A Study of Employee Participation in CSR and Its Impact on Employee Engagement

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1 40 A Study of Employee Participation in CSR and Its Impact on Employee Engagement Shweta Bapat, Asst. Professor, Kaveri College of Arts, Science and Commerce, Affiliated to Savitribai Phule Pune University, Pune Dr. Pooja Upadhyay, Associate Professor, AISSM Institute of Management, Affiliated to Savitribai Phule Pune University, Pune ABSTRACT The term engaged workforce is increasingly used to describe the win-win situation where employers expect employees to give their best to achieve organisational goals and employees expect meaningful and challenging job profile. Various research studies across the globe have shown that the level of employee engagement is very low. For example, Gallup Employee Engagement Index reported that, on an average as of 2010, only 33 percent of employees were engaged by their companies, 49 percent were not engaged, and 18 percent were actively disengaged. (Gallup, 2010) Research done on employee engagement in recent years highlights the importance of identifying new drivers of employee engagement. The review of literature reflects than CSR can be an emerging driver of employee engagement. Several studies were undertaken by the researchers all over the world having on the linkage between CSR and employee engagement have found a strong correlation between employee s commitments to their organization and how they rate its social responsibility. As mentioned in the whitepaper written by Rob Gross President, CR Strategies and Commissioned by Bill Holland President, Mandrake CSR is an emerging and increasingly important driver of employee engagement. (Gross & Holland, 2011). Through this research paper an attempt is made to check whether this is true in case of India. With help of structured survey of employees of selected large scale establishments in India an attempt is made to know and understand the impact of employee participation in CSR on employee engagement. Total 109 responses were received from 22 large scale establishments in India. Keywords Corporate Social Responsibility, Employee Engagement 1. INTRODUCTION The term engaged workforce is increasingly used to describe the win-win situation where employers expect employees to give their best to achieve organisational objectives and employees expect meaningful and challenging job. Several studies aimed directly on the linkage between CSR and employee engagement have found a strong correlation between employee s commitment to their organization and how they rate its social responsibility. Literature review of various research papers, research articles, working papers claims and as mentioned in the whitepaper written by Rob Gross President, CR Strategies and Commissioned by Bill Holland President, Mandrake CSR is an emerging and increasingly important driver of employee engagement. (Gross & Holland, 2011) Through this research paper an attempt is made to check whether this is true in case of selected large scale establishments in India. 1.1 Concept of Corporate Social Responsibility Corporate Social Responsibility is the voluntary contribution given by the business community towards a better social and environmental development. Businesses across the world generally concentrate more on immediate results, but it is important to see the vast opportunities available by discharging of social responsibility which can help them in for long term sustainability of the organizations. According to Michel Hopkins Corporate Social Responsibility is concerned with treating the stakeholders of a company or institution ethically or in a responsible manner. Ethically or in a responsible manner refers to treating key stakeholders in a manner deemed acceptable according to international norms. (Hopkins, 2011)

2 Philosophies of Corporate Social Responsibility Corporate social responsibility involves implementing activities to meet society s current expectations. The most rational way of understanding what we might term society s essential expectations is to look at the following three social philosophies that have survived historical evaluation and criticism post eighteenth century. Utilitarianism: Utilitarianism calls on companies to maximize the overall happiness of society. A company must also satisfy stakeholders with whom it has a direct relationship. These requirements are simple enough. New Liberalism: New liberalism recognizes the right of companies to earn profits by utilizing their strengths, but it believes that this should be conditioned on, firstly, their providing equal employment opportunities and, secondly, improving the lives of people living under poor circumstances. This second condition is based on the idea that the social returns from the benefits created by companies should be shared as widely as possible. Communitarianism: Communitarianism calls on companies to respect and ascribe to core community values (autonomy, order, social bonds, and virtues like trust). Whereas libertarians emphasize shareholder interests and new liberalists seek to benefit people at the bottom of society, communitarians focus on the interests of the community. This is because companies are viewed in a historical and social context. 1.2 Concept of Employee Engagement The most important component of organisational success is employee engagement. In case of successful and sustainable businesses engagement of the employees is at the top over other stakeholder s engagement. Engagement occurs when an employee feels an emotional connection and commitment towards an organization and its goals.employee engagement is an approach of the workplace designed to ensure that employees are committed to their organisations, motivated to contribute towards organisational success, respects thevalues of their organisation and are able to enhance their own sense of connectivity and well-being. Common themes found in most definitions of employee engagement include an increased Trust and Sensitivity towards work, connection with the company, proud feeling about the activities of the company. These themes directly or indirectly contribute towards increasing employee commitment and ultimately employee engagement. Though there is no single agreed definition of Employee Engagement; we can see lack of consensus amongst academicians and professionals as to what it actually means. Following definitions suggest the common ground that engagement is more than just performance or motivation. As per Gallup Employee engagement is Individuals involvement and satisfaction as well as enthusiasm for work (Gallup, 2010) As mentioned in Towers Perrin Talent Report 2003, through our study, we ve confirmed a definition of engagement that involves both emotional and rational factors relating to work and the overall work experience. The emotional factors tie to people s personal satisfaction and the sense of inspiration and affirmation they get from their work and from being part of their organization. The rational factors, by contrast, generally relate to the relationship between the individual and the broader corporation. (Towers Perrin, 2003) a combination of commitment to the organisation and its values plus a willingness to help out colleagues (organisational citizenship). It goes beyond job satisfaction and is not simply motivation. (CIPD, 2007) 2. RESEARCH METHODOLOGY This research paper is based on Primary data collection. Survey is the most common method used in judging the impact on engagement. For measuring attitudes and intentions Research surveys and questionnaires are better instruments. In order to understand whether CSR is an emerging and increasingly important driver of employee engagement in India, this paper tries to explore the connection between corporate social responsibility (CSR) and employee engagement by taking the exclusive survey of selected employees of selected large scale establishments in India. The companies selected for this research paper appears in the list of top 100 listed companies which are required to include Business Responsibility Report in their Annual report as per the guidelines of SEBI. The list is been published by BSE as on 31 st March 2016 under clause 55 of SEBI. The survey of employees of 22 selected large scale establishments belonging to diverse industries is undertaken to understand whether CSR can be proved as one of the drivers of employee engagement.

3 42 3. DATA ANALYSIS The primary data collected for this research paper is through survey by adopting convenient sampling method. The structured competition Employee Questionnaire is been prepared to understand the viewpoints of employees about the participation in CSR and its effect on employee engagement. The respondents to this questionnaire belong to selected four companies among top 100 listed companies on BSE. The respondent employees are fulfilling the criterion that Employees must have completed at least 5 years of service at middle or lower level management in the selected organization. Total 109 employees responded from 22 organisations. Employees were asked several questions about their participation in CSR activities of the organization, like; whether they have received any formal or informal CSR training?, The reasons for participating in CSR; whether they are having proud feeling about their company CSR activities? etc. To understand whether the CSR affects positively on the employee engagement or not, employees were asked about their opinion on whether the employee participation in CSR activities of the organization helps the organization to increase 1) trust on the organization, 4) sensitivity towards work. 3.1 Number of Hours spent for CSR activity in a year Table 1: Number of hours spent Particulars Frequency Percentage No participation to 25 hrs to 50 hrs more than 51 hrs Hours of participation in CSR activities in a year MORE THAN 51 HRS 26 TO 50 HRS 1 TO 25 HRS NO PARTICIPATION Graph 1: Number of hours spent Observations: Most of the employees i.e. almost 57.80% are spending up to 25hrs in a year on CSR activity. And 12.84% are spending more than 51 hrs in a year. But still 15.60% employees are not participating in any type of CSR activities of the organisation. 3.2 Participation in number of activities in a year Table 2: participation in activities Particulars Frequency % zero activities to 5 activities to 10 activities activities Participation in CSR activities in a year 11 + ACTIVITIES 6 TO 10 ACTIVITIES 1 TO 5 ACTIVITIES ZERO ACTIVITIES Graph 2: Participation in CSR activities Observation: 75% of respondents are involved in 1 to 5 activities. Very few i.e. 5.50% are involved in more than 11 activities in a year. 3.3 My Motivation in Participating in CSR activity Table: 3 Motivation for participating in CSR activity Motivation for Participation Frequency Impactful CSR orientation and training by HR 37 Included in KRA 31 Earning points for Performance Appraisal 18 My interest in social Work 74 To support organisation 86 feel more connected with the organisation 80 I enjoy doing something different than the routine job

4 43 Motivation in participating in CSR I ENJOY DOING SOMETHING DIFFERENT THAN THE ROUTINE JOB 81 Attended CSR Training Programme FEEL MORE CONNECTED WITH THE ORGANISATION 80 25% Yes TO SUPPORT ORGANISATION 86 75% No MY INTEREST IN SOCIAL WORK 74 Graph 4: CSR Training EARNING POINTS FOR PERFORMANCE APPRAISAL 18 Observation: It is observed that only 25% of respondents have attended CSR training programme and 75% have not. INCLUDED IN KRA Method of training liked by employees IMPACTFUL CSR ORIENTATION AND TRAINING BY HR Graph 3: Motivation for participating in CSR activity Observation: The top three motivations for participating in CSR are 1) To support Organisation in working for the betterment of the community (78%); Table 5: Preferred training method Method of Training Frequency % Workshop Mentoring Counselling Informal Session Any other Method of training liked by employees 2) Employees enjoy doing something different than the routine job. (74%), ANY OTHER 1 3) They feel more connected with the organisation when they participate in CSR. (73%) INFORMAL SESSION Attended CSR training programme COUNSELLING 3 Table 4: CSR training MENTORING 4 Particulars Yes Percentage Yes No WORKSHOP Graph 5: Preferred training method

5 44 Observation: It was asked to the respondents that which type of method of training is liked by the employees most of them said Informal Training and workshop are the two methods liked by them the most. 3.6 Whether the employees feel proud about their company's involvement in CSR Table 6: Responses to whether employees have proud feeling Name of Variable Frequency Percentage Yes No Not Really Having proud feeling about organisation's involvement in CSR NOT REALLY 7 Employee participation in CSR helps organisation to increase SENSITIVITY TOWARDS WORK TRUST Graph 7: Participation in CSR helps organisation to increase Observation: As shown in the graph, it is observed that 88.07% of respondents feel that employee participation in CSR helps the organisation to increase the trust of employees on their organisation. And 73.30% of the respondents feel that it helps the organisation to increase sensitivity towards work as well No Yes NO YES FINDINGS The findings of the survey of employees for understanding their opinion about whether employee participation in CSR has any type of impact on employee engagement are as follows. Frequency Graph 6: Responses to whether employees have proud feeling Observation: 93.58% of respondents feel proud about their company s involvement in CSR, whereas 6.42% are not really having proud feeling about it. 3.7 Employee Participation in CSR helps the organisation to increases Table: 7 Participation in CSR helps organisation to increase Particulars Yes No Yes % Trust Sensitivity towards work The findings shows that majority of employees are participating in CSR activity of their organisation and spending considerable number of hours each year. Another important finding is that the employees are not participating in CSR for their personal benefits like; because it is included in their KRA or for earning more points in the performance appraisal. But in fact it was noticed that employees want to support their organisation in the community related work. Very less employees i.e. only 25% employees have attended CSR training programme. Employees have preferred informal sessions or workshop training methods for CSR training.

6 45 Majority of the respondents have the opinion that they enjoy doing something different than the routine work. It was found out that participation in CSR activity is also because of the interest of employees in social work. Important findings related to the impact on employee engagement are Majority of the employees i.e % employees feel more connected with the organisation when they participate in CSR activity of the organisation % of the respondent employees have proud feeling about their company s involvement in CSR % respondents feel that employee participation in CSR increases the ability of organisation to increase the trust among the employees % of respondent employees are of the opinion that it also helps the organisation in increasing sensitivity of the employees towards work. 5. DISCUSSION AND CONCLUSION As mentioned in objective of the research paper the researchers tried to find out whether we can identify CSR as an emerging driver of employee engagement in India. With help of structured survey of employees of selected large scale establishments in India an attempt is made to know and understand the impact of employee participation in CSR on employee engagement. Total 109 responses were received from 22 large scale establishments in India. From the finding of the survey the concluding remarks are as follows. It can be concluded that many of the organisations have employee participation in CSR on a voluntary basis and that some of them are not even providing any type of CSR training. As the employees enjoy doing CSR activity as they are rejuvenated by doing something different than their routine work. The findings also suggest that there is need of CSR training in the form of informal sessions or workshop. Orientation programmes organised by HR department are also contributing towards motivating employees to participate in CSR. According to the majority of the respondents employee participation gives positive impact on the four main aspects of employee engagement i.e. 1) Trust on organisation, 2) sensitivity towards work, 3) proud feeling about the activities of the organisation and 3) feeling of connection with the company. Therefore it can be concluded that CSR can be identified as emerging driver of employee engagement. REFERENCES [1] A Study of Corporate Social Responsibility in India. (2012). International Journal of Research in IT & Management. [2] Azada, J., & Rochte, M. Workforce for Good Employee Engagement in CSR/ Sustainability. [3] CIPD. (2007). Employee Engagement. UK: CIPD. [4] Crowther, D., & Aras, G. (2008). Defining Corporate Social Responsibility. Bookboon. [5] (2012). Employee Engagement and CSR: Transactional, Relational, and Developmental Approaches. California Management Review. [6] EU Commission. (2002). [7] Gallup. (2010). State of the Global Workplace. Gallup consultancy. [8] Gross, & Holland. (2011). Corporate Social Responsibility and Employee Engagement: Making the Connection. [9] Hopkins, M. (2011). Definition of Corporate Social Responsibility. Retrieved 2014, from national.com/articles/definition-of-csr [10] SEBI. (2012). Retrieved 2015, from cms/sebi_data/attachdocs/ pdf [11] Towers Perrin. (2003). Towers Perrin Talet Report. Towers Perrin.