Michael Vlassopoulos and Mirco Tonin, lecturers in economics at the University of Southampton, have been conducting research into the impact that Corporate Social Responsibility initiatives have on workers at the companies that take ton those initiatives. ?At VoxEU, they provide a summary of their initial findings. ?The takeaway here seems to be that there are real benefits to CSR strategies when it come to worker productivity.?
Specifically, they are associated with a 20% rise in productivity and this effect is present whether the donation to the charity is lump sum or related to subject?s performance. This suggests that what motivates workers is the presence of social incentives rather than their specific form. Consistent with this, in the real world firms introduce CSR policies in a variety of ways. For example, in the US, large retailers and grocery chains, such as Target Corporation and Whole Foods Market donate 5% of their pre-tax profits to charitable groups, while in the UK there exists the so-called Percent Club for companies that pledge to donate at least 1% of their pre-tax profits to charitable causes, with members like GlaxoSmithKline, Deloitte, and the John Lewis Partnership. On the other hand, other firms opt not to explicitly link their CSR budget to profits.
When we compare the effectiveness of private and social incentives in boosting productivity, we find that social incentives are at least half as effective in motivating subjects as compared to private incentives. What this means is that an employer that spends $1 on a charitable cause will generate at least the same increase in productivity as $0.50 spent on paying workers directly.
If we consider the additional gains arising from tax benefits, and additional advantages coming from the appeal of CSR to customers, regulators, or investors, we may well conclude that social incentives are cost-effective. Also, one could expect social incentives to become increasingly more effective in motivating employees relative to private incentives as earnings increase and the marginal utility of money decreases. This may be one of the factors behind the increasing importance of CSR policies. For instance, in a survey by the Economist Intelligence Unit (2007), 34% of corporate executives indicated that CSR was a high or very high priority for their firms three years earlier, compared to 55% saying so with regard to the present and almost 70% expressing their expectations on how high a priority it will be three years hence.
Read?Do social incentives matter? Evidence from an online real effort experiment here.?
Posted 07-26-2012 9:44 AM by Graham Griffith Filed under: vox, global business, VoxEU, charitable giving, Corporate Social Responsibility, incentives, worker productivity, employee incentives, Michael Viassopoulos, Marco Tonin, corporate philanthropy
jodie fisher zooey deschanel yvette prieto hypertrophic cardiomyopathy kaye stevens michael jordan engaged kid cudi
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.