Personal Finance

Balancing CSR activity and employee welfare

CSR

While the free services help society, they only slightly improve staff feelings about employer. PHOTO | COURTESY

scottbellows

Summary

  • Research found that CSR did not harm employee relationships as might have been feared by human resources departments or worries about perceived double-standard staff cynicism regarding executives’ CSR motivations.
  • In fact, CSR related positively with both employee perceived support and emotional commitment to the organisation.
  • The CSR relationship with employee commitment was slightly stronger than feelings of support, but both relationships showed only small benefits.
  • Unsurprisingly, CSR to shareholders yields the smallest benefit to worker perceptions and attitudes.

Hand washing stations here, student scholarships there, free sanitary towels left, and highway safety signs right.

Sometimes we feel awash with small corporate social responsibility (CSR) initiatives of giving away helpful products and services while branded with piercing company logos and advertising.

Much debate swirls around corporate motivation for CSR. Do entities conduct societal helping behaviours as a way to assist their communities out of pure empathy and compassion or alternatively do they seek to brag about their good deeds through advertisements and marketing?

Most researchers and commentators ascribe that the impact of a firm originates from how their products or services affect people, the planet, and their own profits.

An entity with damaging products or services merely cannot clean up their community footprint simply by giving out a few shillings to charity. Yet many companies do indeed harm society but try to cover up their public image through CSR and aggressive marketing.

It seems odd that even Kenyan companies that sell deadly products have corporate social responsibility and corporate social investment initiatives.

An American study found that in the United States, their tobacco firms spent more money on advertising their charitable giving than the money they actually spent on the charity itself.

But not much thought and debate tend to go into how CSR affects employees working in the same organisations.

Amid the flurry of CSR conducted across the for-profit sector, what impact does it have on employees as stakeholders?

Does CSR make staff proud to be associated with the organisation? Or might CSR make workers agitated that pro-community activities get funded instead of going into staff compensation funds?

An enlightening robust study by Assâad El Akremi, Jean-Pascal Gond, Valérie Swaen, Kenneth De Roeck, and Jacques Igalens delineates the six different types of CSR and the effect on employees.

The first type of CSR centres around communities in which the organisation works.

Second, CSR providing support to natural environmental causes have increased substantially in popularity. Third and fourth, companies actually do CSR support to both their customers and their suppliers.

Fifth, firm charity could be considered CSR towards their employees if they go above and beyond for their staff. Sixth, CSR could even be counted as charitable if given to or benefiting their shareholders.

From the firm’s perspective, beyond marketing CSR awareness to customers, how do they benefit from CSR?

Companies desire their workers to feel supported and feel emotionally committed to the organisation.

Such perceptions and attitudes held by workers, when high, carry direct benefits on their work output, leading to greater firm profits. Therefore, companies strive to enhance employee support and commitment.

EMOTIONAL COMMITMENT

The research found that CSR did not harm employee relationships as might have been feared by human resources departments or worries about perceived double-standard staff cynicism regarding executives’ CSR motivations.

In fact, CSR related positively with both employee perceived support and emotional commitment to the organisation.

The CSR relationship with employee commitment was slightly stronger than feelings of support, but both relationships showed only small benefits. Unsurprisingly, CSR to shareholders yields the smallest benefit to worker perceptions and attitudes.

In short, CSR activities at an employer only mildly improves employee feelings towards the employer.

So, while employees do appreciate and feel pride in their employer's charitable endeavours, other employee-focused initiatives, such as employee appreciation programmes, better internal communication, and more team building as examples, could have much greater positive impacts on a firm's workforce.

Dr Scott may be reached on [email protected] or on Twitter: @ScottProfessor