The impact of corporate social behaviour and monetary incentives on organizational commitment : a comparison between the Netherlands, the USA and India

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The impact of corporate social

behaviour and monetary incentives on

organizational commitment

A comparison between the Netherlands, the USA and India

Abstract:

The present study investigates the effect between internal and external CSR on the organizational commitment of employees with pay satisfaction and attitude towards CSR as moderating variables. Data was collected via the personal and professional network of the researcher and via a paid questionnaire on MTurk. A total of 605 useful online questionnaires were submitted (123 from people working in India, 170 from people working in the USA, 304 from people working in the Netherlands and 8 from people working in another country). The relationships between internal CSR, external CSR, pay satisfaction attitude towards CSR and organizational commitment were examined by means of correlation analysis and regression analysis.

The results show that internal and external CSR have a positive effect on organizational commitment. This means that employees of organizations who believe said organization acts socially responsibly, are more committed to the organization than for organizations where employees don’t believe the organization acts socially responsibly. The results also show that pay satisfaction has a positive moderating effect on the relationship between CSR and organizational commitment. This means that if employees are satisfied with their pay, the effect of CSR on the organizational commitment of the employees will be stronger. The research also found differences between the countries with respect to internal and external CSR, with respect to pay satisfaction of employees and with respect to attitude towards CSR of employees. Implications for practice and theory are discussed. Finally, limitations of the study are explained and suggestions for further research are given. Student: Guus Brouwers 10278648 1st Supervisor: Dr. R.M. Singh 2nd Supervisor

Drs. Ing. A.C.J. Meulemans Amsterdam Business School University of Amsterdam

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The impact of corporate social behaviour and monetary incentives on organizational commitment

Guus Brouwers August 2014

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Content

Content ... 3

1. Introduction ... 5

2. Research Context ... 7

Corporate Social Responsibility ... 7

Stakeholder theory and determining the impact on the organization ... 9

Human Capital ... 10

Human Motivation ... 11

Commitment and Social Identification Theory ... 12

Gender differences ... 13

3. Conceptual Framework ... 14

The effect of CSR on employee commitment ... 14

The moderating effect of a person’s attitude towards CSR ... 16

The moderating effect of Pay Satisfaction ... 17

Visualized model ... 18

4. Research Design and Methodology ... 19

Data collection procedure ... 20

The use of Mechanical Turk ... 20

Sample ... 21

Measures ... 22

Commitment ... 22

Corporate Social Responsibility ... 22

Attitude towards CSR ... 23 Pay Satisfaction ... 23 Control Variables ... 24 Analysis of data ... 24 5. Results ... 28 Correlations ... 28

Relationships and moderating effects ... 31

Overall model ... 31

Regression including country differences ... 32

Mean differences ... 36

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Relationship between CSR and Organizational Commitment ... 42

Moderating effects of attitude towards CSR and Pay Satisfaction ... 42

Country differences ... 43

Theoretical implications ... 45

Practical implications ... 46

Limitations and suggestions for future research ... 47

7. Conclusion ... 49

References ... 50

Appendices ... 59

1. Questions ... 59

CSR Questions ... 59

Organizational Commitment questions ... 60

Attitude towards CSR questions ... 61

Pay Satisfaction statements ... 62

2. Graphs of transformed data ... 63

Internal CSR Transformed ... 63

External CSR Transformed ... 65

Organizational Commitment Transformed ... 67

Attitude towards CSR Transformed ... 69

Measures of skewness and Kurtosis ... 73

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1. Introduction

Traditional research explains human motivation from an agency perspective. The basic assumption in agency theory is that people are only motivated by money. (Eisenhardt, 1989). The assumption of monetary incentives as a motivating factor for individuals is also supported in several other studies. Gneezy and Rustichini (2000) for example found that performance of people increases to a certain level when monetary incentives are increased.

These resource-based theories have several similarities with market-based theories. In Porter’s (1979) famous paper about competitive strategies he describes several strategies to get a

competitive advantage. One is cost leadership based upon the assumption that you can get market share by producing at low costs and provide consumers a cheaper product than your competitors. This shows that money is an important driver for people to pursue an activity. The resource-based theory shows that people are willing to do more when a monetary incentive is promised. Second, the market based theory shows that the lower price of a product could be an important factor in the customers decision whether to buy a product or not.

In the last few decades several events have been observed that call out for a more socially responsible attitude from organizations instead of just maximizing their profits. Examples are the world financial crisis in 2008 and the phenomenon of global warming that causes climate change. According to Metz (2011), the Earth’s climate (change) is the result of several factors:

 Radiation from the sun and the position of the earth relative to the sun  Reflectivity of the Earth (albedo)

 Reflection of sunlight by clouds and fine particles  Greenhouse gases

As a result of this, there are a number of changes that are projected to occur by the end of the century, including a reduced snow cover, an increase of summer thaw in permanent frost areas, strong reduction in summer Arctic ice cover, more heat waves and heavy precipitation, stronger

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will have an impact on the availability of water, the production of food, the Earth’s ecosystem and as a result of all this it will in the end also affect the health of humans (Metz, 2011).

These scenarios created a growing awareness that we should be careful with our planet and that money isn’t the only important thing in life and business. In the last decade, several studies

investigated the effect CSR of an organization has on their customer behaviour, promoting research from a market-based perspective. These studies showed that CSR has a positive effect on the corporate brand image (Yoon et al., 2006; Hoeffler and Keller, 2002), on customer valuation and loyalty ohr and ebb ms et al., 2007; Barnett, 2007), and on the employer brand (Florida, 2000; Jokinen, 2011; Greening and Turban, 2000; Backhaus et al., 2002; Greening and Turban, 1997). Less research has been conducted to identify relationships between CSR and the internal organization. Because of this, the present study investigates whether the CSR of an organization influences the Organizational Commitment of employees. Collier and Esteban (2007) found a positive relationship between CSR and the organization’s culture; Peterson (2004) found a positive relationship between CSR and employee satisfaction. Brammer (2007) already found a relationship between CSR and affective employee commitment. The present research contributes to the study of Brammer (2007) by including Pay Satisfaction to incorporate the traditional monetary motivators for employees. Second, this study checks if the effects and the mean scores on the variables differ between employees working in The Netherlands, the USA and India.

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2. Research Context

Corporate Social Responsibility

“A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.” (Joseph Hall) “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” (Warren Buffett)

Just two quotes suggesting why it is important for organizations to do business in a responsible way. In the beginning CSR was known as “noblesse oblige” (Mintzberg, 1983). Since then, CSR developed and many definitions of CSR have been created. Devinney (2009) developed a definition, which suggests that a company should operate within the norms and values of society, and contribute to this society. The World Business Council for Sustainable Development uses a more concrete definition of CSR:

“Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.” (Holme and Watts, 2000, p. 6)

The definition from Holme and atts is somewhat similar to the “Triple Bottom ine Theory” stated by Porter & Kramer 6). This theory states that each activity from the organization’s value chain has an impact on the environment and the society the organization is part of. Because of this, an organization should meet three levels of performance if they don’t want to harm their environment and society as a whole. These performance levels are Economic Performance, Social Performance and Environmental Performance (Porter & Kramer, 2006). Furthermore, this theory can be related to Carroll’s (1999) study, were CSR was divided into 4 categories: (1) economic responsibility whereby firms should produce goods and make profits, (2) legal responsibility and (3) ethical responsibility that a firm should do business at least within the laws of society and the legal boundaries provided by this society to contribute to its overall welfare.

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between CSR and the corporate brand image (Yoon et al., 2006; Hoeffler and Keller, 2002), customer valuation and loyalty ohr and ebb ms et al., 2007; Barnett, 2007) which result in better revenues for the organization (Du et al., 2010; Pomering and Dolnicar, 2009; Luo and Bhattacharya, 2006). Because CSR also leads to better Corporate Social Performance, not only is the corporate brand evaluated higher by customers but the value of the employer brand is also positively affected (Florida, 2000; Jokinen, 2011; Greening and Turban, 2000; Backhaus et al., 2002; Greening and Turban, 1997). Furthermore, a positive relationship between CSR and the organization’s culture is identified (Collier and Esteban, 2007).

Although many positive relationships are found for corporate social responsibility there is also a lot of scepticism and criticism around it.“The Social Responsibility of Business is to increase its Profits!” (Friedman, 1970) is a well-known quote. An important criticism of the relationship between CSR and

organizational performance is that it provides opportunity for organizations to gain revenues by pretending that they are socially responsible without actually being so (Pava, 2008). Research has already pointed out that firms are pursuing this opportunity (Luo and Bhattacharya, 2006; Porter and Kramer, 2006). This stems from the idea that being socially responsible is harder and more expensive than not being a socially responsible organization (Du, Bhattacharya, and Sen, 2010) and that there are also studies that point out that purchase behavior isn’t always increasing because of socially responsible behavior (Carrigan and Attalla, 2001; Carrington, Neville and Whitwill, 2010). Most of the criticism could be further explained by dividing them in a long-term view on CSR and short term view of CSR (Carrol and Shabana, 2010). Most criticism targets the short-term view. The short-term view comes mostly from a shareholder perspective. This leads to the fact that the value of investments and assets should be maximized in the shortest possible amount of time; this is the opposite of what CSR stands for (Mullerat, 2010; Broomhill, 2007; Margolis and Walsh, 2003).

Because of the criticism and the broad definitions of CSR into Economic Performance, Social

Performance and Environmental Performance (Porter & Kramer, 2006), Waddock (2008) summarizes several CSR activities into three categories to point out the contribution and relevance of CSR

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activities. The first category is market/economic which contains principal rules of the market like codes of conduct (UN Global Compact, environmental codes of conduct, human rights); get

certifications (for example ISO26000); or build reporting systems to monitor environmental or social issues. Second, civil/society relates to participation in multistakeholder initiatives, the relationship of the organization with watchdogs and activists (for example NGO’s like Greenpeace), the relationship of the organization with the press and how it is rated by different civil rating platforms and institutes. The third and last category is state/government which relates to governmental interactions like the Kyoto protocol. These categories have a parallel with the performance level categories identified for companies to be social responsible (Porter & Kramer, 2006; Carroll, 2003).

Stakeholder theory and determining the impact on the organization

Stakeholder theory states that managers have to make decisions that take into account the interests of all stakeholders (Jensen, 2002). Given the fact that a firm should have a single objective this provides managers with an impossible assignment (Jensen, 2002). These days it is not argued

whether or not organisations have stakeholders (Donaldson and Preston, 1995) but as mentioned by Jensen (2002) it is hardly possible to pay equal

attention to each stakeholder. Therefore Mitchel et al. (1997) developed a framework to determine the possible impact of stakeholders by determining their power, legitimacy and urgency towards the organization. This results in three categories of stakeholders: (1) Latent stakeholders (dormant stakeholders, discretionary stakeholders,

demanding stakeholders), with these stakeholders one of the three attributes is present; (2) Expectant

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present; and (3) Definitive stakeholders where all three attributes are present (Mitchel et al., 1997). With this impact the importance of employees and shareholders is defined in the previous

argumentation of CSR. They will both belong to the category of definitive stakeholders.

Human Capital

People are an important asset of a company, especially for service organizations, not only because of the possible impact they have as stated in stakeholder theory (Mitchel et al., 1997) but also because they have tacit knowledge, which is important for organizational learning (Reber, 1989). This means the way organizations learn from experiences. As organizations are groups of people it pertains especially to learning from experiences that others have, for example when a new employee starts at a new organization the history of which he is not familiar with. Other employees that have worked for several years at the organization have that experience. The new employees can quickly learn best practices from their colleagues instead of learning by making the same mistakes others made in the past evitt & arch 1988). It’s important for an organization to retain this knowledge even as time moves on and employees leave the organization, and develop so called organizational memory (Levitt & March, 1988). A possibility to build up this knowledge and to keep it within the organization is to use information technology systems to store data and information and make those available to employees (Stein & Zwass, 1995). A second possibility to keep this information within the

organizations is to build so called communities of practice. These are groups of employees that meet frequently to share knowledge and experiences with one another (Eckert, 2006). Second,

organizational learning is important to adapt to a changing environment. Adapting to changing environments is a dynamic capability (Teece, 2007). If an organization has the ability to adapt to changes in the environment, for example changing customer demands or technical opportunities, it can help the organization to get and maintain a sustained competitive advantage. Asset specificity, social complexity and causal ambiguity help organizations to create a unique human capital. Asset specificity relates to tacit knowledge (Reber, 1989): is this knowledge specific to the organization or does the employee have general knowledge and skills that can also add value to other organizations

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(Coff, 1997). Social complexity refers to the connection between the employee and the firm, and the internal and external social networks of the employee (Coff, 1997). Causal ambiguity deals with the factors that contribute to the success or failure of the individual. When we relate the three

characteristics of human assets to the VRIN criteria of the resource based view (Barney, 1991) it becomes clear what the importance of human capital is for an organization. Specific characteristics of the firm and an employee can make the knowledge and skills of an employee Rare, Inimitable and Non-Substitutable. When a resource is rare (in this case the knowledge and skills of the employee) it means that other organizations can’t easily get the resource, so they have to try to imitate the resource or find a substitute. If the resource is also hard to imitate (inimitable) and there is no substitute available (non-substitutable) it can give an organization a (sustained) competitive advantage (Barney, 1991). Finally, the causal ambiguity and social complexity as described by Coff (1997) makes it hard to define what makes the employee successful at their firm and therefore this becomes difficult to imitate by competitors.

Human Motivation

The assumption of agency theory is that people are only motivated by money (Eisenhardt, 1989). Eisenberger et al. (1999) performed a study among students on the effect of giving a monetary incentive to meet a performance standard. Their results show that it has a positive effect on the perceived self-determination and competence, expressed task enjoyment and free time spent on a task. Furthermore, research shows giving a fair monetary reward has a positive parabolic effect on the amount of work and the quality of work people deliver (Gneezy and Rustichini, 2000). Further it has been shown that Pay Satisfaction lowers the turnover intentions of employees (Dailey and Kirk 1992; DeConinck and Stilwell, 2004; Motowidlo, 1983; Lum et al., 1998). Tekleab et al. (2005) reported that the satisfaction with the pay raise is an important predictor of turnover intentions while the satisfaction with the level of pay is not. But not all people are the same, people differ because of things that they have experienced in their lives (Grant, 1996; Pinker, 2002; Rothaermel

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these employees are more sensitive to monetary incentives and (2) employees who are (strong) reciprocators, these employees are not motivated by money but more sensitive to justice. The perception of procedural and distributive justice influences how an employee evaluates the

organization (Thibaut and Walker, 1975). Herzberg (1968) states that people are not only motivated by money but also by interesting work, challenge and increasing responsibility. This contributes to Alvesson and Kärreman (2004) who describe the organization as a social system, where employees are motivated because they feel a connection with the values of the organisation. How much of a connection an employee experiences with the organization depends on a person’s personality skills and knowledge and can therefore differ between employees (Foss, 2007, Sanchez-Burks and Lee, 2007). These studies show that there are many possibilities to motivate people but that Pay Satisfaction is an important aspect to retain employees.

Commitment and Social Identification Theory

Commitment of employees can be divided into three categories. These three categories are (1) affective commitment, this relates to the emotional attraction and desire for a person to work for the organization and how much they can identify themselves with the organisation; (2) continuance commitment, which states the effort and possible costs related to leaving the organisation; and (3) normative commitment, which which reflects the likelyhood that a person will continue working at the organization (Meyer and Allen, 1991). Other research has pointed out that the most significant predictor of person related behaviour and well being are: Health, work/non-work conflict, stress, attendance and job performance (Meyer et al., 2002).

Another important part predicting commitment is social identification. Alvesson and Kärreman (2004) describe organizations as entities with social aspects important for employee motivation. This relates to social identity theory where individuals see themselves as part of a social category

(Ashforth and Mael, 1989; Hogg and Abrams, 1988; Tajfel and Turner, 1986; Turner, 1985). This means an individual is affected by the social group(s) they are part of, including the organization they are employed with (Ashforth and Mael, 1989; Tajfel and Turner, 1986; Turner, 1985). If a person can

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identify themself with the group or organization it results in a better view and opinion about themself. If a person can’t identify with the values of the group it results in a lower self-esteem (Dutton et al., 1994: 233–4). For this reason social identity theory states that an employee prefers to work for an organization that is more responsible and has a better image because it improves the person’s self-esteem (Maignan and Ferrell, 2001; Tajfel and Turner, 1985). This also relates to theories that show a positive effect of CSR on corporate brand image (Yoon et al., 2006; Hoeffler and Keller, 2002) and customer valuation and loyalty ohr and ebb ms et al., 2007; Barnett, 2007).

Gender differences

Previous research points out that values and attitudes are different for men and woman (Greening and Turban, 2000; Papamarcos and Sama, 1998). Women are more sensitive to discretionary behaviour within an organisation while men are more likely to value tangible and economic items (Ibrahim and Angelidis, 1994; Smith et al., 2001). Peterson (2004) found that the relationship between discretionary corporate social relationship measures and commitment is stronger for women than it is for men, and philanthropic activities pursued by the organisation are valued more by women than by men (Roberts, 1993).

Other studies have shown that women are discriminated against within organisations, are less represented within positions at the board or management (Singh et al., 2001), and that payment between men and women is unequal (Sweeney and McFarlin, 1993). The suggestion would be that because women experience gender discrimination they will have a stronger valuation for ethical issues (Smith et al., 2001).

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3. Conceptual Framework

In this chapter the conceptual framework of this research will be explained. This framework will link the theoretical background and results from previous studies with the hypotheses of this study. The final paragraph of this chapter will contain a visualization of the framework and the hypotheses.

The effect of CSR on employee commitment

Looking at the last decade there has been a lot of activity on charity for issues happening in society. To give one of the most successful examples we can take the collection of money to finance the research on cancer. Some huge successes were achieved by charity organizations Livestrong1 (before Lance Armstrong admitted he used doping), Pink Ribbon2 and Alpe d’Huzes3. Looking at research from a market-based perspective there have been found several relationships for CSR. The brand image of the organization is more positive for organizations that behave socially responsible oon et al. 6 Hoe er and Keller ) and that customers are more loyal to organiza ons that behave socially responsible ohr and ebb ms et al., 2007; Barnett, 2007). These findings show that people support socially responsible behaviour by organizations. Looking at research from a resource based perspective a positive relationship is identified between CSR and job satisfaction (Peterson, 2004). Also, a positive relationship is identified between CSR and employee affective commitment (Brammer 2007). The current study distinguishes between external CSR and internal CSR. External CSR refers to how the organization contributes to the community they are a part of, specifically the interaction between their physical environment, government and their ethical attitude towards customers and other stakeholders that go beyond the legal minimum (Carroll, 1979). The current study measures the external CSR of an organization as a perception of its own employees. They may base their opinion about the organization’s external CSR not only on their own information, experience and the information they get from internal sources, but also on external information sources like the media (Gilly and Wolfenbarger, 1998; Maignan and Ferrell, 2001). 1 http://www.livestrong.org 2 http://www.pinkribbon.org

3 http://www.opgevenisgeenoptie.nl

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Internal CSR contains questions with regards to employee’s work-life balance, changes for further education and how managerial decisions impact employees. Because training could benefit the organization and the individual and may enhance transferable skills that could also contribute to another organization if an employee decides to leave, it can be determined as socially responsible (Brammer, 2007; Finegold and Wagner, 2002; Hoque, 2003). Managerial decisions can be seen as procedural justice and refers to how organizations and their representatives make allocation decisions (Brammer, 2007; Tepper and Taylor, 2003: 97) and can be placed in the domain of ethical citizenship (Brammer, 2007; Maignan and Ferrell, 2001). Because of the posi ve rela ons iden ed between CSR and the behaviour of people whether it is from a market based perspec ve or a resource based perspec ve Brammer Peterson ohr and ebb ms et al., 2007; Barnett, 2007; Yoon et al., 2006; Hoeffler and Keller, 2002) a positive relationship between CSR and Organizational Commitment is expected.

Hypothesis 1: There is a positive relationship between internal CSR and employee commitment. Hypothesis 2: There is a positive relationship between external CSR and employee commitment.

Agency theory states that people are self interested and motivated by money (Eisenhardt, 1989). Other studies show that monetary incentives are an important motivation for people to perform a task requested by an organization or another person (Gneezy and Rustichini, 2000). When the monetary incentives are unsatisfactory for an employee, the intentions for turnover and actual turnover increases (Dailey and Kirk 1992; DeConinck and Stilwell, 2004; Motowidlo, 1983; Lum et al., 1998). Although, people are motivated by money, they could also be motivated by other factors like interesting work, challenging work and more responsibility (Herzberg, 1968) the common part in these studies is that the motivating factors are all direct benefits or experiences to the employees. A study to voluntary activities among the Dutch people shows that approximately 45% of the people in the Netherlands performs voluntary activities (Houben – van Herten & te Riele, 2011). Looking at this

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Furthermore, research on motivational systems shows that most employees are self interested or reciprocal (Bridoux, 2011; Kuhlman & Wimberley, 1976; Liebrand, 1984; Liebrand, Jan- sen, Rijken, & Suhre, 1986). Because the internal CSR activities directly affect employees it is expected that the relationship between Internal CSR and Organizational Commitment is stronger compared to the relationship between External CSR and Organizational Commitment.

Hypothesis 3: The relationship between internal CSR and employee commitment will be stronger than for external CSR and employee commitment.

The moderating effect of a person’s attitude towards CSR

Psychological research shows that identification is an important aspect for people in deciding to become part of a group (Hogg and Turner, 1985). A social group is an important part of people’s lives (Hogg and Turner, 1985). This is because individuals see themselves as part of a social category (Ashforth and Mael, 1989; Hogg and Abrams, 1988; Tajfel and Turner, 1986;Turner, 1985). As explained in the literature review, the social groups that they’re a part of affect people. An

organization can also be considered to be a social group (Ashforth and Mael, 1989; Tajfel and Turner, 1986; Turner, 1985). Many people are working full-time which means they are within their

organization 5 days a week, this means that a great amount of time is spent with the people of their company. Alvesson and Karreman (2004) provide a great example while explaining the socio

ideological control system. They describe a professional organization where the control system mainly exists of peer reviewing. Because none of the employees want a peer to think that they are not performing well it motivates them to get the best out of themselves and therefore contribute to the success of the organization. Psychological research further states that if a person can identify himself or herself with the group or organisation they are part of, it results in a better view and opinion about themselves. On the other hand when the person can’t identify him- or herself with the values of the group it results in a lower self-esteem (Dutton et al., 1994: 233–4). Social identity theory states that an employee prefers to work for an organization that is more responsible and has

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a better image because it improves the person’s self-esteem (Maignan and Ferrell, 2001; Tajfel and Turner, 1985). For this reason it is expected that people that believe CSR is important feel more commitment to an organization that is doing a great performance on social responsibility.

Hypothesis 4: The relation between CSR and Organizational Commitment is stronger for people that have a positive attitude towards CSR.

The moderating effect of Pay Satisfaction

Looking at human motivation an early theory is the agency theory that describes the conflict of interest between the principal and the agent. An assumption in this theory is that people are purely motivated by money and eager to pursue their own interests (Eisenhardt, 1989). Later research rejects the assumptions that people are only looking at their own interest. Bridoux (2011) describes three categories of people (1) self-interested people, (2) reciprocators and (3) strong reciprocators. Self-interested people confirm the assumption of agency theory. Reciprocators on the other hand are people that don’t feel comfortable if the rewards within the group aren’t fair. They will become demotivated. Strong reciprocators are even willing to punish or reward on their own cost. This means they would be willing to give a part of their own incentive to people that don’t get the reward they deserve or punish the person(s) that are over-rewarded for their contribution.

Although people are not only motivated by money, research has shown that it is an important motivator for people to make an effort. An experimental research showed that when a reward was promised to people their performance, in this case the amount of work completed was rising till a certain point and then stabilized. On the other hand the experiment showed that when the pay-off was wrong and/or too low the performance was even lower than when it was clear that there

wouldn’t be a reward at all Gneezy and Rustichini ). Further, it shows that Pay Satisfaction is an important factor that lowers the turnover intentions and actual turnover of employees (Dailey and Kirk 1992; DeConinck and Stilwell, 2004; Motowidlo, 1983; Lum et al., 1998). Tekleab et al. (2005)

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pay raise is an important predictor of turn-over while the level of pay is not. The common part that can be derived from all of these studies is fairness in reward systems. When this reward is perceived as unfair the motivation of employee’s drops. That is why this study expects a positive effect from perceived pay fairness on the relationship between CSR and Organizational Commitment.

Hypothesis 5: The relation between CSR and Organizational Commitment is stronger for people that perceive a fair pay than for people who don’t.

Visualized model

Based upon the previously stated hypotheses the conceptual model of this study will be the following:

1. The effect of internal and external CSR on organizational commitment. 2. The moderating effect of personal attitude towards CSR and perceived pay

fairness on the relationship between CSR and Organizational Commitment.

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4. Research Design and Methodology

This study investigates the relationship between the corporate social responsibility of an organization and the commitment of employees towards the organization. To check this relationship, the current research includes the employees’ attitude towards CSR and the employees’ satisfaction with their level of pay as moderating variables. This chapter outlines the procedures used to perform this research. Furthermore, the sample size and method of the research are explained.

To research the relationship between these variables a quantitative research method is used. The research has a positivistic and deductive approach, which uses quantifiable data to declare the relationship between the variables (Saunders, Lewis and Thornhill, 2009). To identify the causal relationship between the variables the explanatory research approach is used (Saunders, Lewis and Thornhill, 2009). For this study an online questionnaire based survey strategy is used. The advantages of this strategy are that it can yield large datasets; it increases the reliability of the response and therefore the research (Saunders et al., 2009). Furthermore it allows to spread the questionnaire among multiple populations which makes it easier to generalize the outcomes (Saunders et al., 2009); and finally, respondents can take the survey at any time increasing the number of

respondents. Because the respondents can fill-out the survey whenever they want, it is not possible to influence the respondents, which increases the reliability of the research (Saunders et al., 2009). Disadvantages of the questionnaire method are that a respondent would like to have further explanation on an answer which cannot be provided when they are filling out the questionnaire; second, there is a risk that the respondents are not focused or are distracted when they are filling out the questionnaire or just filling out the questionnaire as a favour instead of being completely serious about filling out the questionnaire (Saunders et al., 2009).

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Data collection procedure

To collect the data for this research the online professional survey tool Qualtrics4 provided by the University of Amsterdam was used. The data was collected via a direct mail to the researcher’s personal network and the alumni network of the researcher’s bachelor study. The e-mails included a request that the receivers should distribute the survey within their network which created a snowball effect. Second, the survey was posted within several LinkedIn groups. This distribution was focussed to gather data from employees working in the Netherlands (the e-mail was sent directly to 1030 people). To gather data from employees working in other countries the questionnaire was distributed via Amazon’s workers platform Mechanical Turk. To make it possible to gather

appropriate data from employees within all educational levels, the questionnaire distributed via the researcher’s network was translated into Dutch via translate/back translate using Google’s

translation service “Google Translate”. Some manual changes were made to the translations and 3 people reviewed them to check if they were understood correctly leading to some textual changes. When the translations were in place a group of 5 people tested the questionnaire. This resulted in the removal of some questions to reduce the time spent on the questionnaire. The workers at Mechanical Turk filled out an English version of the questionnaire. You can find the English and Dutch versions in appendix 1. A reward of $0,35 was provided for each filled out questionnaire at

Mechanical Turk; no reward was provided to the Dutch respondents.

The use of Mechanical Turk

Mechanical Turk5 is a platform founded by Amazon.com in . Its purpose is to “crowd-source” labour intensive tasks. Currently it also provides the possibility to distribute research. The mechanism is that work providers enable workers to perform HIT’s acronym for Human Intelligence Tasks) for a reward. Most workers on MTurk are from the United States and India (Paolacci, Chandler and

Ipeirotis, 2010). It was shown that there is a very low chance (2,4%) of double respondents on MTurk

4

http://www.qualtrics.com/research-suite/

5

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Berinsky et al. 1 ). echanical Turk provides a lower “no response” rate among respondents in comparison to traditional data gathering methods (Paolacci, Chandler and Ipeirotis, 2010; Berinsky et al., 2012) and a lower failure rate among respondents (Paolacci, Chandler and Ipeirotis, 2010;

Berinsky et al., 2012). MTurk is a viable alternative for data collection and reduces threats to validity (Paolacci, Chandler and Ipeirotis, 2010).

Sample

The research sample consists of working people with a particular focus on people working in the Netherlands, India and the USA. The distribution methods resulted in a total response of 795

respondents. After removing the incomplete questionnaires and unemployed respondents it resulted in a sample of 605 employees. The characteristics of gender and country for this sample are shown in Table 1.

Table 1: Overview of Sample

India USA The Netherlands Other Together

Men 77 96 165 4 342

Women 46 74 139 4 263

Total 123 170 304 8 605

Note. n=605

This sample is large enough for this research and sufficient to make a comparison between The Netherlands, India and the USA.

A further analysis of the sample shows a relatively high level of education. For The Netherlands 87% finished their fourth year of college or had a higher level of education (HBO or higher level of education) this is much higher than the average in the Netherlands which is 35% (CBS, 2012). For India 93% had finished the fourth year of college or a higher level of education (no characteristics for educational level of India could be found) and for the USA 56% of the respondents finished the fourth year of college or a higher level of education (no characteristics for educational level of the

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USA could be found). This means that the results of this study can be applied to higher educated employees.

Measures

In this section the items measured in this study will be explained. All items are obtained from previous research. The original items are in English and these original items were used for the

questionnaire exposed to employees in India and the USA. For the Dutch respondents the items were translated into Dutch. To be sure that the items match the original, the items were translated using Google Translate, inspected carefully by the researcher and double-checked by other people and translated back via Google Translate to English to verify if it still matched the original items.

Commitment

In this study commitment is defined as Organizational Commitment. To measure Organizational Commitment the scale of Mowday and Steers (1979) was used. This is an older and widely tested scale containing questions that test (1) affective commitment, (2) continuance commitment and (3) normative commitment (Meyer and Allen, 1991). Originally the items were measured on a 7-point Likert scale. This study also uses a 7-point Likert scale. Some items of the original scale were

removed. Only items relevant for this study were included. An example question of this scale is: “I am willing to put in a great deal of effort beyond that normally expected in order to help this

organization be successful”. The -point Likert scale was distributed from “strongly disagree” to “strongly agree”. owday and Steers 19 9) tested this scale with several groups reporting a reliability range from α 8 to α 93. This study reports a reliability of 86 .

Corporate Social Responsibility

In this study CSR was measured as a perception of the employee themself. To measure this, the relatively new scale from Turker (2009) was used. The original scale uses a 7-point Likert scale distributed from “strongly disagree” to “strongly agree”. This study also used a -point Likert scale. Some items of the original scale were removed. Only items relevant for this study were included. The scale of Turker (2009) distinguishes 4 factors described as 4 categories of CSR. These categories are:

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(1) CSR to society reporting a reliability of α 891 ) CSR to employees reporting a reliability of α 8836 3) CSR to customers reporting a reliability of α 8 and ) CSR to the government reporting a reliability of α 9 9. An example question in this scale is “Our Company participates in activities which aim to protect and improve the quality of the natural environment”. In Turker’s 9) study and the present study CSR to employees is reflecting “internal CSR”. CSR to society CSR to customers and CSR to the government together are reflecting “external CSR”. This study reports a reliability of 0,883.

Attitude towards CSR

In this study attitude towards CSR was measured with the perceived role of ethics and social responsibility (PRESOR) scale of Singapakhdi (1996). In the original scale the items were measured using a 9-point Likert scale distributed from “strongly disagree” to “strongly agree”. Because other items were measured on a 7-point scale, the scales of all items were kept the equal in this study to measure the effect and not confuse the respondents with different rating scales. The 7-point Likert scale was distributed from “strongly disagree” to “strongly agree”. Some items of the original scale were removed. Only items relevant for this study were included. An example statement of this scale is “Being ethical and socially responsible is the most important thing a firm can do”. The scale reports a kaiser-meyer-olkin measure of 0,81. This study reports a reliability of α 8 3.

Pay Satisfaction

In this study Pay Satisfaction is measured with the Pay Satisfaction scale from Heneman & Schwab (1985). The original study from Heneman & Schwab (1985) uses a 5-point Likert scale distributed from “very dissatisfied” to “very satisfied” to measure Pay Satisfaction. Because other items were measured on a 7-point scale, the scales of all items in this study were kept equal to measure the effect and not confuse the respondents with different rating scales. Some items of the original scale were removed. Only items relevant for this study were included. The item scale distinguishes 4 factors and reliability was tested on 2 sample groups. The distinguished factors are (1) satisfaction

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reporting a reliability of α 9 and α 9 3) satisfaction with the pay raise and reporting a

reliability of α 8 and α 81 ) satisfaction with the structure and administration of pay reporting a reliability of α 8 and α 88. An example statement of this scale were the employee should rate his satisfaction on is “ y benefit package”. This study reports a reliability of α 9 .

Control Variables

The present study contains five control variables. The variables are (1) country of employment using an open text field, (2) the age of the respondent distinguished in 5 categories, (3) the level of the respondents highest completed education containing 10 options, (4) the respondents educational background distinguished in 10 categories plus one option “other” and (5) how long the respondent is currently working at their company including an option for “unemployed”.

Analysis of data

The method resulted in 795 submitted surveys. An analysis of the level of completion showed 179 incomplete surveys. All had more than 10% missing values and have therefore been removed. A second check on the time working at their company showed 11 unemployed respondents. They have also been removed because they don’t belong to the target group of this study. This resulted in a total of 605 usable questionnaires. The respondents can be divided in 3 significant groups of

countries that people were working in; India (123), The USA (170) and The Netherlands (304). There were 8 respondents who were working in another or multiple countries and who therefore don’t belong to these three groups.

The first step in the analysis of the data was recoding the reversed items. Specifically these were the items 6, 8 and 11 of the Organizational Commitment construct.

Second the reliability of the scales was measured. A reliability of α 883 was reported for CSR when separated in internal and external CSR a reliability of α 16 was reported for Internal CSR and a reliability of α 8 was reported for External CSR. A reliability of α 86 was reported for Organizational Commitment and a reliability of α 9 was reported for Pay Satisfaction. The reliability analysis shows that the scales are sufficiently reliable. For attitude towards CSR the first

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reliability measured was 0,675. Item 7 was removed to get at least a reliability of 0,701 which is the minimum required for reliability. The reliability analysis was run a second time showing that item 2 had a correlation close to 0 with the rest of the scale and if the item was removed the reliability would become 0,747. Therefore item 2 was removed. The reliability analysis was run a third time showing a correlation close to 0 for item 4 and a reliability of 0,843 if the item would be removed and hence this item was also dropped. For an overview of the constructs see Table 2. The next step was to compute the variables. Internal CSR was computed as the mean of the items 7, 8 and 9 from Turker’s 9) CSR scale. External CSR was computed as the mean of the items 1, 2, 3, 4, 5, 6, 10, 11, 12, 13 from Turker’s (2009) CSR scale. Organizational Commitment was computed as the mean of all used items of Mowday and Steers (1979) Organizational Commitment scale. Attitude towards CSR was computed as the mean of items 1, 3, 5, 6, 8, 9, 10 of Singapakhdi’s (1996) perceived role of ethics and CSR scale. Pay Satisfaction was computed as the mean of all used items of Heneman & Schwab’s (1985) Pay Satisfaction scale.

Table 2: Overview of constructs

After calculating the variables the distribution of these variables were checked using the

Kolmogorov-Smirnov test and the Shapiro-Wilk test. Because a comparison is made between three groups of countries the normality of the distribution had to be checked within these groups. Therefore dummy variables were created for India, USA and The Netherlands. A significant result of negative skewness was reported on all variables via the Kolmogorov-Smirnov test, the Shapiro-Wilk test, and through visual examination of the histograms. This resulted in transformation of the data.

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External CSR, Organizational Commitment, Attitude towards CSR and Pay Satisfaction are transformed using the formula SQRT(8-X) in SPSS. The statistical test only reports a significant skewness -1,96 < z < 1,96 (p<0.5) for External CSR within the Netherlands (z= -2,40) and for Attitude towards CSR within India (z= -2,01). This has been calculated Statistic/Std. Error because large samples quickly show a significant skewness because of the high power. So normal distribution is assumed for the transformed variables. See Appendix 2 for the graphs and statistics of the transformed variables.

The relationships between Internal CSR, External CSR, Organizational Commitment, Attitude towards CSR and Pay Satisfaction were assessed by means of correlation and hierarchical regression. To examine the hypothesized moderation effects between the variables, regression analyses were performed. The first regressions contained all respondents (n=605); no control variables were included. For the second regression the control variables were included except for the check on country differences. After the second regression the respondents that belonged to a country other than India, The Netherlands or the USA were removed because they would be outliers for the country comparison. In total these were 8 respondents, which lead to a new dataset n=597. After that the third regression was performed. This regression didn’t include any control variables to check if there was any significant difference with regression 1. After that a fourth regression analysis was performed containing control variables and dummy variables for the Netherlands and the USA to see if there would be differences between the countries. All four regressions contained 11 steps starting with a linear regression to examine the effect of the independent variables on Organizational Commitment, as well as the effect of internal CSR and External CSR on Organizational Commitment with attitude towards CSR and Pay Satisfaction as an individual mediator; the last two steps

examined the effect of internal CSR and External CSR on Organizational Commitment with attitude towards CSR and Pay Satisfaction included at the same time to check the combined mediation effect.

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To perform the moderating regressions the SPSS add-on “Process”6 was used. To perform the individual moderations of attitude towards CSR and Pay Satisfaction, process model 1 was selected. To perform the moderating effect of the two moderators together, process model 2 was selected. After testing the relationships stated within the theoretical framework there were some additional tests performed with the data. Pay Satisfaction was split up into the factors benefits, level of pay, pay raise and structure/administration of pay to check which factor of Pay Satisfaction has the highest impact on the relationship between CSR and Organizational Commitment. These factors were already identified by Heneman & Schwab (1985). After splitting the scale up into these factors the new variables were checked for normality. These variables were also negatively skewed so they were transformed in the following way: LG10 Benefits, LG10 level of pay, SQRT pay raise and SQRT

administration/structure of pay. After the transformation the same regressions were performed for each of the factors as for Pay Satisfaction to compare the differences. Finally, T-tests were performed with the transformed variables Internal CSR, External CSR, Pay Satisfaction and attitude towards CSR to check if there were differences in the scores between The Netherlands, the USA and India; there were also T-tests performed to check if there were differences between men and women for internal CSR, External CSR, Pay Satisfaction and attitude towards CSR.

Finally the regression analyses were checked for multicollinearity issues. Field (2009) states that if the VIF is less than 10 and the tolerance is above 0,1 there are no collinearity issues. For all variables, the VIF was 2 or less and the tolerance was 0,5 or greater. This means that there are no collinearity issues for this study. This check also included the moderating variables.

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5. Results

This chapter reports the results of the data analysis. Table 3 presents the means, standard deviations, correlations and reliability of the variables. The descriptive statistics showed skewness for all

variables, which have been solved by using transformations. For the transformed variables a normal distribution was assumed. The total sample size was 605. Of the respondents 20% were working in India, 28% were working in the USA, 20% were working in the Netherlands and 3% were working in another country. 56% of the respondents were male and 44% were female. The age of the

respondents is distributed as follows: 0,3% was younger than 20 years, 59,7% was between 20 and 35 years old, 29,3% was between 35 and 50 years old, 10,2% was between 50 and 65 years old and 0,5% was older than 65 years. For other characteristics such as the background of the education and the level of education from the sample population see appendix 3.

Correlations

Table 3 presents the correlations between the variables of the research model. As expected there is a significant correlation for Organizational Commitment with internal CSR (r=0,617, p<0,01) and External CSR (r=0,510, p<0,01). Also a strong correlation for external CSR with Internal CSR (r=0,634, p<0,01) was found. This is expected because they are from the same scale with a good reliability α 0,883). It seems that Organizational Commitment has a significant relationship with all variables. This is interesting because no direct relationship was expected with attitude towards CSR, because it doesn’t seems logical that a person’s attitude towards the independent variable would have a direct relationship with the independent variable.

In addition to the correlations between the variables of the research model, table 3 also presents the correlations between the control variables. Furthermore it shows the correlations between the control variables and the variables of the research model. Some interesting correlations here are the significant correlation of the Netherlands with External CSR (r=0,160, p<0,01). This might indicate that the country of an organization is related to the amount of External CSR activities. Another interesting correlation is the negative correlation between the levels of education with external CSR

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(r=-0,104, p=<0,05). This could be an indicator that the level of education of an employee influences his perception of the organization’s external CSR activities. There also seems to be a negative correlation of age with Organizational Commitment (r=-0,112, p<0,01). This might be an indicator that younger people are more committed to their organization compared to older people. Which is interesting because others (Hanlon, 1986; Crawford, 1999) show a positive relationship between age and commitment and Feldman (1982) shows a negative relationship between age and turnover intention. Furthermore a positive correlation of The Netherlands with attitude towards CSR is found (r=0,227, p<0,01). This might indicate that people in The Netherlands believe that CSR is more important than people working in India or the USA. Another interesting correlation is The USA with Pay Satisfaction (r=0,121, p<0,01). This might indicate that people working in the USA are more satisfied with their pay than people working in The Netherlands or India.

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M SD 1 2 3 4 5 6 7 8 9 10 11 12 1. Internal CSR 5.2336 1.13808 (,716) 2. External CSR 4.9813 1.02558 0,634** (,857) 3. Organizational Commitment 4.8388 1.01849 0,617** 0,510** (,862) 4. Attitude towards CSR 5.2744 0.87741 0,353** 0,451** 0,359** (,843) 5. Pay Satisfaction 4.8347 1.13782 0,540** 0,463** 0,499** 0,297** (,952) 6. Country Dummy NL 0.5092 0.50033 0,071 0,160** -0,007 0,227** 0.051 (-)

7. Country Dummy USA 0.2848 0.45168 0,070 0,065 0,028 -0,096* 0,121** -0,643** (-)

8. Gender 0.43 0.496 0,002 0,009 -0,041 -0,097* 0.044 0,048 0.002 (-)

9. Age 2.51 0.701 0,007 0,055 -0,112** 0,005 -0.039 0,248** -0,099* 0.021 (-)

10. Highest Completed Education 7.26 1.77 -0,121 -0,104* -0,069 -0,079 -0,080 0,023 -0,240** -0,026 0.052 (-)

11. Background of the Study 6.35 3.134 -0.044 0,007 -0,014 0,066 -0,027 -0,122 0,119** -0,116** -0,028 0,154** (-)

12. Time working at the Company 1.92 1.018 0,040 0,077 -0,040 0,031 -0,063 0,105* -0,041 -0,013 0,465** 0,024 -0.065 (-)

Note. N=597, Correlations with ** are significant at p<0,01 (two-tailed). Correlations with * are significant at p<0.05 (two-tailed) Reliabilities are positioned on the diagonal.

Va l ue l a bel s of ca tegori ca l va ri a bl es : Gender: 0='Ma l e', 1='Fema l e'. Age: 1='20yea rs or younger', 2='Between 20 a nd 35 yea rs ol d', 3='Between 35 a nd 50 yea rs ol d' 4='Between 50 a nd 65 yea rs ol d', 5='65 yea rs or ol der'. Hi ghes t Compl eted Educa tion: 1='Ha ven't gra dua ted hi gh s chool ', 2='GED', 3='Hi gh s chool gra dua te', 4='Fi rs t yea r of col l ege', 5='Second yea r of col l ege', 6='Thi rd yea r of col l ege', 7='Fourth yea r of col l ege', 8='Ba chel ors ', 9='Ma s ters ', 10='Doctora te'. Ba ckground of the s tudy: 1='Tea chi ng a nd Educa tion', 2='La ngua ge a nd Communi ca tion', 3='Arts a nd Cul ture', 4='La w a nd Governa nce', 5='Economy a nd Ma na gement', 6='Beha vi or a nd Soci ety', 7='Hea l th', 8='Ea rth a nd Envi ronment', 9='Exa ct a nd Informa tics ', 10='Techni cs a nd Chemi s try', 11='Other'. Ti me Worki ng a t the Compa ny: 1='3 yea rs or l es s ', 2='3-10 yea rs ', 3='10-15 yea rs ', 4='15-20 yea rs ', 5='20 yea rs or more'.

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In this section the relationships and moderating effects of the conceptual model are explained. First the regressions were performed without the control variables. In these regressions the total sample of 605 respondents was included. The results of these regression analyses are reported in table 4 and 5. After this, the respondents from the category others were excluded because they would be

outliers in the country comparison. Furthermore the control variables were included in the second regression analysis. The results of these regressions are reported in table 6 and 7.

Overall model

In table 4 a positive relationship is reported for Internal CSR on Organizational Commitment and also for External CSR on Organizational Commitment. This is in line with Brammer’s ) study and supports hypotheses 1 and 2 that internal and external CSR have a positive effect on Organizational Commitment. Looking at the coefficients of Internal CSR on Organizational Commitment and External CSR on Organizational Commitment (regressions 1, 2 and 3 of table 4) the coefficient for Internal CSR is greater than the coefficient of External CSR. This supports hypothesis 3 that the effect of Internal CSR on Organizational Commitment is greater than the effect of External CSR on Organizational Commitment. In regression 6 and 7 of table 4 there was no positive moderating effect reported for attitude towards CSR on the effect that Internal and External CSR have on organizational support. This means there is no support for hypothesis 4: that the effect of CSR on Organizational

Commitment is stronger for people that have a positive attitude towards CSR. Regression 8 and 9 of table 4 report a moderating effect for Pay Satisfaction on the relationship that internal CSR and external CSR have on Organizational Commitment. This supports hypothesis 5. Looking at regression 10 and 11 of table 4, which includes the full model with both moderators, we see a significant moderating effect for attitude towards CSR on the relationship between internal CSR and

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that if an organization is more socially responsible this doesn’t lead to a higher feeling of

Organizational Commitment for employees who believe it is important that an organization is acting socially responsible.

Regression including country differences

Tables 6 and 7 exclude the respondents that were not working in The Netherlands, India or the USA because they are outliers in this study. Looking at table 6 and 7, the variables Internal CSR, External CSR, Pay Satisfaction and attitude towards CSR mostly show a significant positive effect on

Organizational Commitment in both tables 6 and 7. The interactions Internal CSR x Pay Satisfaction and External CSR x Pay Satisfaction show a significant positive effect in both tables 6 and 7. This means that the control variables do not change the significance of the relationship between the predictor variables (Internal and External CSR) and the outcome variable (Organizational

Commitment); they also do not change the effect of the moderating variables (attitude towards CSR and Pay Satisfaction) on the relationship between the predictor variables (internal and external CSR) and the outcome variable (Organizational Commitment). There is one exception for regression 9 where external CSR is significant at p<0.1 in table 6 and not significant at all in table 7. Furthermore, in table 7 the control variables are included; therefore the results in table 7 are more interesting because they are more reliable than the results in table 6. For this reason the results will be explained based on table 7.

Table 7 shows that the Beta coefficient for Internal CSR is always >/= 0 with a maximum of 1,027 (p<0,01), which means that an increase 1 in the log of Internal CSR results in a maximum increase of 1,027 of the square root in Organizational Commitment. This supports hypothesis 1 that Internal CSR has a positive relations with Organizational Commitment which is in line with Brammer’s ) study. Table 7 also shows that the Beta for external CSR is always >/= 0 with a maximum of 0,642 (p<0,01) which means that an increase of 1 in the square root of external CSR results in a maximum increase of 0,642 in the square root of Organizational Commitment. This supports hypothesis 2 that external CSR has a positive effect on Organizational Commitment which is in line with Brammer’s

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(2007) study. Regression 3 shows that the Beta coefficient for Internal CSR (0,779) is 2,6 times larger than the Beta coefficient for External CSR. This indicates that the effect of Internal CSR might be stronger compared to the effect of External CSR, which supports hypothesis 3.This means that Internal CSR has a more positive effect on the Organizational Commitment than External CSR has.

Regressions 6 and 7 of table 7 test whether there is a moderating effect for attitude towards CSR on the relationship between Internal/External CSR on Organizational Commitment. In both regressions the test doesn’t show a significant result p < ) so hypothesis 4 is rejected. Regressions 8 and 9 test whether there is a moderating effect for Pay Satisfaction on the relationship between Internal and External CSR on Organizational Commitment. In both regressions the terms show a significant (p<0,01) positive interaction on the relationship between CSR and Organizational Commitment. This means that an increase of 1 in log Internal CSR x square root Pay Satisfaction will result in an increase of 0,418 in the square root of Organizational Commitment and that an increase of 1 in square root External CSR x square root Pay Satisfaction will result in an increase of 0,329 in the square root of Organizational Commitment. This implies that the relationship is stronger for people who are more satisfied with their pay, which supports hypothesis 5. Looking at regression 10 and 11 where the model is tested with both moderators on the same relationship, we still see a significant positive moderating effect for Pay Satisfaction still supporting hypothesis 5. We also see that the interaction for attitude towards CSR turns into a negative moderating effect, which is significant (p<0,05) on the relationship between External CSR and Organizational Commitment. This also results in a rejection for hypothesis 4.

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Table 5: Regressions total sample population, control variables included

β step 1 β step β step 3 β step β step β step 6 β step β step 8 β step 9 β step 1 β step 11

Independent Variables: Internal CSR 0,989 (19,892)*** 0,787 (12,109)*** 0,9960 (3,9210)*** 0,0301 (0,1302) 0,0444 (0,1500) External CSR 0,497 (15,149)*** 0,184 (4,694)*** 0,6209 (3,6907)*** -0,2651 (-1,8083)* -0,1374 (-0,7409) Pay Satisfaction 0,450 (14,245)*** 0,0208 (0,3352) -0,3127 (-2,1735)** -0,0588 (-0,9019) -0,5449 (-0,35417)*** Attitude towards CSR 0,355 (8,876)*** 0,1650 (2,3973)** 0,3382 (1,8049)* 0,2990 (3,3283)*** 0,5916 (3,1709)*** Interactions:

Internal CSR x Attitude towards CSR -0,0521 (-0,3322) -0,2092 (-1,3226)

External CSR x Attitude towards CSR -0,1167 (-1,0957) -0,2584 (-2,4637)**

Internal CSR x Pay Satisfaction 0,4387 (3,4131)*** -0,5863 (4,3537)***

External CSR x Pay Satisfaction 0,3552 (4,3207)*** 0,4816 (5,5055)***

Constant 1,354 (61,374) 0,906 (15,902) 1,121 (20,718) 0,968 (17,239) 1,176 (17,794) 1,1180 (10,5476) 0,4715 (1,6457) 1,3814 (13,6864 1,6763 (6,7954) 1,1743 (9,6412) 1,2456 (4,0595)

R Square 0.396 0.276 0,418 0.252 0,116 0,4133 0,2910 0,4422 0,3778 0,4605 0,3981

Adjusted R Square 0.395 0.274 0,416 0.251 0,114 0,4132 0,2896 0,4314 0,3585 0,4434 0,3672

Note. n=605. *p<0,1, **p<0,05, ***p<0,01

Independent Variables:

Internal CSR 0,997 (20,030)*** 0,786 (12,159)*** 1,010 (3,992)*** 0,046 (0,197) 0,054 (0,183)

External CSR 0,504 (15,366)*** 0,194 (4,977)*** 0,626 (3,732)*** -0,240 (-1,630) -0,125 (-0,670)

Pay Satisfaction 0,453 (14,266)*** 0,024 (0,382) -0,294 (-2,046)** -0,056 (-0,863) -0,517 (-3,351)***

Attitude towards CSR 0,357 (8,865)*** 0,1648 (2,400)** 0,330 (1,770)* 0,223 (3,161)*** 0,556 (2,983)***

Control Variables: The Netherlands USA

Gender -0,025 (-1,352) -0,027 (-1,346) -0,026 (-1,448) -0,037 (-1,803)* -0,003 (-0,143) -0,017 (-0,926) -0,192 (-0,969) -0,032 (-1,822)* -0,035 (-1,867)* -0,024 (-1,371) -0,026 (-1,427) Age -0,034 (-2,278)** -0,038 (-2,374)** -0,035 (-2,400)** -0,042 (-2,547)** -0,037 (-2,050)** -0,034 (-2,310)** -0,037 (-2,308)** -0,035 (-2,424)** -0,038 (-2,540)** -0,034 (-2,420)** -0,035 (-2,330)** Highest Completed Education 0,003 (0,489) 0,001 (0,138) 0,004 (0,745) 0,000 (-0,053) -0,006 (-0,899) 0,003 (0,537) 0,001 (0,122) 0,005 (1,077) 0,005 (1,025) 0,006 (1,104) 0,006 (1,078) Background of the Study 0,001 (0,391) -0,002 (-0,483) 0,001 (0,254) 0,000 (-0,133) -0,004 (-1,034) 0,000 (0,131) -0,002 (-0,633) 0,001 (0,298) 0,001 (-0,230) 0,000 (-0,045) 0,001 (-0,406) Time working at company -0,010 (-0,990) -0,12 (-1,109) -0,013 (-1,250) 0,010 (0,908) -0,005 (-0,435) -0,011 (-1,100) -0,014 (-1,215) -0,003 (-0,329) 0,000 (0,015) -0,005 (-0,500) -0,002 (-0,169)

Interactions:

Internal CSR x Pay Satisfaction 0,434 (3,381)*** 0,580 (4,309)***

Constant 1,440 (23,518) 1,028 (12,065) 1,195 (15,405) 1,069 (12,240) 1,342 (14,021) 1,2060 (10,335) 0,604 (2,068) 1,436 (12,660) 1,708 (6,867) 1,242 (9,523) 1,304 (4,213)

R Square 0,410 0,293 0,433 0,264 0,128 0,426 0,307 0,455 0,391 0,472 0,409

Adjusted R Square 0,404 0,286 0,427 0,257 0,120 0,426 0,306 0,444 0,373 0,456 0,381

Organizational Commitment

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Table 6: Regressions excluding people not working in NL, USA, IND. No control variables included

Table 7: Regressions excluding people not working in NL, USA, IND. Control variables included

Independent Variables: Internal CSR 0,988 (19,771)*** 0,785 (12,055)*** 0,952 (3,720)*** 0,045 (0,194) 0,023 (0,077) External CSR 0,498 (15,073)*** 0,187 (4,749)*** 0,585 (3,473)*** -0,263 (-1,795)* -0,163 (-0,875) Pay Satisfaction 0,446 (14,080)*** 0,021 (0,337) -0,317 (-2,202)** -0,056 (-0,857) -0,539 (-3,493)*** Attitude towards CSR 0,353 (8,791)*** 0,156 (2,252)** 0,297 (1,580) 0,216 (3,028)*** 0,547 (2,921)*** Interactions:

External CSR x Pay Satisfaction 0,355(4,323)*** 0,475 (5,426)***

Constant 1,354 (60,965) 0,903 (15,730) 1,117 (20,505) 0,975 (17,308) 1,181 (17,815) 1,132 (10,590) 0,532 (1,853) 1,3815 (13,699) 1,681 (6,807) 1,189 (9,726) 1,299 (4,221)

R Square 0,396 0,276 0,419 0,250 0,115 0,414 0,291 0,441 0,377 0,459 0,396

Adjusted R Square 0,395 0,275 0,417 0,249 0,113 0,414 0,290 0,431 0,358 0,295 0,366

Organizational Commitment

Note. n=597. *p<0,1, **p<0,05, ***p<0,01

Independent Variables:

Internal CSR 1,004 (19,857)*** 0,779 (12,034)*** 1,027 (4,007)*** 0,080 (0,343) 0,1007 (0,338)

External CSR 0,526 (15,463)*** 0,216 (5,404)*** 0,642 (3,824)*** -0,192 (-1,301) -0,083 (-0,446)

Pay Satisfaction 0,459 (14,086)*** 0,037 (0,599) -0,262 (-1,825)* -0,047 (-0,724) -0,484 (-3,147)***

Attitude towards CSR 0,373 (8,947)*** 0,187 (2,668)*** 0,351 (1,877)* 0,243 (3,372)*** 0,554 (2,973)***

Control Variables: The Netherlands -0,030 (-1,202) -0,069 (-2,522)** -0,058 (-2,337)** -0,030 (-1,087) -0,028 (-0,915) -0,052 (-2,104)** -0,085 (-3,096)*** -0,042 (-1,771)* -0,074 (-2,875)*** -0,064 (-2,670)*** -0,087 (-3,426)*** USA -0,026 (-0,928) -0,054 (-1,775)* -0,050 (-1,810)* -0,047 (-1,505) 0,026 (0,780) -0,028 (-1,004) -0,051 (-1,673)* -0,052 (-1,923)* -0,082 (-2,876)*** -0,053 (-1,975)** -0,077 (-2,723)*** Gender -0,018 (-0,970) -0,019 (-0,974) -0,018 (-1,020) -0,031 (-1,512) 0,003 (0,156) -0,008 (-0,446) -0,010 (-0,515) -0,025 (-1,428) -0,028 (-1,487) -0,016 (-0,891) -0,018(-0,997) Age -0,028 (-1,818)* -0,026 (-1,562) -0,025 (-1,696)* -0,037 (-2,178)** -0,026 (-1,423) -0,024 (-1,584) -0,022 (-1,310) -0,029 (-1,930)* -0,027 (-1,780)* -0,024 (-1,650)* -0,012 (-1,386) Highest Completed Education 0,001 (0,149) -0,002 (-0,365) 0,001 (0,186) -0,003 (-0,543) -0,004 (-0,539) 0,001 (0,255) -0,002 (-0,273) 0,002 (0,405) 0,001 (0,126) 0,003 (0,501) 0,002 (0,289) Background of the Study 0,001 (0,439) -0,002 (-0,717) 0,000 (0,152) 0,000 (-0,109) -0,004 (-1,221) 0,000 (0,005) -0,003 (-0,989) 0,001 (0,338) -0,001 (-0,403) -0,001 (-0,174) -0,002 (-0,690) Time working at company -0,011 (-1,055) -0,014 (-1,263) -0,013 (-1,351) 0,009 (0,816) -0,008 (-0,616) -0,012 (-1,192) -0,015 (-1,387) -0,004 (-0,376) -0,001 (-0,130) -0,006 (-0,581) -0,004 (-0,344

Interactions:

Constant 1,454 (22,321) 1,037 (11,934) 1,201 (15,189) 1,096 (12,319) 1,288 (12,780) 1,188 (9,918) 0,584 (1,993) 1,452 (12,705) 1,689 (6,777) 1,235 (9,327) 1,280 (4,128)

R Square 0,410 0,300 0,438 0,264 0,133 0,431 0,318 0,456 0,399 0,476 0,418