What Employees Get Out of
Giving Back
Corporate social
engagement can generate massive value, but not just for the reasons everybody
talks about.
Though
corporate social engagement is on the rise, its place within business culture remains
uncertain. Sceptics argue that enshrining social impact as a core value
contradicts the basic nature of a for-profit enterprise. They insist that
social concerns should stay separate from, and secondary to, primary business
needs.
One
compelling counter-argument is that while the common good may not always be a
top business priority, attracting and retaining top talent absolutely is. And
valued employees—like human beings in general—love to feel that they are
helping others.
Research
literature tells us that acts of generosity might even make us feel good
regardless of the extent of their impact, in what has been called the “warm
glow” effect. Altruism is its own emotional reward, which presumably pays off
for firms that offer employees opportunities to apply their social conscience
at work.
A
few years ago we, along with our colleague Michelle Rogan (now at University of
North Carolina), found that management consultants who had participated in a
voluntary social
impact initiative at their firm were up to 32 percent
more likely to stay with the company. We estimated that the firm saved millions
in turnover costs as a result. Additionally, consultants had to take a 25 to 50
percent temporary pay cut in order to participate. Perhaps surprisingly, this
requirement did not deter participation. More than 1,000 employees had taken
part by 2013, accepting salary cuts totalling more than US$28 million.
The
initiative’s purpose was to provide social impact organisations—such as
development agencies, foundations and non-profits—with relevant consulting
expertise at a fraction of the usual fee. Participating consultants used the
same skillset they had honed working for Fortune 500 clients in places like
London or New York, to help organisations often in new settings like rural
parts of low-income Asian or African countries. Because the initiative was tied
in with the firm’s core business, rather than managed as a standalone
“corporate social responsibility” project, it was required to at least break
even to ensure long-term financial viability and scalability.
In
our original study, we had assumed that employees were signing up just because
they wanted to make a difference in the world. But then we started wondering
whether that was the entire explanation. Were there other motivations at work?
The answer may be relevant to companies mulling how to best engage employees in
their own social impact efforts.
Private
vs. social
To
collect direct evidence on what exactly motivated employees to participate in
the programme, we implemented a survey that was distributed to thousands of
employees in the firm’s U.S., Canada, Ireland and U.K. offices. There were two
different versions of the survey: one for ex-participants, another for
non-participants. The survey questions were based on a series of interviews we
conducted with consultants prior to and following their stint in the programme.
As
we describe in a forthcoming article in Strategic Management Journal, our
analysis (based on numerous one-on-one interviews and the large-sample survey)
revealed that employees’ expectations were pretty much evenly split between
wanting to make a difference for its own sake, and reaping private career
benefits from doing so. While a passion for changing the world was certainly an
important motivation, employees also regarded participation in this unique
programme as an investment in their own future rather than something that would
hold them back in their careers.
The
interviewees told us that social impact consulting projects were a bit like a
trial by fire. Shoestring budgets meant that junior consultants often got an
opportunity to take on team leader roles that would not have been possible in
conventional commercial projects, given their level of experience. A senior
consultant could even be expected to assume a workload normally managed by two
or three people in traditional projects. The unfamiliar working environment
took consultants outside their developed-world comfort zone, bringing out the
best they had to offer. So participating in the initiative was seen as a great
way to show one’s true leadership mettle, while acquiring new skills.
These
private benefits were at least as much of a driver of employee interest as the
“warm glow” factor. Seen in this light, participants’ willingness to accept a
salary cut is not quite so surprising. They were not solely taking a hit to
save the world: They could help the world and their own careers simultaneously.
Tipping
the balance
On
the face of it, this might suggest that companies can kill two birds with one
stone—channeling employees’ altruism and leadership ambitions to help pay for
reputation-burnishing social impact programmes.
However,
deeper analysis revealed that survey respondents were not so naïve about the
possibility of their employers being too instrumental. When asked about the
maximum salary cut they would accept to take part in the programme, a
significant number supplied a non-trivial amount. Past participants even
indicated they would take a bigger cut the next time round. However, when a
salary cut was mentioned as the cost of entry to the programme, employees’
concerns turned more towards private career benefits, with social impact
becoming less of a focus.
It’s
perhaps natural for people to expect some sort of tangible, personal reward in
exchange for a financial sacrifice. But we surmise that our respondents’
reactions were grounded in a sense of fairness being called into question. They
had no way of knowing whether the proposed salary cut was necessary or
exploitative. Without contextualisation, the prospect of losing money brought
self-interest to the fore, where previously it had been balanced by pro-social
concerns.
Walk
the talk
Our
findings have two main implications for companies venturing into social impact.
First, do not rely on “warm glow” alone to garner employee participation.
There should be a reason for employees to expect their careers will benefit
too. In general, then, social impact programmes will be most successful when
they tap into employees’ core competencies. Volunteering at a children’s
hospital or soup kitchen will supply the “warm glow”, but might have little to
no career application.
Second,
successfully integrating social impact into the core business requires a
pathway to financial sustainability. Otherwise, the programme will quickly
implode. To make it work, organisations can ask participants to shoulder a
share of the burden, in the form of a salary cut or some other sacrifice—but
such a request should be accompanied by total transparency. Be prepared to
share the programme’s actual costs in order to clarify that the intention is
not to take advantage, but rather to collectively ensure the programme remains
solvent and potentially scalable.
Vincent
Stanley from Patagonia (a prime example of a caring company) once told us about
the importance of authenticity in leadership: “If you do things like caring for
the world or treating the employees well purely for instrumental reasons, it
will come back and bite you. You have to believe in it.”
In sum, programmes
that are both sustainable—therefore realistic about human nature and
self-interest—and seriously committed to making the world a better place can be
massive value generators. But if mission-driven strategy gives way to a purely
opportunistic mindset, employees will follow suit. With the higher purpose lost
in the shuffle, the programme will likely fail and the potential rewards—both
material and emotional—will be forfeited.
Jasjit Singh, INSEAD Associate Professor of Strategy, and Christiane Bode, Assistant Professor of Management and Technology at Bocconi University | November 8, 2017
Read more at
https://knowledge.insead.edu/responsibility/what-employees-get-out-of-giving-back-7636?utm_source=INSEAD+Knowledge&utm_campaign=16752658c3-EMAIL_CAMPAIGN_2017_11_09&utm_medium=email&utm_term=0_e079141ebb-16752658c3-249840429#jzKetV7GixM1vqpV.99
No comments:
Post a Comment