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134 Corporate Reputations, Branding and People Management
employees perceive being delivered against what they feel they
are entitled to expect, weighted by their importance/value to
employees.
The psychological contract gap ϭ (E ϫ Ve) Ϫ D
We regard this weighting element to be important because it is
of little use to employees or employers to have expectations sat-
isfied that are not important to them, a topic we will return to in
Chapters 5 and 6 when discussing workforce segmentation.
Some organizations spend a great deal of wasted time and effort
in meeting or even over-delivering on employee expectations
that are not particularly valuable to certain individuals or groups,
while under-delivering on ones that are. The consequences, as
Huselid et al. (2005) have pointed out, can be very important for
strategy execution, as we have discussed when examining the
employability thesis.
Engaging employees
We will look at engagement in its more specific sense in the last
part of this chapter; first, however, we want to focus on the
notion of engagement in a more general sense (see Figure 4.1).
From our perspective, employee engagement and its associated
behaviours in an organization depend on four key processes:
■ individual identification and identities (who am I?)
■ internalization (what do I believe?)
■ psychological ownership (is it mine?), and
■ commitment (will I stay?).
These four components of individual–organizational rela-
tionships have been the subject of intense research and specu-
lation, and are at the core of modern human resource
management. As Sparrow and Cooper (2003) have argued, the
individualization of the employment relationship has been one of the

most important developments of recent times among organiza-
tions in most developed countries, especially where the influence
of trade unions has decreased and the use of non-standard forms
of employment contracts has increased. Such developments
towards individualization can be seen in two ways. On the one
hand, some writers and critics have highlighted the negative side
by pointing out how modern nation-states and large organiza-
tions have rejected their responsibilities for providing employ-
ment security and passed the onus on to individuals to make
themselves employable through calls for self-development and
displays of flexibility. On the other hand, proponents of these
changes have argued that many employees are increasingly
motivated by the need for autonomy, actively seeking more
career flexibility and the opportunities to follow rather differ-
ent, boundaryless career and work patterns from those of their
predecessors, a point discussed in the previous section. Many
such individuals tend to work in knowledge-intensive and cre-
ative occupations and organizations, business and financial con-
sultants, professional engineers, entertainment, education and
healthcare. Because these people have such different orien-
tations to work and because they tend to be in short supply,
organizations and nations increasingly find themselves compet-
ing for talent and having to devise new ways of managing them
(Davenport, 2005; Florida, 2005).
Measuring and managing identification,
commitment, psychological ownership
and internalization
In our attempt to review this complicated field of individual–
organizational linkages, we have come across a plethora of
terms associated with engagement, including those we discuss

below and others, such as organizational citizenship, culture,
climate and so on. The volume of words, academic articles and
books spilled out on these topics over the past thirty or so years
would stun the average lay reader, as would the complex and
often bitter arguments that different camps prosecute (Henry
Kissinger, a well-known, former US Secretary of State, once
opined that academic arguments were so bitter because they
had so little to argue about). For HR managers, however, it
is important they understand the differences between these
Chapter 4 The quality of individual employment relationships 135
terms since many employee surveys conducted by ‘blue-chip’
organizations fail to distinguish between them, or, even worse,
confuse them. As a consequence, HR managers often have to
rely on measures for A (e.g. commitment) while hoping for B
(e.g. organizational identification).
Individual identities, identification and
internalization
We have made the point repeatedly in the past few chapters that
organizational identity and individual identities, while linked
through the process of identification, are not the same thing;
nor can we assume that individuals will necessarily identify with
the organization’s values, even if they understand why they are
necessary and form part of the wider interests of everyone in
the organization. So, managing change at the organizational
level does not mean changes will occur in the self-concepts of
individual employees, though this may be what organizations
are really attempting to achieve. Most of us will recognize this in
the tensions of our own careers, in achieving a balance between
self interest and the interest of others, which is often played out
in the work–life balance issues, e.g. will I write this book or

spend more quality time with my children? If you don’t recog-
nize it in your own careers, you will see it frequently exhibited
in the political behaviour of others in leadership and manage-
ment positions.
The link between individual identity and identification with
organizations is best explained by social identity theory (SIT) and
the related notion of self-categorization (Ashforth and Mael,
1989; Dutton et al., 1994; Hatch and Schultz, 2004). Though
there are variations on the theme, SIT sees the individual and
organization as potentially linked through a process something
like the following:
1 Individuals develop a personal identity, which is made
up from idiosyncratic personal features, including per-
sonality traits, physical features, abilities and interests,
e.g. extroverted, physically fit, soccer player, often with
few other interests or abilities, except a desire for
136 Corporate Reputations, Branding and People Management
celebrity status (take your pick from a number who
appear on British television!). A key component of
personal identity is a need to preserve or enhance self-
esteem, which is often equated with a healthy or
unhealthy degree of narcissism (Brown, 1997).
2 Individuals begin to develop a social identity, the first
stage of which is to self-categorize the different, salient
groups that they wish or do not wish to belong to, e.g.
let’s say in the case of one of us, our understanding of
the categories of man, father, academic, HR practi-
tioner, Scotsman, etc. Self-categorization involves a
process of having knowledge of these reference groups
and understanding something of their values.

3 Personal identity and self-categorization interact to
begin to form a self-concept, a self-definition and
understanding about oneself that is continuously tested
out by rounds of impression management. This self-
concept is conditioned by the likely and actual reac-
tions of salient others or groups they aspire to identify
with (in-groups) to enhance their self-esteem. A self-
concept is also formed in relation to groups the person
does not wish to identify with (out-groups). To continue
with our soccer player example, their in-groups might
be the pop world, media celebrities and even (usually
self-made) business people and politicians with an eye
for the main chance (increasingly such in-groups are
seen to hang out together as their world blurs into one
of celebrity); out-groups might be political activists or
intellectuals. In essence, this is a theory about oneself,
involving actual or imagined agreement about what
you are like (Scott and Lane, 2000).
4 Social identification occurs when an individual’s self-
concept is seen to be at one with, or belonging to, a
particular social group one aspires to, i.e. by psycholog-
ically accepting the values and norms of the group as an
integral part of themselves. This can occur either sym-
bolically (e.g. dressing like an academic, or flying a
Scottish flag, which, incidentally, neither of us do) or
actually becoming one (e.g. prioritizing the academic,
then the HR professional identity in the case of one of
Chapter 4 The quality of individual employment relationships 137
us, and reversing that prioritization in the case of the
other).

This process helps answer the question ‘Who am I?’. For those
of us with an interest in talent management, SIT provides one of
the best ways of forecasting whether someone will fit the organiza-
tion and be able to become an effective performer in it. Pro-
jections about a recruit’s ‘future self-concept’ have been shown
to be one of the best predictors of what people will eventually do
for a living (Herriot, 2001). Note, we have not said anything as
yet about individuals incorporating a corporate, organizational
identity into their self-concept (see Box 4.4), which is why we
have emphasized the distinction between individual and organi-
zational identities and suggested the latter is not just the sum of
the former, though this process does imply a possible connection.
138 Corporate Reputations, Branding and People Management
Box 4.4 Self-disclosure, identity and (lack of)
organizational identification
To continue in the spirit of self-disclosure (but, hopefully, not self-
aggrandizement) and, in the process, learning about yourself through
writing (Clegg et al., 2005; Grey, 2005), let’s use one of us as an illustration
(readers and students often tell us it is a help to provide a personality
behind the words). He is a full-time business school academic, who was by
no means an extrovert but had a healthy(?) need for self-esteem, and
whose early interests and abilities lay in understanding people and busi-
ness studies, and competitive sports, e.g. football and athletics.
His career ‘anchors’, those underlying features that have shaped his
work life (at least according to assessment guides) are the need for auton-
omy, developing expertise and being entrepreneurial/creative. After try-
ing early, failed, ‘careers’ in football and art (a little, but not sufficient,
talent/motivation for both), he did a degree in business because it was
the only programme available in the vicinity that taught applied social sci-
ences in which he had developed an interest. Following graduation, he

became involved in personnel management, but soon began to think
about an academic career because of his, rather romantic, view of aca-
demics in higher education, and in business schools in particular (since
Chapter 4 The quality of individual employment relationships 139
he had studied in one as an undergraduate, which helped him self-
categorize what it meant to be an academic, and had a high regard for
some of the, rather bohemian, people who taught him).
With the passing of time and other degrees, he progressively came to
value the independence and intellectual aspects of academic life, and
sought through research, teaching and writing the esteem of his profes-
sional colleagues, which is institutionalized in the UK by the peer-
reviewed Research Assessment Exercise (your work is judged by peers in
relation to everyone else’s to help provide your institution – and, indir-
ectly, you – with a score). The idea that he could also do something use-
ful to help managers and employees work together to make the Scottish
economy more effective also began to figure progressively in his refer-
ents (although English by origin, he had come to identify himself as a
Scot, based on what he understands an educated Scot to be, and identify
with the economic and social development of Scotland). All along, he
had continued to identify himself with the HR profession because he val-
ued what reflective, influential HR practitioners and consultants could
do to improve industrial and economic life. Note, we have not said any-
thing about him identifying with a particular university or organization;
indeed, his current portfolio career, which involves him in teaching in a
number of different ones in various parts of the world (exporting people
and ideas is what Scotland seems to do best) and consulting for different
companies, suggest that a single organizational affiliation is not some-
thing that he would feel at one with. Besides, he had already spent 23
years with one university, which he outgrew and it outgrew him.
You might say that this is his autobiographical image; others will

author his biographical reputation(s), including his wife, kids and
mother-in-law in due course, as he struggles to cope with other aspects of
his identity.
This attempted self-disclosure is not mere self-indulgence (though
there may be a degree of (healthy?) narcissistic rationalization) but an
example of what Denise Rousseau (1995) terms an idiosyncratic career
and what Richard Florida (2002, 2005) would see as an increasingly
important component of the ‘creative class’. Increasingly, organiza-
tions are faced with managing such people, which is one of the most
difficult challenges they face, and one that requires quite different
solutions to conventional ‘talent’ management, as we shall see in the
next chapter.
There are several rather subtle, but important, implications
that emerge from this version of social identities. The first is
that to identify with an organization does not require someone
to expend effort in doing so; a person only needs to see them-
selves as ‘psychologically intertwined’ with the organization
(Ashforth and Mael, 1989). So organizationally focused behav-
iour and loyalty (or affective commitment) are rather different
ideas and, according to different theories, are either causes or
consequences of identification. We will return to this point
when discussing the contribution of engagement to under-
standing individual–organizational linkages. The second is to
emphasize that this is a relative process. We tend to highlight
the similarities between our own self-identity and those of the
group we aspire to relate or belong to, and play up the distinc-
tiveness between ourselves and those groups that don’t fit
in with our self-identity (Sparrow and Cooper, 2003). So, for
example, this may be the reason many people do not define
themselves as belonging to their organization; it also fits into

our earlier analysis of cosmopolitans and locals. Third, the ques-
tion ‘Who am I?’ is not the same as ‘What do I believe?’. This lat-
ter question is addressed by the process of internalization.
Internalization is the process of incorporating the goals and
values of an organization into one’s identity or ‘as part of them-
selves’ (Mael and Ashforth, 1992; Dutton et al., 1994; Pierce et al.,
2001). Getting employees to internalize the organization’s iden-
tity is what most organizations seem to be striving for, reflecting
the idea of ideological psychological contracting cited earlier and
the oneness between individual and social identity in the original
formulation of SIT. It reflects employees’ motivations to be on
the side of right and not wrong – there can be few shades of grey
here – and is based on a need to believe in the virtues of the
organization. The results are pride in membership and positive
inclinations to the organization and its leadership (Reade, 2001),
as well as behaviours such as remaining with the organization and
performing ‘beyond contract’.
Some of the original work on internalization in relation to
organizational identities was carried out on alumni of US uni-
versities, a number of whom, you might expect, have fully intern-
alized the values of their alma mater, and have put their hands
in their pockets to ever-increasing degrees to make endowments
140 Corporate Reputations, Branding and People Management
of the size that universities in other countries can only dream
of. There are cynics among us, however, who would question
the degree of internalization and suggest that such giving may
be attributable, in certain cases, to the kinds of unhealthy nar-
cissism, ego-defensive and self-aggrandizing motivations and
behaviours associated with ‘semi-detached’ leadership (Brown,
1997) or, more prosaically, tax breaks. Part of the problem with

these ideas is that you cannot really look into someone’s head
for motives; you can only examine what they do and what
they say, which is why questionnaires are often a poor test of
internalization.
You may have guessed that there is an important qualification
in what you have read: social identification and internalization
are changeable over the course of employment and subject to
constant negotiation and re-negotiation. The identification
process is a continuous round of iterations, confirmation and
disconfirmation of self-identity, which is often associated with re-
inventing one’s career. The idea of an increasingly boundaryless
career, in which employees are believed to not only move in and
out of organizations but also occupations during their employ-
ment history, often having second and third careers, is one illus-
tration of these processes (Arthur et al., 1999). Both of us, for
example, have had three careers and three professional identi-
ties, sometimes simultaneously, as HR practitioners, academics
and consultants. These three identities can lead to tensions and,
at various times in our careers we have emphasized one more
than the other in the process of our career re-inventions.
The social identification and internalization processes are
also dependent on continuous positive evaluation of the organi-
zation’s image by its employees; such an evaluation also takes
into account what employees believe important others (e.g. cus-
tomers, close friends, etc.) think about its image. This last elem-
ent is one of the most important features of how images are
incorporated internally (Dutton et al., 1994). Finally, how leaders
behave in their governance and day-to-day actions can influence
this continued identification enormously; we are now witnessing
calls for more and better feedback evaluations of individual and

collective leadership at the boardroom level (Goffee and Jones,
2005). This is a role in which HR can play an important part, as
we shall discuss in the final chapter of this book.
Chapter 4 The quality of individual employment relationships 141
Psychological ownership
Jon Pierce and colleagues (2001) have argued that, although
identification and internalization are important constructs for
understanding the relationships and attachments between indi-
viduals and their organizations, neither is a complete nor even
necessary explanation of one of the most important individual–
organizational connections, namely psychological ownership.
They define this idea as follows:
As a state of the mind, psychological ownership … is that
state in which individuals feel as though the target of
ownership (material or immaterial in nature) or a piece of it is
‘theirs’ (i.e., ‘It is MINE!’). The core of psychological ownership
is the feeling of possessiveness and of being psychologically
tied to an object. (Pierce et al., 2001, p. 299)
Rather slickly, they contend that ‘mine’ is a small word, but one
with enormous consequences for organizations. Ownership,
they argue, arises because people have a built-in need to pos-
sess, or because it satisfies certain human motives, which are
either socially derived or genetic. These include:
■ the need to control our lives; ownership confers on us
certain rights and abilities to shape our work environ-
ment so that we can become more effective – for
example, the degree to which we can determine our
working times and places through flexible working
■ self-identity, which is formed partly through our inter-
actions with what we possess, and our reflections on

what they mean – for example, company cars and the
way we personalize our computer equipment
■ the need to have a place, or ‘home’, that we can call our
own, which is not only a physical but also a psycho-
logical space. For example, employees not only seek
office or work spaces they can call their own, but also
look for ‘soul mates’ they can metaphorically set up a
‘home’ with at work. This is an argument against the
current fashion for saving costs and forcing communi-
cations through open-plan offices and ‘hot-desking’.
142 Corporate Reputations, Branding and People Management
Ownership is achieved by three ‘routes’, involving:
■ having a strong degree of control of the object of our
ownership, such as the job or the organization and its
performance
■ coming to know the object of our ownership intimately
by having a ‘living’ relationship with it, for example the
metaphorical gardener who comes to feel the garden
belongs to him/her after a certain time of working in it
■ investing the self into the object of our ownership.
Through time, as we expend effort into shaping, creat-
ing or making something, we feel that we come to
own what we have shaped, created or made, such as
machines, ideas and even people, e.g. our projects, pro-
tégés and apprentices.
The consequences of psychological ownership are to create
among employees a set of perceived rights and responsibilities
that help explain why individuals promote and resist change. So,
change that is self-initiated by employees who have high levels of
psychological ownership is more likely to be promoted and

accepted because it enhances feelings of self-efficacy and con-
trol. Likewise, imposed change is likely to be resisted because it
diminishes feelings of self-efficacy and self-control. This concept
is extremely important in understanding the success or other-
wise of stock or share ownership in organizations, often given as
a form of reward to individuals and as a way of creating organ-
izational identification. As Sparrow and Cooper (2003) point
out, providing employees with share or stock options without
building in the routes to psychological ownership will not pro-
duce the hoped-for benefits in terms of greater organizational
identification and motivated behaviour.
Finally, however, it is also worth noting that high levels of psy-
chological ownership can also create pathological responses
among those people who become separated from the objects of
their ownership. For example, many years ago one of us worked
as a personnel manager in a construction company. Some senior
managers in that company proposed laying-off a large number
of young electricians who had spent many months installing
electrical wiring in a new and high profile building, on which
many of these apprentice electricians were naturally proud to
Chapter 4 The quality of individual employment relationships 143