How CSR Improves Organizations From Within

If your goal is to motivate your employees, chances are that fair labor practices will be a better carrot than fatter profits.

A growing number of published reports suggest that businesses are more likely to motivate their employees by practicing corporate social responsibility (CSR) than they are through the traditional external motivators, such as increasing profits and boosting their public image.

Proponents of CSR tout the positive impact it can have on an organization’s operations. But there has recently been more research and reporting on the less talked about side effects of how CSR affects employees.

In a 2017 article for Conscious Company Media, Olivia Vande Griek states that CSR programs have been shown to benefit employees, improve employee relations, and solidify employee identification with a company. CSR increases employee commitment, retention, engagement, performance and creativity, and it makes a company more attractive to potential hires.

The article cites research reported by Chieh-Peng Lin et al. in the Journal of Business Ethics that defines “corporate citizenship—also known as corporate social responsibility (CSR)” as “a company’s engagement in activity that appears to advance a social agenda beyond that required by law.” In other words, CSR happens when a company goes above and beyond to make the world a better place. This practice can inspire employees to do more than the minimum job requirements through their own behaviors, such as by helping co-workers with tasks that are not their own responsibility, or by taking the time to help new employees through the orientation process. The report categorizes these extra behaviors as conscientiousness, altruism, sportsmanship, courtesy and civic virtue and states that 53 percent of the studies it identified “report evidence of a positive relationship between corporate citizenship and financial performance.”

Additional research reported in the Journal of Management Studies found that perceived social responsibility was a better predictor of how employees identified with an organization than its perceived financial performance. Employee commitment goes hand in hand with being able to identify with an organization and leads to higher rates of employee retention, which can save a business the considerable cost of hiring. For example, a study reported in the Journal of Occupational and Organizational Psychology study found a positive correlation between an organization offering employees paid hours to volunteer for a cause of their choice, and an employee’s intention to continue working for and identify with that organization.

One reason CSR can motivate employees to stick around is its positive effect on self-esteem: “Social identity theory suggests that job applicants have higher self-images when working for socially responsive firms over their less responsive counterparts,” according to Greening and Turban, whose research supported the theory, finding that job applicants are more likely to pursue positions with socially responsible companies than those with poor social reputations. Simply put, feeling better about where you work leads to feeling better about yourself.

Kevin Kruse, founder and CEO of online learning platform LEADx.org, wrote about engagement in Forbes, defining employee engagement as the “emotional commitment the employee has to the organization and its goals…Engaged employees actually care about their work and their company.” If a company can increase employee engagement through CSR, the company essentially increases the amount the employee cares about the company’s outcomes. Therefore, more engaged employees generally perform better.

According to the Conscious Company Media article, CSR can improve “creative involvement, including generating new but practical ideas, originality, and creative problem solving.”

Researchers and employers are coming to understand CSR’s internal benefits, which include employee camaraderie, better retention and improved applicant attraction, in addition to the more well-established external benefits.

 

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