Feeling good plus doing better?
A lot of research on CSR deals with the external effects of a company’s engagement in social issues. These studies have tackled questions such as the following: What are the effects on society? Are customers more committed to brands that serve a cause beyond its own profits? Can brand image be improved by doing good?
But there are also internal effects to CSR activities beyond those on the market. Employees can better identify with companies that build social value and form strong psychological bonds with their employer. As a result, they are more motivated to perform. “Work that has a positive impact on society,” was also found to be the most important measure of career success for high potentials in a recent “leaders of tomorrow” survey conducted by the GfK Verein together with the St. Gallen Symposium.
While hardly anybody questions that CSR makes employees feel good about their company, some critics question if this feeling will actually translate into observable changes in behavior beyond those produced by monetary incentives. Especially in the frontline context, employees do not only identify more or less with the company. They are also confronted with customers on an everyday basis and might identify with them, for example, if they feel to belong to a common social group. This dualism – consumers on one side and the organizational bond on the other – creates a special social landscape. To see if and how CSR works in improving the job performance of frontline employees we developed a model, which we then tested in a study with hundreds of employees at a Global 500 financial services company.
CSR can improve customer service
Overall, the research showed that CSR activities such as charitable giving, environmental programs and ethical practices can motivate frontline employees. Indeed, we found that CSR represents a new way to motivate the frontline work force. By revealing the psychological mechanism behind the relationship between improved service and CSR activity we were able to demonstrate that CSR can be effective for frontline employees, but it isn’t necessarily so in every case. The following model (Figure 1) shows the conditions for a positive effect on job performance.