A conceptual framework linking CSR with employee job attitudes and behaviours

Transcription

1 Page 1 of 15 ANZAM and Organisational behaviour Competitive session A conceptual framework linking CSR with employee job attitudes and behaviours ManimegalaiSanthosh, Ph.D. Research Scholar Department of Management Studies, Indian Institute of Technology, Chennai , India manimegalaimssw@gmail.com Dr.Rupashree Baral, Assistant Professor Department of Management Studies, Indian Institute of Technology, Chennai , India rupashree@iitm.ac.in ABSTRACT: Studies are aplenty to suggest the financial benefits of Corporate Social Responsibility (CSR) however, studies are scarce to link CSR with non-financial measures of organizational effectiveness such as affective commitment, job engagement and organizational citizenship behaviour (OCB). This paper argues that the success of an organization lies in enhancing positive attitudes among employees and probably, one of the ways to promote this is through CSR. Moreover, studies are rare to delineate the process through which CSR can bring positive attitudes. To address this gap, this paper attempts to develop a conceptual framework linking CSR with employee attitudes and behaviours elaborating the roles of pro-social identities, organizational trust, CSR communication and values. The paper also discusses managerial implications of the study. Keywords: Corporate social responsibility (CSR), employee engagement, commitment, citizenship behaviour, stakeholder theory, values.

2 ANZAM 2014 Page 2 of 15 A conceptual framework linking CSR with employee job attitudes and behaviours ABSTRACT: Studies are aplenty to suggest the financial benefits of Corporate Social Responsibility (CSR) however, studies are scarce to link CSR with non-financial measures of organizational effectiveness such as affective commitment, job engagement and organizational citizenship behaviour (OCB). This paper argues that the success of an organization lies in enhancing positive attitudes among employees and probably, one of the ways to promote this is through CSR. Moreover, studies are rare to delineate the process through which CSR can bring positive attitudes. To address this gap, this paper attempts to develop a conceptual framework linking CSR with employee attitudes and behaviours elaborating the roles of pro-social identities, organizational trust, CSR communication and values. The paper also discusses managerial implications of the study. Keywords: Corporate social responsibility (CSR), employee engagement, commitment, citizenship behaviour, stakeholder theory, values. In today's scenario, organizations look for employees who can engage in their jobs, demonstrate higher psychological attachment with their employer and engage in pro-social or organisational citizenship behaviour (OCB). Subsequently, management s responsibility is to adopt human resource practices which will enhance such positive attitudes and behaviours of employees, which are essential attributes for the growth of any organization. One of such human resource practices is believed to be corporate social responsibility or CSR (Crowther & Capaldi, 2008). Although, there is no consensus on the definition and concept of CSR (McWilliams, Siegel & Wright, 2006), it is defined as discretionary allocation of corporate resources towards improving social welfare that serves as a means of enhancing relationships with key stakeholders (Arevalo &Aravind, 2011). There are plenty of studies to suggest that CSR activities bring many benefits to the organization in terms of attraction and retention of employees (Brammer, Millington & Rayton, 2007), reputation (Skudiene & Auruskeviciene, 2012), increased level of engagement (Smith &Markwick, 2009) and financial growth (Keinert, 2008). However, evidences are scarce to suggest strong association between CSR and employees work attitudes (Maignan & Ferell, 2001; Peterson, 1

3 Page 3 of 15 ANZAM ; Turker, 2009). Moreover, despite this acknowledged effectiveness of CSR in generating social and business returns as well as work attitudes, there has been limited research explicitly examining the process of how CSR influences these work outcomes such as affective commitment, job engagement and OCB (Aguinis & Glavas, 2012). The purpose of this paper, therefore, is to develop a conceptual framework that explains how companies might influence positive employee attitudes and behaviour in terms of affective commitment, job engagement and OCB through CSR initiatives by focusing on various intermediate mechanisms. LITERATURE REVIEW AND PROPOSITIONS Corporate Social Responsibility (CSR) to Various Stakeholders CSR towards employees: Sound policies and practices, employee participation in decision making, equity in employee remuneration, good working conditions, elimination of child labour, avoidance of gender bias- all reflect an organization s CSR towards its employees. An organization can enhance its employees attitudes by adhering to these standards. (Mishra & Suar, 2010; Skudiene & Auruskeviciene, 2012). CSR towards customers: Customers play a vital role in organizational effective functioning. An organization s CSR activities towards its customers includes practicing ethical advertising, adhering to product standards, prioritising customer health and safety and providing better products at right prices. Organization s policies and practices towards its customers will in turn affect customers attitudes towards it (Mishra & Suar, 2010; Skudiene & Auruskeviciene, 2012). CSR towards community: Companies that practice community outreach programmes as part of their CSR are known for their interventions towards community development like building schools, hospitals, etc., (Skudiene & Auruskeviciene, 2012). Though Indian companies have gained competitive advantage in the global market, there still exists problems such as high unemployment, income inequality, lower access to and low standards of health and education, mal-nourishment, lack 2

4 ANZAM 2014 Page 4 of 15 of safe drinking water, etc. (Arevalo & Aravind, 2011). These conditions should serve as a signal for companies to show more concern for the community. CSR towards environment: In recent years, there has been abundant pressure on the firms to adhere to environmental standards for their sustainability in the long run. This forces the firms to comply with ISO 14000, OHSAS and so on. Companies are also taking pro-active measures for emission reduction in anticipation of future requirements (Mishra & Suar, 2010). The manufacturing sector plays a prominent role in protecting our environment, since they consume more resources from it. Link between CSR and Job Attitudes and Behaviours Indian firm s especially manufacturing sector is facing lots of problems in attracting employees and more than attracting, employers face lots of challenges in retaining them. Nowadays, skilled employees are at the center of attraction but the demand for the same is at the peak (Shanmugam & Mohamed, 2011). It clearly signals the fact that, organization has to adopt some measures in order to attract and retain employees. Among those some measure, one measure could be employee engagement. Employee engagement or job engagement is commonly known as a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication, and absorption (Schaufeli, Bakker & Salanova, 2006). Engagement is a key driver of individual behaviour and performances, as well as organizational performances such as productivity, retention, financial performance and shareholder return (Gruman & Saks, 2011). Hewitt Associates have reported a steady decline in global employee engagement level. They observed that this is the largest decline that they have ever seen in the last 15 years (Smith &Markwick, 2009). This triggers the need of some unusual measures to engage employees. A majority of research has explored personality factors, and job demand and resources factors based on JD-R theory (Job Demand and Resource theory) as determinants of employee engagement. But, there are few researches linking CSR with employee engagement (Lin, 2010). This paper aims to address this gap and elaborates CSR- employee 3

5 Page 5 of 15 ANZAM 2014 engagement relationship using stakeholder s theory (employees, customers, community and environment). Affective commitment: Organization commitment is defined as, Employees interest in and connection to an organization (Hoeven & Verhoeven, 2013). There are three types of commitment: continuance, normative and affective. Affective commitment is defined as employee s positive emotional attachment to the organization whereas the other commitments are described as a feelings of obligation towards their organization (Brammer et al., 2007). Affective commitment produces positive behavioural outcomes such as high job performance, low turn-over and decreased absenteeism (Grant, Dutton &Rosso, 2008). Employees exhibit affective commitment when the distance between employee-stakeholders relationship is less and also that particular stakeholder is highly benefitted of CSR activities (Hoeven &Verhoeven, 2013). Earlier studies suggest that there is a positive relationship between external CSR (community, customer and environment) and affective commitment (Brammer et al., 2007). Other studies suggest that, the relationship between CSR and organization commitment will be positive with individual s belief on CSR (Peterson, 2004). Organization Citizenship Behaviour (OCB) is defined as an Employee s voluntary activities that may or may not be rewarded but that contribute to the organization by improving the overall function or quality of setting in which work takes place (Cha, Chang & Kim, 2013). It can be classified as behaviour directed towards an individual or behaviour directed towards an organization. When employees perceive their organization as exerting prosocial characteristics towards their stakeholders, it will then motivate them to display citizenship behaviour towards their organization as well (Cha et al., 2013). Literature reveals that employees who perceive their employer as socially responsible have fewer tendencies to quit their job and higher tendency to engage in OCB (Hansen, Benjamin, Dunford, Boss, Wayne Boss & Angermeier, 2011). Also Wong, Ngo and Wong (2006), have found that trust towards an organization can enhance employees citizenship behavior towards their organization. 4

6 ANZAM 2014 Page 6 of 15 The link between CSR and employee attitudes and behaviours such as job engagement, affective commitment and OCB can be well stated using Social Identity Theory or SIT (Brammer et al., 2007; Peterson, 2004; Turker, 2009). SIT proposes that, employees develop self-concept by identifying themselves within the group and comparing themselves with the other groups (Peterson, 2004). An individual s self-image is highly dependent on the social categories they belong to. That in turn exhibits his social identity, describes and prescribes the way one should behave. Employees always expect positive social identity to distinguish themselves from others (Turker, 2009). Organization is one of the social categories where employees share their success and failures and display their emotions accordingly (Turker, 2009). Hence, according to SIT, if an employee s feels proud of their organization s social responsibilities towards various stakeholders, it will lead to positive work attitudes (Peterson, 2004; Turker, 2009). Employees who are satisfied with their organization s social responsibility will display positive emotions, attitudes and behaviour such as engagement (Pivato, Misani & Tencati, 2007; Rupp, Ganapathi, Aguilera & Williams, 2006), affective commitment (Grant et al., 2008; Hoeven &Verhoeven, 2013) and OCB (Cha et al., 2013). Thus, based on the above discussions, the following propositions are proposed: P1: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to employee engagement. P2: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to affective commitment of an employee. P3: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to OCB of an employee. Mediating Role of Prosocial Identity and Organizational Trust in the Link between CSR and its Outcomes Organizational prosocial identity : Identity in general tries to answer the question WHO AM I? An individual will hold multiple identities which represent his nature. Organization s prosocial 5

7 Page 7 of 15 ANZAM 2014 identity is defined as Organization s genuine care towards their employees and other stakeholder s (Cha et al., 2013). When employees become aware of their organizational CSR activities to their stakeholders, they perceive their organizations as caring and genuine. They also experience external prestige and pride of membership and thus, fulfilling the need for self-esteem or self-enhancement (Bhattacharya, Rao & Glynn, 1995; Mael & Ashforth, 1992). As a result of enhanced self-esteem, employees are motivated to show positive attitude towards their organizations which in turn generates better work outcomes (Cha et al., 2013) such as affective commitment (Bansal, 2003; Grant et al., 2008) and OCB (Cha et al., 2013). Thus, employee s awareness about their organizational CSR activities towards themselves and towards various stakeholders will result in organizational prosocial identity (Cha et al., 2013) and thus paves way for attitudinal and behavioural outcomes. Extrapolating these findings we predict that CSR activities towards the stakeholders will enhance the sense of prosocial organizational identity and which in turn will induce employee engagement too. Therefore, it is posited that P4: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to employee engagement, affective commitment and OCB of an employee through organizations prosocial identity. Personal prosocial identity is defined as, Employees caring attitude towards their fellow workers and other people who are in need (Cha et al., 2013). When employee s gets an opportunity to do good to others, their interpretation about themselves will be enhanced through personal prosocial identity (Grant et al., 2008). Prosocial identity involves a process called Pro social sense making in which an employee identifies himself as prosocial, when he renders help to people. When an employee is aware of organizational CSR activities towards various stakeholders, he takes pride in the organization and hence, the need for self-esteem or self-enhancement gets fulfilled which in turn induces positive work outcomes (Bhattacharya, Rao & Glynn, 1995; Mael & Ashforth, 1992). Personal prosocial identity serves as a strong driver of helping behavior and volunteerism (citizenship behaviour) (Finkelstein, Penner & Brannick, 2005). With this background, we can propose that CSR 6

8 ANZAM 2014 Page 8 of 15 activities to various stakeholders will create personal prosocial identity which in turn will induce employee engagement, affective commitment and OCB of an employee. Hence, the following proposition: P5: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to employee engagement, affective commitment and OCB of an employee through personal prosocial identity. Organizational trust: Trust is very essential for any relationship to prosper. Organizational trust (i.e., trust in an organization) is defined as one party s confidence that the other party in the exchange relationship will not exploit its vulnerabilities (Seppanen, Blomqvist & Sundqvist, 2007). This confidence can be generated only when an organization clearly communicates its actions or policies with its employees through formal and informal channels (Tan & Lim, 2009). Socially responsible organizations are usually perceived as fair organizations. As a result, employees are more likely to trust their organization (Rupp et al., 2006). The relationship between CSR and financial performance of the organization has been established through the mediating role of trust that is developed among employees (Pivato et al., 2007).When employees trust their organization; their subsequent actions (attitudes and behaviours) will be guided by the trust factor (Pivato et al., 2007). Moreover, literature suggest a positive link between CSR and organizational trust (Lamberti and Lettieri, 2009), and between organizational trust and work engagement (Chughtai and Buckley, 2008). In 2010, Lin examined the role of CSR in the formation of organizational trust and employee engagement and found a positive relationship between the same. Hence, the following proposition: P6: Perceptions of CSR activities aimed at employees, customers, community and environment will be positively related to employee engagement, affective commitment and OCB of an employee through organizational trust. Moderating Role of CSR Communication and Personal Values in the Link between CSR and its Outcomes 7

9 Page 9 of 15 ANZAM 2014 CSR communication can be explained as flow or exchange of information from one party to another (Hoeven & Verhoeven, 2013). CSR can be effective only when it is promulgated through proper channels.csr communication is as important as it is implemented. Employees attitude and behaviour are shaped by the communication they receive. The relationship between employers and employees are determined by the communication pattern (Hoeven &Verhoeven, 2013). When an organization is engaged in CSR activities to various stakeholders, but its employees are unaware of those activities, it may not induce positive attitude towards the organization (Alon, Lattemann, Fetscherin, Li & Schneider, 2010; Hoeven &Verhoeven, 2013). According to Ball, Coelho and Machas (2003), communication is proposed as an antecedent of trust. They made an attempt in studying the influence of communication on customer satisfaction and trust. Similarly, we believe that organizational CSR communication may strengthen the relationship between CSR activities and prosocial identities and trust, highlighting the moderating effect of the same. Therefore, we propose that P7: CSR communication will moderate the relationship between perceived CSR activities aimed at employees, customers, community and environment and prosocial identities (both personal and organizational) and trust. P8: CSR communication will moderate the relationship between perceived CSR activities aimed at employees, customers, community and environment and employee engagement, affective commitment and OCB. Personal values (Employee ethical belief): Values are essential in deriving necessary outcomes of CSR activities. Values can be defined as Concepts or beliefs, about desirable end states or behaviour, that transcend specific situations, guide selection or evaluation of behaviour or events, and are ordered by relative importance (Hemingway & Maclagan, 2004). Literature reveals that individual values play a key role in individual outcomes (Kim & Kim, 2010). Hence, we expect that employees beliefs about organization s involvement in CSR activities will influence their actions at work. When employees are forced to compromise their personal ethics in order to achieve corporate 8

10 ANZAM 2014 Page 10 of 15 goals, dissonance will occur which will lead to negative consequences. CSR activities might prompt more positive beliefs about the firm. When an individual does not have sound ethical beliefs, CSR policies and practices cannot bring changes in their attitudes and behaviour. There exists conflict between employee ethical belief and organization s interest, when employer forces an employee to behave in a way that contradicts their personal belief (Cha et al., 2013; Froelich & Kottke, 1991). Literature supports that ethical fit between employee and organization influences work attitudes such as satisfaction, commitment, and also turnover intention (Sims & Kroeck, 1994). Hence, we propose that, P9: Employee ethical belief will moderate the relationship between perceived CSR activities aimed at employees, customers, community and environment and prosocial identities and trust. P10: Employee ethical belief will moderate the relationship between perceived CSR activities aimed at employees, customers, community and environment and employee engagement, affective commitment and OCB. THE CONCEPTUAL FRAMEWORK [Insert Figure 1 about here] Discussions and Implications In today s competitive world, motivating employees and enhancing positive attitudes and behaviours among them has become a major challenge before practitioners. Based on review of literature, this paper develops a conceptual framework and certain propositions which aim to provide insights to managers that one of the ways to enhance positive employee attitudes and behaviours is through CSR. Future research should test the model using a questionnaire survey among employees of particular industry sector probably in the manufacturing sector. The manufacturing industry contributes to more social development because it consumes more resources (land, water, electricity, manpower, etc.) from the society. Consequently, it is obliged to give back to the society in the form of 9

11 Page 11 of 15 ANZAM 2014 CSR (Elving &Kartal, 2012; Gautham & Singh, 2010). In terms of academic contributions, this paper aims to provide useful reference for future empirical research on this topic. 10

12 ANZAM 2014 Page 12 of 15 REFERENCES Aguinis, H. &Glavas, A. (2012). What we know & don t know about corporate social responsibility: A review & Research agenda. Journal of Management, 38, Alon, I., Lattemann, C., Fetscherin, M., Li, S. & Schneider, A. (2010). Usage of public corporate communications of social responsibility in Brazil, Russia, India and China (BRIC). International Journal of Emerging Markets, 5, Arevalo, J. A. &Aravind, D. (2011). Corporate social responsibility practices in India: approach, drivers & barriers. Corporate Governance, 11, Ball, D., Coelho, P. D. &Machas. A. (2003). The role of communication and trust in explaining customer loyalty - An extension to the ECSI model. European Journal of Marketing,38, Bansal, P. (2003). From issues to actions: The importance of individual concerns and organizational values in responding to natural environmental issues. Organization Science, 14, Bhattacharya, C. B., Rao, H. & Glynn, M. A. (1995). Understanding the bond of identification: An investigation of its correlates among art museum members. Journal of Marketing, 59, Brammer, S., Millington, A. &Rayton, B. (2007). The contribution of corporate social responsibility to organizational commitment. The International Journal of Human Resource Management, 18, Cha, J., Chang, Y. K. & Kim. T. (2013). Person- organization fit on prosocial identity: Implications on employee outcomes. Journal of Business Ethics, DOI /s Chughtai, A. A. & Buckley. F. (2008). Work Engagement and its Relationship with State and Trait Trust: A Conceptual Analysis. Journal of Behavioural and Applied Management, 10, Crowther, D. &Capaldi, N. (2008). The ashgate research companion to corporate social responsibility. England, Ahgate publishing limited. Elving, W. J. L. &Kartal, D. (2012). Consistency in behaviour of the CEO regarding corporate social responsibility. Corporate Communication: An International Journal, 17,

13 Page 13 of 15 ANZAM 2014 Finkelstein, M. A., Penner, L. A. &Brannick, M. T. (2005). Motive role identity and prosocial personality as predictors of volunteer activity. Social Behavior and Personality, 33, Froelich, K. S. &Kottke J. L. (1991). Measuring individual beliefs about organizational ethics. Educational & Psychological Measurement, 51, Gautham, R. & Singh, A. (2010). Corporate social responsibility practices in India: A study of top 500 companies. Global Business & Management Research: An International Journal, 2, Grant, A. M., Dutton, J. E. &Rosso, B. D. (2008). Giving commitment: employee support programs and the prosocial sense-making process. Academy of Management Journal, 51, Gruman, J. A. & Saks, A. M. (2011). Performance management & employee engagement. Human Resource Management Review, 21, Hansen, D. S., Benjamin, B., Dunford., Boss, A. D., Boss, R. W. &Angermeier, I. (2011). Corporate Social Responsibility and the Benefits of Employee Trust: A Cross-Disciplinary Perspective. Journal of Business Ethics, 102, Hemingway, C. A. &Maclagan, P. W. (2004). Manager s personal values as drivers of corporate social responsibility. Journal of Business Ethics, 50, Hoeven, C. L. &Verhoeven, J. W. M. (2013). Sharing is caring: Corporate social responsibility awareness explaining the relationship of information flow with affective commitment. Corporate Communications: An International Journal, 18, Keinert, C. (2008). Corporate social responsibility has as international strategy. Heidberg, Springer. Kim, Y. & Kim, S. (2010). The influence of cultural values on perceptions of corporate social responsibility: Application of Hofstede s dimensions to Korean public relations practioners. Journal of Business Ethics, 91, Lamberti, L. &Lettieri. E. (2009). CSR Practices and Corporate Strategy: Evidence from a Longitudinal Case Study. Journal of Business Ethics, 87,

14 ANZAM 2014 Page 14 of 15 Lin, C. P. (2010). Modeling Corporate citizenship, organizational trust, and work engagement based on attachment theory. Journal of Business Ethics, Mael, F. &Ashforth, B. E. (1992). Alumni and their alma mater: A partial test of the reformulated model of organizational identification. Journal of Organizational Behavior, 13, Maignan, I. &Ferell, O. C. (2001). Corporate citizenship as a marketing instrument- concepts, evidence and research directions. European Journal of Marketing, 35, McWilliams, A., Seigel, D. & Wright, P. (2006). Corporate social responsibility: Strategic implications. Journal of Management studies, 43, Mishra, S. &Suar, D. (2010). Does corporate social responsibility influence firm performance of Indian companies? Journal of Business Ethics, 95, Peterson, D. K. (2004). The relationship between perceptions of corporate citizenship & organizational commitment. Business & Society, 43, Pivato, S., Misani, N. &Tencati, A. (2007). The impact of corporate social responsibility on consumer trust: the case of organic food. Journal of Business Ethics, 17, Rupp, D. E., Ganapathi, J., Aguilera, R. V. & Williams, C. A. (2006). Employee reactions to corporate social responsibility: an organizational justice framework. Journal of Organizational Behavior, 27, Schaufeli, W. B., Bakker, A. B. &Salanova, M. (2006). The Measurement of Work Engagement with a Short Questionnaire: A Cross-National Study. Educational & Psychological Measurement 66, Seppanen, R., Blomqvist, K. and Sundqvist.S. (2007). Measuring inter-organizational trust a critical review of the empirical research in Industrial Marketing Management, 36,

15 Page 15 of 15 ANZAM 2014 Shanmugam, K. & Mohamed, S.N. (2011). A study on CSR initiatives in Indian Automobile Industry. Interdisciplinary Journal of Contemporary Research in Business, 3, Sims, R. L. &Kroeck, K. G. (1994). The influence of ethical fit on employee satisfaction, commitment and turnover. Journal of Business Ethics, 13, Skudiene, V. &Auruskeviciene, V. (2012). The contribution of corporate social responsibility to internal employee motivation. Baltic Journal of Management, 7, Smith, G. R. &Markwick, C. (2009). Employee engagement- A review of current thinking. Institute for Employment Studies, 469, Tan, H. H. & Lim, A. K. H. (2009). Trust in co-workers & Trust in Organizations. Journal of Psychology, 143, Turker, D. (2009). How corporate social responsibility influences organizational commitment. Journal of Business Ethics, 89, Wong, Y., Ngo, H. & Wong, C. (2006). Perceived organizational justice, trust, and OCB: A study of Chinese workers in joint ventures and state-owned enterprises. Journal of world business, 41,