What Are Seals of Approval and How do they Work?

There is no uniform definition of the term “seal of approval” in the literature. For example, seals of approval are also used synonymously with the terms quality seal and quality label according to Haenraets et al. (2012, p. 149). Some basics on the topic of quality seals are presented below together with an insight into the effect of seals of approval.

1. Basics on the Subject of Seals of Approval

The german Gabler Wirtschaftslexikon (2022), for example, defines seals of approval oder quality seals as “[…] graphic or written labeling of offers that signal a certain quality to the consumer.” Conversely, Hofmann (2001, p. 31) describes it as “[…] designations that are awarded by special quality associations and stand for objectively verifiable quality criteria.”

Georg (2019, p. 25) agrees with the above explanations and describes a quality seal or seal of approval as proof of one or more quality features. Rheinbay and Günther (2000, p. 100) add that quality seals can be understood as an indication of quality control guaranteed by quality associations, federations, and other neutral bodies.

A seal of quality is understood to be a word or picture symbol that makes a quality statement in relation to an area or an entirety. This can also refer to individual aspects of a company, an organization, a product, or a service, as Gierl and Winkler state (2000, p. 197). According to Hogreve (2006, p. 105 f.), quality seals are usually awarded by a third party. This may, for example, be a certification company, a publisher, or a consumer organization.

Quality seals are often awarded by independent organizations to confirm the quality and reliability of products, services, or general company characteristics. Quality seals play important roles in influencing consumer attitudes toward products and services. Studies show that seals of approval can strengthen consumer confidence in a product’s quality and reliability by serving as external confirmation of compliance with certain standards (Esch, 2019, p. 52). In a survey, 78% of respondents confirmed that seals of approval make their purchasing decisions easier (Utopia, 2019). This trust often results in a positive attitude toward the certified products, which increases the likelihood that consumers will prefer and recommend these products to others (Roe et al., 2001, p. 138).

According to Moussa and Touzani (2008, p. 526), the spread of quality labels has become a global phenomenon. This development is said to be triggered by growing consumer concern about the safety of food, increasing consumer knowledge about the links between nutrition and health, and the shift in consumer behavior toward more environmentally conscious and ethical consumer behavior.

Consumers tend to look for bargains when they are uncertain about quality, fearing being cheated and, therefore, aiming to reduce their risk. However, bargain-hunting leads to companies of higher quality being driven out of the market while only companies of lower quality remain (Akerlof, 1970, pp. 489-492). Companies resort to quality labels to differentiate themselves from the ever-increasing range of goods on offer and the competition. This also applies to the growing shortage of skilled workers. Here, too, companies use quality seals to set themselves apart from other employers.

Quality seals are understood to be extrinsic quality signals. In summary, a seal of approval can be understood as an image intended to attribute a certain quality to a product or service, or an organization in general.

2. Principles and Classification of Seals of Approval

A seal of approval is an extrinsic quality signal that provides consumers or interested parties with additional information to facilitate their purchasing or selection decisions (Haenraets et al., 2012, p. 149). Quality seals help build trust by providing an objective confirmation of quality or performance that would otherwise be difficult to assess. Quality seals are said to have two different effects. One, they can act as an incentive for motivation and two, they can act as a quality signal to reduce information asymmetries (Naundorf, 2016, pp. 12-14).

Spence’s signaling theory (1973) explains this phenomenon through the role of quality seals as signals that reduce quality uncertainties on the market. A manufacturer signals to a consumer that their product or service meets certain quality criteria through a seal of approval, which has a positive influence on a consumer’s attitude.

This positive attitude is reinforced if the seal of approval comes from a renowned and trustworthy institution (Haenraets et al., 2012, p. 152). Quality seals have a significant influence on the perception of the quality of a product or service. They serve as extrinsic quality indicators that help consumers assess the quality of a product, especially if the intrinsic quality characteristics are not directly apparent (Roe et al., 2001, p. 142). The perceived quality of a product increases if it is awarded a seal of approval, which has a positive effect on purchase decisions (Esch, 2019, p. 56).

Quality seals can also influence purchasing decisions by increasing perceived quality and strengthening positive attitudes toward a product. If consumers perceive a quality seal as being credible and trustworthy, they are more willing to buy the certified product, even if it is more expensive than comparable products without a seal (Esch, 2019, p. 59).

Similarly, employer seals influence the decision of potential applicants. An employer seal can increase a company’s attractiveness as an employer and positively influence the decision of candidates to apply to that company. Employer seals, therefore, serve as significant instruments in HR marketing to attract qualified applicants and strengthen the perception of a company as an attractive employer through targeted employer branding.

Quality seals create trust, which is why they are also referred to in the literature as “trust-building institutions,” “trust intermediaries,” or “trusted third parties” (Sarkar, Butler, Steinfield, 1995, pp. 1-9). Therefore, this is key information (Naundorf, 2016, p. 12- 14; Rüdiger, 2008, p. 163).

2.1. Criterion: Awareness of a Seals of Approval

The awareness of a quality seal and the associated brand plays a decisive role in its impact. Quality seals that are widely known and recognized have a greater impact and can influence a consumer’s decision-making process more strongly. This is because well-known seals are often associated with positive experiences and high quality (Haenraets et al., 2012, p. 150).

According to Abramovski and Enneking, quality labels are most effective “when they are awarded by a neutral, independent party” and “…have a high profile” (2017, p. 173). Quality marks that are widely known generally enjoy greater credibility, as they are perceived as signs of quality and reliability. A well-known brand can also strengthen the credibility of a claim, as it stands for consistency and trustworthiness (Haenraets et al., 2012, p. 152). “The more self-explanatory seals and their symbols are, the more likely they are to gain genuine recognition” (Utopia, 2019).

1.2 Criterion: Perceived Credibility of the Source

The effectiveness of a quality seal is strongly influenced by the perceived credibility of the issuing organization. Quality seals awarded by reputable and independent institutions generally enjoy a higher level of trust and acceptance. Consumers tend to view such seals as reliable indicators of quality and safety (Esch et al., 2016, p. 1280). A source’s credibility is determined by its competence and trustworthiness. Experts are generally perceived as more credible than laypeople, as they have in-depth knowledge and experience in their field (Klebolte, 2019, p. 527).

The credibility of a seal of approval depends largely on the reputation and independence of the issuing organization. Sources that are perceived as credible and trustworthy have a greater influence on consumer or employee decision-making. Studies show that the credibility of quality seals directly influences the effectiveness of these seals, as they increase the trust of the target group and, thus, increase their willingness to use the certified offer (Haenraetset al., 2012, p. 152).

1.3 Criterion: Prior Knowledge of a Seals of Approval

Consumers’ prior knowledge and attitudes toward seals of approval are further critical factors that determine the impact of such a seal. Consumers who have already had positive experiences with quality seals or generally consider them to be trustworthy and helpful are more inclined to make their purchasing decisions on the basis of such seals. Conversely, skepticism or negative experiences can reduce the effectiveness of a seal of approval (Haenraets et al., 2012, p. 152). Consumers who have already had positive experiences with certain quality labels or have a fundamentally positive attitude toward them tend to rate information conveyed by these labels as more credible (Haenraets et al., 2012, p. 149).

2. Quality Seals for Employer

In her dissertation, Dr. Jessica Naundorf emphasizes the importance of employer seals to employer attractiveness. Employer seals can significantly improve a company’s visibility and image. However, she also points out some critical points. Many employer seals are based on subjective evaluations and surveys that do not always reflect the authentic conditions in the company. It is important to critically examine the methodology and criteria of employer seals to ensure they are objective and valid (Naundorf, 2016, pp. 74-76).

Employer awards often have a strong symbolic effect that goes beyond the actual benefits. They can improve a company’s image in the short term, but the promised benefits and conditions must actually be practiced in the long term to maintain attractiveness (Naundorf, 2016, pp. 38-40). Companies should ensure that participation in employer seals is not just a superficial façade but that the qualities and conditions awarded are implemented in everyday working life. This is the only way to ensure long-term employer attractiveness (Naundorf, 2016, p. 219-22).

2.1. Which Criteria Influence the Success of an Employer Seal / Seal of Approval?

Awareness of a seal influences (Esch, 2019, p. 58) consumers. If consumers rate a seal and its issuing organization as trustworthy and competent, the perceived quality increases considerably. The effect of quality seals on consumers’ purchasing decisions is well documented. Studies show that quality seals positively influence purchasing behavior by increasing consumer confidence in the quality and safety of products (Roe et al., 2001, p. 144). Quality seals can serve as a decision-making heuristic that helps consumers simplify their purchasing decisions and minimize the risk of making wrong decisions (Haenraets et al., 2012, p. 155).

Overall, it can be stated that studies confirm existing research to the effect that employer seals significantly influence applicant behavior and subjectively perceived employer attractiveness. The literature research has confirmed Tavakkoli’s findings. He states that perceived attractiveness as an employer and willingness to apply can be increased by employer seals (2009, p. 32-41). This is contradicted by a study by Lohaus and Rietz (2015, pp. 70-84), according to which an employer seal does not influence employer attractiveness. In this context, Naundorf (2016, pp. 14-16) calls for more research on this topic and considers employer seals to be decisive differentiation criteria that can influence the choice of employer.

Employer seals serve as important quality signals that reduce information asymmetries and provide guidance for potential applicants. The presence of an employer seal in job advertisements can increase the likelihood of an application and, at the same time, improve the quality of applications. However, to maximize this positive influence and gain and maintain applicants’ trust, it is crucial that the award criteria and the methodology of awarding seals are transparent and comprehensible.

Positive effects can be expected from the use of employer seals, particularly in the early recruitment phase (Abramovski and Enneking, 2017, p. 173). This is also confirmed by Burmann and Schäfer (2005) and von Walter, Henkel, and Heidig (2011), who assume the relevance of spontaneously assessed key information. In the early phase of an application decision, applicants largely make decisions on the “basis of signals,” “general impressions,” and “possible associations” (Turban, 2001, pp. 292-312). Numerous studies show that the general use of seals of approval has a positive effect on weaker brands in particular (cf. SPILLER, 2001, pp. 47-50). If this finding is transferred to employers, then an employer seal makes sense, especially for less well-known employers.

3. Summary: Seal of Approvals

Quality labels are classified as extrinsic quality signals and can demonstrably influence consumers. In The Perceived Credibility of Quality Labels: A Scale Validation with Refinement, Moussa and Touzani emphasized that there is a positive connection between the perceived credibility of a label provider, the perceived product quality, and the willingness to buy (2008, p. 526 – 531).

Quality Seal – Seal of Approval for Employers

In general, it can be stated that quality seals are a decision-making aid for consumers, as they provide additional information on the product or service and reduce uncertainty among consumers because an assessment is made easier before a purchase is made (1999, p. 5-32).

There are various criteria for assessing a quality label from the consumer’s point of view. According to Larceneux (2001, pp. 11-14), the credibility a consumer gives to a quality seal is a decisive factor in the evaluation of that seal and, thus, also the indicator that significantly influences the effectiveness of a quality seal from the perspective of the seal user. He goes on to explain that consumers classify the many different quality seals according to their credibility. According to Larceneux, consumers would only consider quality seals that are considered credible (2001, p. 4).

Numerous other studies have shown that quality seals influence consumer behavior. This is also confirmed by a study according to which respondents said they will trust a seal if the criteria are known (57% fully agreed), and the publisher is known, to which 45% fully agreed (Utopia, 2019).

Employer seals serve as important quality signals that reduce information asymmetries and provide guidance for potential applicants. The presence of an employer seal in job advertisements can increase the likelihood of an application and improve the quality of applications. However, to maximize this positive influence and gain and maintain the trust of applicants, it is crucial that the award criteria and methodology of awarding a seal are transparent and comprehensible. Therefore, using a suitable quality seal can be very useful for entrepreneurs.

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