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Employee participation in corporate social responsibility
activities
What influences employee participation in corporate social responsibility
activities such as employee volunteering programs?
Amount of words: 11.461
by
Rogier Jansen
Master of Science Business Administration
Organizational & Management Control
University of Groningen
Faculty of Economics and Business
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ABSTRACT
This paper researches influential factors on employee participation in corporate social responsibility (CSR) activities like employee volunteering programs (EVPs). The application of CSR activities is increasing in companies in order to show their involvement and social responsibility towards society. Although it’s increasing popularity, little research has been conducted towards employee participation in CSR activities. This is an interesting topic, since participation is needed to achieve social performance. Five variables are researched which could influence participation, namely; intrinsic motivation, extrinsic motivation, job satisfaction, organizational citizenship behavior and communication. Based on data collection from employees of a banking company, my results demonstrate that in achieving social performance through CSR activities; extrinsic rewards, organizational citizenship behavior and communication need to be attended to reach employee participation and thereby companies can be truly socially involved in society.
Key words: Corporate sustainable responsibility, employee volunteering program, participation,
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TABLE OF CONTENTS
ABSTRACT……….2
TABLE OF CONTENTS………3
1. INTRODUCTION
1.1 Background………5
1.2 Problem statement………..……..5
1.3 Purpose and significance……….6
1.4 Structure……….6
2. THEORY
2.1 Introduction……….…….7
2.2 Corporate social responsibility (CSR) defined……….…..7
2.3 Employee volunteering program (EVP) ……….…..7
2.4 Corporate social performance (CSP) defined……….……8
2.5 Theoretical framework……….……9
2.6 Influential factors……….…..10
2.6.1 Intrinsic motivation and employee participation………10
2.6.2 Extrinsic motivation and employee participation………..11
2.6.3 Organizational citizenship behavior and employee participation………..11
2.6.4 Job satisfaction and employee participation………....12
2.6.5 Communication and employee participation………12
2.6.6 Summary of the conceptual model………..13
3. METHODOLOGY
3.1 Introduction………14
3.2 Literature study….………..………14
3.3 Company choice………..………14
3.4 Empirical research……….…14
3.5 Primary data collection………..…15
3.5.1 Collection method……….…..15
3.5.2 Collection process ………16
3.5.3 Data analysis………..….16
3.5.4 Dealing with potential bias……….……17
3.6 Secondary data collection……….…18
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4. RESULTS
4.1 Primary data……….……….…19
4.1.1 Employee participation….………20
4.1.2 Recode……….20
4.1.3 Instrument measurements………20
4.1.3.1 Intrinsic
motivation ………204.1.3.2 Extrinsic motivation ………21
4.1.3.3 Job satisfaction……….…21
4.1.3.4 Communication………21
4.1.3.5 Organizational citizenship behavior…………..………...………21
4.1.4 Factor analysis……….………22
4.1.4 Constructs………..…23
4.1.5 Regression analysis………..…23
4.1.6 Control variables………..……….…25
4.2 Secondary data……….………26
5. DISCUSSION AND CONCLUSION………..27
6.LIMITATIONS AND FUTURE RESEARCH………..………30
7.REFERENCES……….…………..…………31
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1.
INTRODUCTION
1.1 Background
In recent years corporate social responsibility (CSR) has gained more and more attention in businesses (Crane et al., 2008). CSR is not a new concept, but it has never been more prominent on the corporate agenda than it does today. This is mostly due to external forces and social expectations by governments, media and society (Durden, 2008; Smith, 2003). These stakeholders are more and more critically judging operations of companies. They demand the companies to act in socially responsible ways and so earn their existence and to be able to operate (Van Luijk, 2000). One way through which companies can act socially responsible is through CSR activities. Not only does it provide external justification, participation in CSR activities is said to be beneficial to companies themselves as well (Elkington, 1994). Advantages are for instance a reduction of risks and costs, building competitive advantage, enhance reputation and legitimacy, create synergy, and well performing employees (Abraham, 2012; Salazar et al., 2012). A particular form of CSR activities through which companies can be involved, which is gaining popularity today, are employees volunteering programs (EVPs). In EVPs companies support employees to volunteer and to direct their time and skills to social goals outside the company, by letting those employees volunteer during working hours (Quirk, 1998). Next, I will explain how this new form of social involvement provides direction for my research.
1.2 Problem statement
Employee volunteering programs are a form of CSR activities through which the company can be socially involved. Since image is often said to be the main goal of social involvement instead of truly justifying social responsibility (Deegan et al., 1996), the question arises if CSR indeed only concerns external justification, or if companies are truly involved with society. Such involvement can be assessed by looking at participation of employees in CSR activities like EVPs.
6 act socially responsible and direct their employees in achieving social goals should know how they can attain employee participation. EVPs in turn provide a good starting point to see if social goals are met and how these activities can be controlled. Need for research towards the influential factors on employee participation in CSR activities like EVPs is therefore necessary (Zappala et al.,2004; Peloza et al., 2006; Pajo et al., 2011). This leads to the following problem statement:
‘‘Which factors influence employee participation in EVPs?’’
1.3 Purpose and significance
The goal of this study is to investigate influential factors of employee participation in CSR activities (EVPs). In contradiction to prior literature, which investigates benefits to employees, the organization and society, I will look at factors influencing employee participation. Hereby I can provide a deeper understanding of the relation between EVPs and social performance. The influential factors should be considered by companies when setting up and controlling for CSR activities. In that way participation can be enhanced, through which CSP can be increased.
1.4 Structure
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2. THEORY
2.1 Introduction
In this chapter, existing literature concerning my research will be reviewed. I start with the definition of corporate social responsibility, followed by the concept ‘employee volunteering program’. Next I define corporate social performance followed by the theoretical framework. Finally, I will elaborate on the influential factors and provide the conceptual model. I will start by clarifying the concepts.
2.2 Corporate social responsibility (CSR) defined
‘The basic idea of corporate social responsibility is that business and society are interwoven rather than distinct entities’ Wood (1991a). This interwoven aspect is reflected by the definition of CSR as given by business. The World Business Council for Sustainable Development (WBCSD,1999) proposes the definition of CSR as:
‘CSR 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.’
To be actively involved in CSR practices, companies need to focus on stakeholder analysis and participation. This includes understanding stakeholders’ needs and the communication and interaction with the stakeholder groups. The definition of CSR shows the importance of stakeholders in CSR management of business. In defining CSR, the community and society at large take an important place. These are both served by companies who direct time and effort to CSR activities, such as employee volunteering programs. In my research I refer to the stated definition of CSR as given by WBCSD (1999).
2.3 Employee volunteering program (EVP)
8 refer to all sorts of CSR activities in which the company supports employees to volunteer and to direct their time and skills during working hours to social goals outside the company. By applying a broad interpretation of EVPs, I are able to investigate different divisions of the company with different EVPs and increase the sample population.
2.4 Corporate social performance (CSP) defined
In my research I consider the company’s social performance, since this reflects participation of employees. However, prior literature indicates the difficulty in measuring CSP, since it involves a variety of inputs; internal behaviors, processes and outputs (Wood, 1991a, Wood, 1991b). CSP concerns the costs and benefits that result from a business organization’s interactions with its larger environment, including the social, cultural, legal, political, economic and natural dimensions (Wood, 2010). According to Wood (1991a), CSP can be thought of as a framework encompassing principles of social responsibility, processes of social responsibility. A firm’s financial performance is seen as a dimension of the overall social performance, not as a competing or contrasting type of performance (Wood, 2010). Although there are emerging methods of assessing CSP, these are not all established and are subject to debate. (Sethi, 1979; Preston, 1997; Moir, 2001).The definition of CSP given by Watrick et al., (1985) represented a conceptual improvement of in combining business and society. They presented, critiqued and synthesized three challenges to CSR; economic responsibility, public responsibility and social responsiveness. However, this definition still left some problems unaddressed. Research by Wood (1991,a) took these problems in account and gave the following definition of CSP which I will use in my research:
‘’a business organization’s configuration of principles of social responsibility, processes of social responsiveness, and policies, programs, and observable outcomes as they relate to the firm’s societal relationships’’
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2.5 Theoretical Framework
Durden (2008) developed a framework which highlights the connections between the management control system and social responsibility. I elaborate on this framework, because it enables me to put my findings in a bigger perspective, both from a practical view and for future research guidance. In this research I will link the CSR activities to enabling factors of participation. To clarify my focus of research, take a look at the figure below.
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2.6 Influential factors
The model presented and tested in this paper extends and refines the relationship between social activities and individual responses of participation to these activities.
In this study, I hypothesize that different factors might influence employee participation in EVPs. In researching the influence on participation, I consider the behavioral approach as mentioned by Ansari (1977). The behavioral approach can be described as any process in which a person (or group of persons) determines or intentionally affects what another person or group will do (Tannenbaum, 1964). This refers to the process of affecting subordinate behavior. I will research influential factors affecting subordinate behavior. The factors are elaborated upon below. After stating the research factors, I will present the conceptual model.
2.6.1 Intrinsic motivation and employee participation
Ansari (1977) recognizes that subordinates have social needs which could exceed economic needs. A manager could therefore provide rewards that increase worker satisfaction. This is described through personal control, where employees believe they have autonomy on the job and an important impact on work outcomes (Brockner et al., 2004). According to Hackman et al., (1976), intrinsic motivation can be defined as rewards that come from a job itself and can entail motivational characteristics of the job. It indicates if employees feel engaged to the company (Cho et al., 2012). Prior literature studies the influence of intrinsic motivation in the participation of budgeting (Wong-on-Wing et al., 2010). In a similar way, intrinsic motivation could relate with employee participation in EVPs. I will use the basic theory of Hackman and Oldham (1976) to see if there exists a relationship between the fulfillment of regular job characteristics and their motivational rewards and the participation of employees in EVPS to enhance the motivational rewards of the employees. According to them, positive personal and work outcomes are obtained through five core job dimensions; skill variety, task identity, task significance, autonomy and feedback. I expect that when the regular job characteristics are not fulfilled, employees may seek these missing characteristics through participating in EVPs. When the job characteristics however are fulfilled and employees receive high intrinsic rewards through their regular job, I expect these employees not to participate in EVPs, cause there is nothing ‘’left to gain’’. Therefore I state the following hypothesis:
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2.6.2 Extrinsic motivation and employee participation
In addition to intrinsic rewards, employees can be motivated to perform their tasks by receiving extrinsic rewards when they achieve certain targets. According to Ansari (1977) control of participation could be viewed in terms of power and authority relations, leading to the application of economic rewards and job security. A manager could rely more on formal organizational relations to get the work done. Extrinsic motivation can be derived from both monetary and non-monetary rewards. I rely on the work of Merchant et al., (2007) to research extrinsic rewards and the influence on participation. From their work I derive the use of a pay raise, bonus and commission as examples of monetary rewards. For non-monetary rewards I derive opportunities for job advancement and non-non-monetary rewards like the use of a company car. Extrinsically motivated employees seek to achieve goals which are not in the task itself, but can be obtained through them (Park et al., 2012). Extrinsic rewards could be provided by the company for the achievement of results in regular tasks. Employees might want to achieve these rewards and direct their time and effort in achieving these rewards instead of participating in EVPs. Therefore I expect employees who receive extrinsic motivational rewards in regular tasks not to participate in CSR activities. This leads to the following hypothesis:
H2: There is a negative relationship between extrinsic motivation and employee participation.
According to empirical evidence extrinsic rewards can crowd out intrinsic motivation (Deci, 1975).This leads employees to reduce their work efforts instead (James, 2005). The provision of monetary rewards can have a negative consequence on intrinsic motivation in performing that same task. Employees in my research can decide if they want to participate in EVPs during working hours. Since they can participate during working hours, it can be said that they receive monetary rewards for participation. Getting paid for helping others through EVPs could erode the intrinsic motivation of employees in participation. In this case, when employees would likely participate to gain intrinsic rewards through participation, they may be reluctant to participate due to the extrinsic rewards which crowd out intrinsic motivation.
2.6.3 Organizational citizenship behavior (OCB) and employee participation
12 required and compete with other behaviors that are more likely to be considered in performance evaluations, these behaviors can however contribute to improving organizational operations and performance (Niehoff, 2005). Such behaviors could exist through interaction and continued interdependence and shared understandings of purpose, process and outcomes of employee volunteering, which nurture the norm of cooperation (Muthuri et al, 2009).
I am interested in the workplace climate and the relationship with participation in CSR activities like EVPs. I will look at OCB and their relationship with social responsibility initiatives such as EVPs. I expect that organizational citizenship behavior relates positively to employee participation. This leads to the following hypothesis:
H3: There is a positive relationship between behavior beyond formal tasks and employee participation.
2.6.4 Job satisfaction and employee participation
Job satisfaction is commonly defined as the extent to which employees enjoy their work. It has been suggested that an individual’s satisfaction with his job is essentially an attitude (Graen, 1969). The more a person’s needs, values and personal characteristics are fulfilled, the more satisfied the person is with his or her job (Ellickson et al., 2002). In addition to intrinsic and extrinsic motivation, job satisfaction is also influenced by the job, personality variables, benefits, recognition, cooperation, fair treatment, sound company policies, team spirit and performance management system (Abraham, 2012; Aghoet al., 1993). According to prior literature, job satisfaction can lead to improved firm value (Becker et al., 1996) and corporate social responsibility may be linked positively to firm value (Edmans, 2010). Since job satisfaction is said to relate to firm value, I am interested to see if job satisfaction also relates to social performance. I will investigate such a relationship through the participation of employees in CSR activities with respect to job satisfaction. I expect employees that face high job satisfaction to relate positively to social performance, which can be derived from participation. This leads to the following hypothesis:
H4: There is a positive relationship between job satisfaction and employee participation.
2.6.5 Communication and employee participation
13 contraction between CSR ideals and practices could occur when employees are not aware of the CSR activities, therefore the enactment of the EVPs depend upon communication. I expect employees who indicate to receive high communication on CSR activities to relate to participation in those activities.
H5: There is a positive relationship between communication of CSR and employee participation.
2.6.6 Summary of the conceptual model
The research question is directed towards understanding the factors which influence employee participation. Considering the before mentioned influential factors, I provide the following conceptual model.
Now that I have assessed the theoretical part, I will turn to the methodology. In the methodology section I elaborate on the ways in which by which I will collect and analyze the information about the firm’s social performance of the case company.
Fig. 2 Summary conceptual model
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3. METHODOLOGY
3.1 Introduction
I’m going to investigate whether the variables in my conceptual relate to employee participation. The way in which I will test if the variables provide such a relationship is elaborated upon in this section. I will provide information on the company in which I conduct research, followed by the data collection method and the analysis. But I start with considering the type of research.
3.2 Literature study
The empirical research will be conducted towards explanatory research. Based on prior literature, I developed hypotheses which will be tested by investigating the relationship between variables. The data are analyzed using statistical techniques. I will be investigating if the hypotheses provide us with relationships with respect to employee participation. In my literature study I used the following keywords; corporate social responsibility, corporate social performance, extrinsic-, intrinsic motivation, organizational citizenship behavior, job satisfaction, communication and participation. I searched for articles on ‘Business source premier’ and used some articles which were derived from those articles.
3.3 Company choice
The case company attaches great value towards CSR, which makes it a valid company to conduct research at when studying matters concerning CSR activities. Especially concerning attitudes of employees on CSR activities like EVPs, because the company supports employees who volunteer and who direct their time and skills to the community through such EVPs. To verify the company’s high value towards CSR I will measure and assess the company’s social performance. This will be measured along the social, economic, resource and environmental elements and by looking at third party ratings. In the section below I elaborate on the data collection methods for both primary and secondary data.
3.4 Empirical research
15 gather information regarding influential factors of employee participation and I use secondary data (written reports) to determine the social performance of the company
3.5 Primary data collection
I will make use of a questionnaire to gather data on possible influential factors of participation. Making use of questionnaires provides both advantages as disadvantages (Flowerdew et al., 2005). Advantages over other collection methods are speed of collecting data, lower costs and anonymity of respondents. In addition respondents can complete the questionnaire at their own pace and they will not be influenced by the presence, personality and intonation of an interviewer. Disadvantages are that self-completion formats only permits simple and straightforward questions and instructions could not succeed in informing the respondents. Furthermore respondents could provide patterned responses providing untruthful information. There is no control over who answers the questionnaire in the unit sampled. One importation limitation that may be relevant for this study is that participation in mail surveys can be influenced by the level of interest in the topic. It could be that only employees who participate in EVPs find social responsibility important and only those employees would return the questionnaire. This might bias the results in favor of the sample population most interested in the survey (Fowler 1988). This however, was not the case, since both employees participating and those not participating returned the questionnaire.
3.5.1 Collection method
16 (Flynn et al, 1990). Another advantage of such a device is that I am able to guide the respondents quickly through a range of statements. This contributes to participants’ willingness to finish the questionnaire. There is a widely held belief that the best scale to use should be 7 (Peterson, 1994; Lissitz et al., 1975). Uneven numbers are preferred in my research, because they allow the middle category to be interpreted as a neutral point (Colman et al., 1997). I use interval data for intrinsic motivation, organizational citizenship behavior, job satisfaction and communication. In measuring extrinsic motivation and employee participation I use categorical data, which take the value of 1 or 2 to indicate respectively the presence or the absence of the categorical effect. I apply the value of 1 or 2 (in addition to the more often used 0 and 1) because the statistics program automatically assigned these values to the items. The measurement items can be found through the questionnaire in Appendix B.
3.5.2 Collection process
Data is collected from two divisions of a local banking company. I will define the respondents to be able to acquire information from them (Easterby-Smith et al., 2002). For my research, respondents are all employees of the division, ranging from lower level employees to top management. The questionnaire was placed on the company intranet. After one week this only resulted in 20 respondents. I then requested a local manager of one of the divisions to personally remind the employees to fill in the questionnaire. After one more week more this gave us a total of 56 respondents. One more time I asked the same manager to mail the employees to remind them. After two more days this gave us a total of 81 respondents. Of the 350 employees in the sample, 81 employees returned a complete questionnaire (23 percent). The average response rate is 55,6% in academic studies (Baruch, 1999), with differences between employee (61.4%) and top manager responses (35.5%). So the response rate was quite low. 3.5.3 Data analysis
17 excluded items. Results of reliability can be found in appendix C. After having assessed the reliability of the items, I assessed the validity. I assessed whether the items overlapped on different variables and excluded any items which had a lower loading than 0.5 on the variable of interested. Items which loaded higher than 0.5 on other variables were removed as well (George et al., 2003). When reliability and validity were assessed, I conducted a factor analysis to see if items overlapped on different constructs. Items which didn’t overlap would form a construct. Items which did overlapped were removed from the analysis. Next, I conducted the regression analysis in order to estimate the effect between the explanatory variables and the dependent variable. Generally it is assumed that a significance value below 0.1 is statistically meaningful and can be regarded as indicative of a reliable effect (Field, 2000). Finally, to see if my control variables affect my results, I test whether the control variables (age, having children and gender) relate significantly to the dependent variable (employee participation in EVPs). 3.5.4 Dealing with potential bias
In conducting survey research I have to be wary of several error probabilities (Flowerdew et al., 2005). The amount of respondents has at least got to be ten times the amount of variables researched, especially for the multiple regression analysis. There should be at least 50 respondents in my research. Since I collected data provided by 81 respondents, there are good grounds for expecting representative results provided by the sample of the target population (Flowerdew et al., 2005). Another error to take into account is the response error. Here, distortions arise in the process of collection data through the questionnaire. The questions might not be understood in the ways intended; the respondent may give social responses and other sorts of biases. These sorts of errors are reduced by carefully setting up the questionnaire design. Yet another error is the non-response error. This is the result of errors associated with refusals or non-contacts. This influences the representativeness of the respondents who do participate. I tried to decrease this error type, by providing easy access to the questionnaire through the intranet and limited the amount of questions. This contributed to respondents’ willingness to participate and decreased non-response error.
18 To determine the current CSP stance of the company, I will use the Sustainability Assessment Model (SAM) as provided by Bebbington (2007). This model considers CSP from four categorical elements; economic, resource, environmental and social. The economical element represents the economic benefit the company gains from CSR investments. The resource element attempts to capture the value of resources used, without considering payments made to use these resources. I will measure the economic benefit which results from CSR investments through; charitable giving, the existence of a corporate charitable foundation and the investments which are directly related to internal CSR activities. The environmental aspect captures the environmental damage incurred by the use of resources. Since I am investigating a banking company which doesn’t use a lot of resources (as compared to manufacturing companies) I will combine the resource- and environmental elements. This combined resource/environmental category measures the net effect of the use of resources and the environmental damage incurred by the use of this resources. The resource and environmental element are combined and will be measured by considering the energy use of the company and innovations leading to a reduction of resource usage. The social element combines three elements which create a net positive social benefit. These are the impact of employment, how a project contributes more broadly to creating a socially sustainable society and the social impact of the products which arise from the services the company delivers. Third, for the social category, I will look at projects the company initiates within the local community. In addition to the before mentioned measures of CSP, which are provided by the company itself, I will also consider 3rd party ratings. This strengthens my interpretation of the company’s social performance. In determining CSP through third parties, I will include research results of ‘Profundo’ and ‘Oekom Research’. Finally I will consider the increased importance of CSP which will be measured through the amount of pages the company includes on CSR in their annual report.
3.7 Control variables
In testing the hypotheses, control variables are taken into account. This is done in order to reduce an interfering effect on the dependent variable. The descriptive statistics of the control variables can be found in Appendix A. The following control variables are included:
Age
19 greater concern for society. If people age onwards, they are less likely to participate. This trend continues for people getting older (Wilson et al., 1997). Since the employees are differing in age, I include this control variable. Age is measured by asking respondents how old they are using a scale interval.
Children
Parents with children still living in the household will have more social contacts and higher rates of social interaction because their children will draw them into community activities (Wilson et al., 1997). People with children tend to participate more than people without children. Therefore I include the control variable which measures if participants have children. The control variable for children was measured by respondents indicating if they had children on a nominal scale, answering yes or no.
Gender
Prior literature indicated that due to gender, differences can arise in; reasons for volunteering, types of volunteer activities to participate in and satisfaction derived from volunteering (Peterson, 2004). Gender differences can have an effect on participation in volunteering activities in my study. Women are more likely to participate in volunteer work than are men (Wilson et al., 1997). Therefore I include gender as a control variable. To capture the gender of the respondents I asked them to answer on a nominal scale, stating man or woman.
4. Results
In this section, the results from the statistical test of the gathered primary data will be presented. Also, the secondary data (written reports) will be elaborated upon in this section to draw conclusions on the CSP of the company. Let us first take a look at the data derived from the primary data (questionnaire).
4.1 Primary data
I will begin by elaborating on the statistical results I found. This includes the recoding of items, providing the instruments measures, factor analysis, forming constructs and regression analysis and finally the control variables. The descriptive statistics for all the variables are presented in Appendix D. The
20 4.1.1 Employee participation
In determining whether the company is truly involved with society, I consider the participation of employees in CSR activities like EVPs. From the table below I can derive that employees are indeed participating in EVPs. 29 out of 81 respondents (36 percent) indicated to have participated in a volunteering program during the past year.
Employee participation
Frequency Percent Valid Percent Cumulative
Percent
Valid
Yes 29 35,8 35,8 35,8
No 52 64,2 64,2 100,0
Total 81 100,0 100,0
Table 1.Employee participation in EVPs 4.1.2 Recode
Before I can analyze my data, I need to recode data where necessary. The SPSS program automatically coded the age of respondents from 1 to 41. Since these didn’t represent the actual age, I recoded them 22 to 62 years of age. By doing so I could more easily interpret the descriptive of the actual age of respondents. I saved the recoding of age as ‘AgeRecoded’. I didn’t need to recode for the items of other instruments, since all items within the instruments had the same scale. This can be derived from the questionnaire (Appendix B).
4.1.3 Instruments measurements
Here I will elaborate on the instrument measurements, used in my research to measure the underlying variables.
4.1.3.1 Intrinsic motivation
21 intrinsic motivation. Although the outcome is below .7 I include these items since they are derived from prior literature.
4.1.3.2 Extrinsic motivation
Merchant et al., (2003) describe monetary and non-monetary rewards. I use two items that reflect the characteristics of both monetary and non-monetary rewards. The items are measured on a categorical scale.
4.1.3.3 Job satisfaction
Thompson et al., (2012) introduced a job satisfaction measure for the use of researchers. The Brief Index of Affective Job Satisfaction (BIAJS) measure is used to capture the job satisfaction of the employees. The scale is a 7-point likert scale (1=strongly disagree, 7=strongly agree). The Cronbachs alpha is (.931) of the four items measuring job satisfaction. This is high enough to indicate the reliability of these items measuring job satisfaction. It provides sufficient confidence to use the four items in my model.
4.1.3.4 Communication
Pinto et al., (1990) measured the amount of communication on a six point scale. I group the communication methods to form one factor. The two items I include refer to formal communication methods (team meetings, written letters, memos or reports and making a formal appointment with another team member) and informal communication methods (telephone calls and unplanned face-to-face discussions). The scale is a 7-point likert scale (1=strongly disagree, 7=strongly agree). The Cronbachs alpha is (.751) of the two items measuring communication. This is high enough to indicate the reliability of these items measuring communication.
4.1.3.5 Organizational citizenship behavior
22 This is high enough to indicate the reliability of these items measuring organizational citizenship behavior.
4.1.4 Factor analysis
In the factor analysis I tested whether measurement items overlapped on constructs. I excluded items measuring extrinsic motivation from the factor analysis, because these are measured on a dichotomous scale. Items loading lower than 0.5 on their construct of interest or which load higher than 0.5 on other constructs are excluded from my research (George et al., 2003).
Rotated Component Matrixa
Component 1 2 3 4 IM2 ,000 ,030 -,034 ,943 JS1 ,913 ,112 ,110 -,081 JS2 ,827 ,143 ,190 ,122 JS3 ,905 ,163 ,205 ,003 JS4 ,899 ,121 ,195 -,009 OCB1 ,072 ,634 ,080 ,399 OCB2 ,265 ,745 ,179 ,095 OCB3 ,065 ,879 ,054 -,142 OCB4 ,046 ,816 ,227 ,098 OCB5 ,229 ,710 ,305 -,109 C1 ,278 ,280 ,792 -,023 C2 ,255 ,231 ,833 ,001
Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. a. Rotation converged in 5 iterations.
Table 2. Factor analysis
23 conducted the factor analysis with extraction with four fixed factors. This resulted in eigenvalues greater than .832, accounting for 77,367 percent of the variance (See Appendix E).
4.1.5 Constructs
After I calculated the reliability and validity of my item instruments, I developed constructs of my measurement items. Now I can average individual’s answers on the multiple items of a scale into individuals’ overall score on the construct. Such constructs of items were made for job satisfaction, communication and organizational citizenship behavior. I didn’t make a constructs for intrinsic motivation, because I only use one item for this construct. I also didn’t make a construct for extrinsic motivation, since this measurement made use of a dichotomous scale, for which averages can’t be calculated (Field, 2000). The developed constructs for the former variables were saved in SPSS and used for further analysis.
4.1.7 Regression analysis
24 Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) 2,152 ,312 6,890 ,000
Intrinsic motivation (IM2) -,020 ,033 -,064 -,614 ,541
Job Satisfaction -,086 ,059 -,176 -1,458 ,149
Communication ,163 ,054 ,400 3,003 ,004
Organizational Citizenship
Behavior -,188 ,057 -,403 -3,288 ,002
a. Dependent Variable: Employee participation in EVPs
Table 3. Regression analysis of intrinsic motivation, job satisfaction, communication organizational citizenship and employee participation in EVPs
Here we can see that both communication and organizational citizenship behavior show a significant relationship with employee participation. I will elaborate these outcomes in the discussion section. The second analysis I conduct, involves the independent variable on extrinsic motivation (dichotomous) and the dependent variable participation (also dichotomous). Since both variables are dichotomous, I need to conduct the binary logistic regression. Below we can see the items measuring extrinsic motivation. The first item on extrinsic motivation which represents monetary rewards (EM1) is significant (.076< p value). The outcome is shown below in table 4.
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Extrinsic motivation (EM1)
,954 ,539 3,140 1 ,076 2,597
Constant -,656 ,719 ,831 1 ,362 ,519
a. Variable(s) entered on step 1: Extrinsic motivation (EM1)
25 The second item on extrinsic motivation which represents non-monetary rewards (EM2) is not
significant (.306>p value). The outcome is shown below in table 5.
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Extrinsic motivation (EM2)
,506 ,494 1,049 1 ,306 1,659
Constant -,265 ,855 ,096 1 ,757 ,767
a. Variable(s) entered on step 1: Extrinsic motivation (EM2)
Table 5. Regression analysis of extrinsic motivation (EM2)and employee participation in EVPs 4.1.8 Control variables
Finally, to see if my control variables affect the results, I test whether gender, children and age act as predictors of employee participation. I use the binary logistic regression analysis to test whether gender and having children influence participation. Below are the findings from these analyses. Here we can interpret that gender and having children are both not significant, which means that they don’t affect the overall results.
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Gender -,345 ,467 ,547 1 ,460 ,708
Constant 1,073 ,732 2,151 1 ,142 2,926
a. Variable(s) entered on step 1: Gender.
Table 6. Regression analysis of gender and employee participation in EVPs Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Children -,085 ,464 ,034 1 ,854 ,918
Constant ,709 ,723 ,963 1 ,327 2,033
a. Variable(s) entered on step 1: Children.
26 Since age is measured on an interval scale, I measure the predictive power of this control variable on the dependent variable with the linear regression analysis. We can interpret the findings below, which tells us that age provides no significant result. This means that age does not affect my overall findings.
Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
(Constant) 1,605 ,205 7,832 ,000
AgeRecoded ,001 ,005 ,016 ,134 ,893
a. Dependent Variable: Employee participation in EVPs
Table 8. Regression analysis of age and employee participation in EVPs
4.2 Secondary data
Now that I have elaborated on the statistical results, I will consider the written reports of the company and take a look at 3rd party ratings concerning CSP. I assess the increased importance of CSR through the amount of annual publications on CSP over the years. From table 9 below, we can derive that the company’s importance on CSR has increased.
The amount of pages dedicated to CSR activities in the annual report
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
3 2 3 2 4 5 6 6 8 10 10 13
Table 9. Amount of pages on CSR activities reported annually
27 well. According to ‘Intermediair Imago Onderzoek’, the company scores highest on employee satisfaction. Thecompany scores number one, well above competing banks. In addition, the market research institute ‘Profundo’ provides a report on several sustainable aspects, such as human rights, health, nature, bonuses, taxes, transparency and many others. According to this report, the company scores in the top three of banking companies. Another rating agency is ‘Oekom research’. They conducted research towards sustainable investments of banks worldwide and rated them individually accordingly. The company receives an average C+ rating on sustainable investments, which is between rated above ‘medium’ and below ‘good’ (D- is the minimal score, A+ the maximum). Finally, when we look at the sample population, we can tell that 29 out of 81 employees (36 percent) participated in CSR activities (table 1). This tells us that social involvement is not only on the corporate agenda to for external publications and the company’s image, but the company is truly involved in social responsibility and they direct their employees to achieve social performance. According to before mentioned results, we can conclude that the company performs high on social performance.
5. Discussion and conclusion
28 guaranteed. In addition, intrinsic motivation could have no influence on participation in my research, because the intrinsic motivation may be crowded out by the salary pay, (which can be viewed as an extrinsic reward), crowding out the intrinsic motivation in participation (Deci, 1975).
Providing monetary extrinsic rewards in formal tasks and work responsibilities on the other hand, is an important determinant, negatively affecting voluntary participation in CSR activities (.076<significant p value). Providing for instance a salary raise, a bonus or a 13th month salary to managers and employees, results in reluctance of participation. Providing extrinsic rewards results in the direction of time and effort towards achieving the formal tasks and work responsibilities instead of voluntary participation in EVPs. Monetary rewards are a form of reward that is often linked to performance. This finding is in accordance with prior literature, which states that management control can be achieved by making use of formal measurement and monetary rewards (Merchant et al., 2003). The managers of the company direct their time and effort towards the formally measured goals. The managerial implication is that the provision of extrinsic (monetary) rewards influences participation in EVPs. The company can attain higher participation in social activities if they formally measure participation in such activities. In that way, managers will direct their time and effort towards achieving social performance.
Organizational citizenship behavior also affects participation (.002>significant p value). Here, however, we find a positive relationship. Increasing interaction, interdependence and shared understanding of purpose, process and outcomes of employee behavior, results in employee participation in CSR activities. This finding supports prior literature which states that workplace climate and voluntary behaviors can contribute to improving organizational operations and performance (Niehoff, 2005). This finding shows the impact of the workplace climate in performing tasks which are not explicitly required nor evaluated in performance measures. The managerial implication is that the provision of interaction, interdependence and shared understandings of purpose, process and outcomes of employee behavior can increase the company’s social performance.
29 effort in formal tasks and work responsibilities, which are formally managed. The voluntary programs may not be perceived by the employees as an activity through which they can show their gratitude of the pleasant working conditions, because these activities are not communicated to be formal tasks or responsibilities. Therefore, satisfied employees may direct time and effort towards formal tasks and responsibilities in showing their gratitude, instead of participating in voluntary CSR activities.
Finally, I found a significant negative relationship between communication and employee participation in EVPs (.004<significant p value). As prior literature indicated, communication influences employee awareness, understanding and appreciation of the strategic goals and activities towards CSR (Lauringet al., 2009). What was not expected is the direction of the relationship between communication and employee participation. I find that employees who received higher communication concerning CSR activities are more likely not to participate in CSR activities. When I look at what kind of employees would have received more communication than other employees, these are most likely the managers. They are the ones responsible for communicating CSR practices to lower level employees. Managers may be the ones receiving the most information regarding CSR activities, but simultaneously they are the ones who most probably receive extrinsic rewards and prefer to direct effort in achieving formal goals rather than participation of CSR activities. This would mean that although managers are aware of the CSR strategic goals and activities, they rather direct time and effort towards achieving goals through which they can receive extrinsic rewards. So again, if the company wants their managers to become more focused towards CSR goals and activities and if the company wants the employees to participate in CSR activities, they could set CSR targets for the managers, which are formally measured and rewarded.
30
6. Limitations and future research
As in many research, my study is subject to certain limitations. First, my research focused on a banking company which scores high on social performance. Other industries however could perform different on social performance. Such differences limit the generalization of my findings. Future research could provide insights in differences in external pressure towards CSP and the impact this has on the focus of companies towards CSR. This could provide insights in differences between high and low social performing companies and whether these companies are truly involved in society or that they merely satisfy stakeholders. This elaborates on my findings, since I researched whether a company with high social performance was truly involved in society. Second, in my study I applied cross-sectional data. This refers to data collected by observing many subjects (in my case individuals) at one point in time, with no regard to differences in time. Due to the cross-sectional design of the study, I am unable to determine the direction of causality. Therefore I have to be warranted for the possibility of a bidirectional relationship. Future research should be directed at a longitudinal study to overcome the above stated limitation. Finally, in my results I saw that intrinsic motivation is no determinant for employee participation in CSR activities. This could be due to the crowding out effect of extrinsic motivation through salary pay. Further research could focus on volunteering programs in which employees can participate outside working hours. This could result in employees participating because of intrinsic rewards.
31
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36
8. Appendix
8 A. Descriptive statistics of control variables ‘’age, children and gender’’
AgeRecoded
Age Frequency Percent Valid Percent Cumulative
37 55,00 1 1,2 1,3 94,7 56,00 1 1,2 1,3 96,1 57,00 1 1,2 1,3 97,4 60,00 2 2,5 2,6 100,0 Total 76 93,8 100,0 Missing System 5 6,2 Total 81 100,0 Children
Children Frequency Percent Valid Percent Cumulative
Percent
1,00 (yes) 43 53,1 53,1 53,1
2,00 (no) 38 46,9 46,9 100,0
Total 81 100,0 100,0
Gender
Gender Frequency Percent Valid Percent Cumulative
Percent 1,00 (yes) 43 53,1 53,8 53,8 2,00 (no) 37 45,7 46,3 100,0 Total 80 98,8 100,0 Missing 1 1,2 Total 81 100,0 Statistics
Statistics AgeRecoded Children Gender
N
Valid 76 81 80
38
8 B. Questionnaires; Dutch and English
Intrinsieke motivatie
1. Ik doe verschillende dingen in het uitvoeren van mijn werk, gebruikmakend van een variëteit van talenten(IM1)
2. Mijn werk taken hebben een duidelijk begin en eind en zijn geen deel van het grotere werk, dat wordt afgerond door andere mensen (IM2).
3. De resultaten van mijn werk hebben aanzienlijk invloed op het leven of welzijn van andere mensen (IM3).
4. Ik kan mijn taken zeer zelfstandig uitvoeren, heb veel autonomie in mijn werk (IM4).
5. Ik krijg na het uitvoeren van mijn werk duidelijke feedback over de geleverde prestaties (IM5). Extrinsieke motivatie
1. Ik word bij het leveren van goede prestaties beloond door bv een salarisverhoging, een bonus of een 13e maand salaris (EM1).
2. Ik word bij het leveren van goede prestaties beloond door bv een auto op kosten van het bedrijf, verkrijgen van een mobiele telefoon of doorgroeimogelijkheden (EM2).
Baan tevredenheid
1. Ik haal voldoening uit mijn werk (JS1).
2. Ik vind mijn werk leuker dan de gemiddelde persoon(JS2). 3. Ik ben enthousiast over mijn werk (JS3).
4. Ik ben tevreden met mijn werk (JS4). Communicatie
1. Ik krijg regelmatig informatie in de vorm van team bijeenkomsten, geschreven letters, email, memos, rapporten of formele afspraken met collega’s over duurzame projecten die door de lokale bank worden uitgevoerd (C1).
39 Organisatie gedrag
1. Ik moedig mijn colleges aan om milieubewuster te worden (OCB1).
2. Zelfs als ik druk ben, ben ik bereid om tijd vrij te maken om informatie te delen met nieuwe collega’s omtrent maatschappelijke projecten(OCB2).
3. Ik neem actief deel aan maatschappelijke projecten opgezet door het bedrijf(OCB3).
4. Ik stel nieuwe praktijken voor die de maatschappelijke prestatie van het bedrijf kunnen verbeteren(OCB4).
5. Ik blijf op de hoogte van maatschappelijke initiatieven van het bedrijf(OCB5). Werknemersvrijwilligerswerk
40
Questionnaire (English)
Intrinsic motivation
1. How much variety is there in your job? (IM1)
2. To what extent does your Job involve doing a "whole' and identifiable piece of work? (IM2) 3. In general, how significant or important is your Job? (IM3)
4. How much autonomy is there in your job? (IM4)
5. To what extent does doing the job itself provide you with information about your work performance? (IM5)
Extrinsic motivation
1. In achieving good results I get rewarded by for instance a salary raise, a bonus or a 13th month salary. 2.In achieving good results I get rewarded by for instance a car at the expense of the employer, the use of a mobile phone or career opportunities.
Job satisfaction
1. I find real enjoyment in my job (JS1).
2.I like my job better than the average person (JS2). 3. Most days I am enthusiastic about my job (JS3). 4. I feel fairly well satisfied with my job (JS4). Communication
1. I communicate with one or more members of the project team through project team meetings written letters, memos, reports, appointments (C1).
41 Organizational citizenship behavior
1. I encourage my colleagues to adopt more environmentally conscious behavior (OCB1).
2. Even when I am busy, I am willing to take time to share information on environmental issues with new colleagues (OCB2).
3. I actively participate in environmental events organized in and/ or by my company (OCB3). 4. I suggest new practices that could improve the environmental performance of my organization (OCB4).
5. I stay informed of my company’s environmental initiatives (OCB5). EVP
42
8 C. Reliability analysis of the instrument items
43
8 D. Descriptive statistics of the variables
Descriptive Statistics
IM2 N Minimum Maximum Mean Std. Deviation
Intrinsic motivation 81 1 7 4,07 1,531
Valid N (listwise) 81
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Job Satisfaction 81 3,00 7,00 5,3272 ,99266
Valid N (listwise) 81
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Communication 81 1,50 7,00 4,0494 1,18217
Valid N (listwise) 81
Descriptive Statistics
N Minimum Maximum Mean Std. Deviation
Organizational Citizenship Behavior
81 1,00 6,20 3,3605 1,03509
Valid N (listwise) 81
Extrinsic motivation (monetary rewards)
EM1 Frequency Percent Valid Percent Cumulative
Percent
Yes 54 66,7 66,7 66,7
No 27 33,3 33,3 100,0
Total 81 100,0 100,0
Extrinsic motivation (non-monetary rewards)
EM2 Frequency Percent Valid Percent Cumulative
Percent
Yes 25 30,9 30,9 30,9
No 56 69,1 69,1 100,0
44
8 E. Eigenvalues factor analysis
Total Variance Explained
Component Initial Eigenvalues Extraction Sums of Squared
Loadings
Rotation Sums of Squared Loadings Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative % 1 5,165 43,039 43,039 5,165 43,039 43,039 3,422 28,513 28,513 2 2,163 18,021 61,060 2,163 18,021 61,060 3,106 25,880 54,393 3 1,125 9,377 70,437 1,125 9,377 70,437 1,636 13,637 68,030 4 ,832 6,931 77,367 ,832 6,931 77,367 1,120 9,337 77,367 5 ,672 5,603 82,970 6 ,500 4,170 87,140 7 ,394 3,287 90,427 8 ,350 2,917 93,344 9 ,306 2,548 95,893 10 ,228 1,900 97,793 11 ,170 1,419 99,212 12 ,095 ,788 100,000
