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Leadership How getting employees involved in giving can produce big dividends

Daniel Skarlicki is the Edgar F. Kaiser professor of organizational behaviour, Marketing and Behavioural Science Division, UBC Sauder School of Business

Savvy business leaders have long understood that when employees feel valued and fulfilled, they’re also more productive. So it’s no surprise that they offer all kinds of programs and perks, from flexible hours to plum assignments, and from casual days to holiday bonuses.

But many don’t realize that sometimes doing things outside that employer-employee relationship can also boost morale, and if employees have a say in the process, the benefits can be even more profound.

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Corporate social responsibility, or CSR, is defined as actions that promote social good beyond the immediate interest of a company and its shareholders, and also beyond what is required by law. This can include things like sponsoring a new city park, launching green initiatives, setting up an employee assistance program, seconding an employee to a charitable organization, or making improvements to safety and working conditions that are far greater than what regulations demand.

Studies have shown that when employees are working for an organization that they see is contributing to society, they tend to feel their jobs are more meaningful, because even if their work isn’t directly tied to those CSR initiatives, it is helping to fuel that greater good. It also helps drive what we call the norm of reciprocity: when employees see their company going above and beyond, they are more likely to follow suit.

But it turns out that effect is amplified even more when employees have a sense of autonomy and a say in their company’s CSR activities. In a recent study, we surveyed nearly 700 full-time employees from five regions – Canada, Singapore, France, China and Hong Kong – and found that, just as workers feel more engaged when they have autonomy in their jobs, they feel more fulfilled when they have a voice in their employers’ broader social initiatives.

This is especially true in areas that tend to have more individualistic values, such as North America and Europe.

These findings have several implications for business. Corporations tend to think about CSR as an activity that helps the outside world, but social engagement clearly pays off in terms of employee engagement, too. As a result it’s all the more important that companies not only take on philanthropic projects, but that they make sure their employees are aware of them, and even have a hand in choosing them.

For example, the Vancouver credit union Vancity has built its brand on its charity and community works, and invites its employees and members to submit and vote on possible projects. Similarly, Mountain Equipment Co-op’s community initiatives and social purpose permeate through the organization, making it a highly desirable place to work.

Organizations with CSR initiatives that are developed with employee input can be especially important to millennials, who tend to place immense value on working for organizations that participate in social causes, to the point where it significantly influences the employers they select.

The approach is not without potential downsides: if the employees see the charitable moves as corporate window dressing, they are less likely to get behind them, so the motivation and execution must be seen as genuine; also, employees who participate may feel frustrated if something they suggest doesn’t get a green light. That’s why it’s essential for employers to explain the rationale behind their decisions and keep workers informed and involved.

Some businesses feel that CSR initiatives are too costly and onerous; they have a product or service to sell and they need to focus on profit.

The challenge is that if profitability is a company’s sole concern, employees are more likely to be unsatisfied, burn out, and move elsewhere, which can impede the business’ prospects for long-term growth. In other words, skipping on good corporate citizenship in an effort to save money may provide savings in the short-term, but can prove far more costly in the long run.

What’s more, many business leaders often assume that improving our societies, and addressing the world’s problems is the responsibility of governments; but that is both untrue and unrealistic. Businesses have immense wealth, power and reach, and must step up, get involved, and set an example – both within their business communities and within their organizations.

Not only will it pay off in terms of the world we live in: it will make for a more satisfied workforce and a healthier bottom line – and leaders who set the best example will almost surely come out ahead.

Daniel Skarlicki is the co-author, along with Deborah E. Rupp of Purdue University, Ruodan Shao of City University of Hong Kong, E. Layne Paddock of ETH Zurich, Tae-Yeol Kim of China Europe International Business School, and Thierry Nadisic of Emlyon Business School, of “Corporate Social Responsibility and Employee Engagement: The Moderating Role of CSR-Specific Relative Autonomy and Individualism,” which recently appeared in the Journal of Organizational Behavior.

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