poor record in community relations. We also found that a neutral or positive environmental record has little effect, but a negative environmental record can result in a negative assessment of the firm. Future research might continue to explore these variable effects and the interaction of positive and negative ratings. Furthermore, it would also be helpful to explore how individual differences mediate the relationship between a firms CSP record and organizational attractiveness. In our study, we provided participants with CSP data and asked them to use this to assess the attractiveness of employers. We did not investigate how job seekers search out and screen CSP data or how firms market CSP data as part of the recruitment process. Furthermore, we focused on familiar, Fortune 500 firms. Researchers might explore how job seekers gather CSP data on smaller, less familiar firms, and how that information is used in the job-choice process. Studies of actual behavior, rather than intentions, may also avoid any potential for social desirability bias, which is introduced when we ask people to report their reactions to scenarios that might be perceived as socially undesirable.

CONCLUSIONS
Our study supports and advances the findings of Greening and Turban (2000), suggesting that CSP is an important attribute to job seekers. Accordingly, firms may find it effective to incorporate CSP information into their recruitment efforts. In addition, although there are a multitude of themes ordinarily considered under the CSP umbrella, our research suggests that firms may be well advised to concentrate their efforts on certain dimensions of CSP and focus on the differing values of diverse job candidates as they present their corporate image.

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Kristin B. Backhaus is an associate professor of management in the School of Business at the State University of New York at New Paltz. She holds a Ph.D. in educational administration and policy studies from the University at Albany. E-mail: backhauk@newpaltz.edu. Brett A. Stone is an associate professor of accounting in the School of Business at the State University of New York at New Paltz. He is a CPA and holds a Ph.D. in information science from the State University of New York at Albany. E-mail: stoneb@newpaltz.edu. Karl Heiner is an associate professor of statistics in the School of Business at the State University of New York at New Paltz. He holds an Ed.D. from Columbia University. E-mail: kwh@world.com.

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