This study aims to draw on signaling and informal institutions theories to hypothesize that the employee-centric signals emitted by corporations do not aim at meeting solely the expectations of prospective and current employees but also the institutional pressures that constraint and influence a firm’s action and choice.
In support of these predictions, the association between the visibility of employee-centric signals in the corporate websites of 282 Fortune 500 firms and measures of operational performance like Return on Sales and annual gains in Earnings per Share were strongest among firms operating in service industries as well as among firms employing large numbers of individuals.
Under these institutions begetting the expectation of an employee-centric corporate stance, employee-centric signals might both increase institutional legitimacy and have performative effects inspiring judicious employee behavior.
Certain institutions exert pressure on firms to portray an employee-centric stance, and firms might benefit from quenching these institutional pressures by sending employee-centric signals.
