Is Investing in Employee Well-Being Beneficial for Brand Equity?

Brand equity, the value of a brand in the eyes of various stakeholders, is a multidimensional concept that is traditionally assessed from financial, customer, and employee perspectives. This study examines how a company’s investment in employee well-being shapes customer-based brand equity, a key driver of corporate reputation. We hypothesize that investing in employee well-being positively influences brand equity, while actions undermining it have a negative effect, with the latter being more pronounced. An online experiment of 1364 participants from the United States and the United Kingdom evaluated three dimensions of brand equity: product quality, service quality, and brand attachment, based on scenarios incorporating different degrees of a company’s investment in employee well-being. The findings confirm that investing in employee well-being favorably affects brand equity, while compromising it has a negative impact. Indeed, detrimental actions were found to have a more pronounced effect. Personal values, such as work–life balance importance and meaning in life, shape perceptions of brand equity and the impact of a company’s level of investment in their employees’ well-being. This research offers insights for companies seeking to strengthen brand equity by investing in employee well-being and highlights the complexities of customers’ perceptions regarding these investments.