Employee engagement, employer branding and the service-profit chain

This paper defines, explains and evaluates the concepts of employee engagement, employer branding and the service-profit chain and demonstrates their practice within three high profile, household name UK retailers, namely Marks and Spencer, Harrods and Selfridges. These retailers were interviewed to discover what retail HR practitioners are actually doing within their firms and which metrics identify their application and relative success in terms of improved performance. The companies interviewed all practice employee engagement in some form or another. Employee engagement is part of the strategic narrative at M&S where its introduction has brought about a de facto culture change. It has been very important in the HR strategy of Harrods where the company has re-evaluated its 'DNA' and to some extent returned to the values of its past while at the same time being clear about where the future lies for staff and HR practices. At Selfridges engagement is one element in an overarching HR strategy but it is not a key strategic approach. All three companies focus strongly on developing their line managers and creating people focused KPIs. Additionally all three companies reported the importance of employer branding in attracting the best candidates. Employee engagement is about being a good employer and as Rayton et al (2012) have shown in their forensic demonstration of the benefits of employee engagement, about being financially successful. The author proposes a model, based on Heskett et al’s service-profit chain (Heskett et al,1994) which shows the linkages and synergy between employee engagement, employer branding and performance in a retail setting.