More than ever, companies are actively committed to philanthropy. A 2015 survey reveals that, of the world’s 250 largest companies, 92% released a report detailing their efforts to improve environmental and societal well being compared to only 64% in 2005. Beyond the PR boost, businesses have found that an increased focus on corporate social responsibility (CSR) also contributes positively toward employee retention, performance, and job satisfaction. One popular method of implementing CSR is through prosocial incentives, where companies reward workers by engaging in charitable actions.
Companies using prosocial incentives should, however, carefully consider their approach to CSR, with particular concern toward how charitable endeavors may be perceived by employees. According to a study by Stephen Meier, business professor at Columbia University, and Lea Cassar, assistant professor in Behavioral Managerial Economics at the University of Cologne, workers may react negatively—and even reduce their productivity—if they believe employers are attempting to pawn off profit-seeking behavior as philanthropy.
The study was conducted with the help of an Italian company, which hired a sample of 3,000 workers on Amazon Mechanical Turk to write product slogans for their English website. Each worker was asked to produce three taglines and given the option of producing three additional taglines. To incentivise the added production, the sample was divided in two, with one half told they would receive a personal monetary bonus—half of the baseline pay—for the extra lines, and the other told that the extra work would be rewarded with a charitable donation of the same amount.
The groups were then further divided; half of both groups were informed that the incentive would be awarded whether or not they completed the bonus slogans, while the other half was told the incentive was contingent upon the extra work. An additional vignette study asked a separate pool of respondents whether they would prefer working for a company that decided to engage in CSR only after market research confirmed its profitability, or one that committed to CSR without consulting any data.
The study found that, although productivity increased when a monetary award was given for the extra taglines, incentivising philanthropy actually reduced productivity. While 54% of employees did the extra work when the donation was made regardless, only 49% did the same when the donation was offered as a reward. The employer was also rated as less socially responsible by those who were awarded conditionally with a personal payment or a donation.
Most strikingly, it was revealed that workers who were incentivised with charity were less likely to do the added work than a control group of employees who received no reward at all. Just 52% of the workers swayed with any kind of charitable donation—whether it was dependent upon the extra work, or given either way—completed the bonus taglines, as opposed to the 61% who did it without any kind of incentivisation.
Taking into account the results of the vignette study as well—in which workers indicated that strategic CSR was less socially responsible, and less effective as a motivational tool or a hiring perk—it’s apparent that companies may want to evaluate how they broadcast their CSR efforts, and be especially tactful when using prosocial initiatives as employee incentives. Although the study itself is limited in its methodology and sample pool, and cannot be called conclusive, common sense would seem to indicate that doing good for selfish purposes isn’t nearly so attractive as true altruism.
