Note to bosses: workers perform better if you give to charity
February 05, 2015
Corporate philanthropy can inspire employees to knuckle down just as much as a pay hike, say Mirco Tonin and Michael Vlassopoulos, University of Southampton.
We are used to the idea that workers respond to financial incentives, whether it’s a bonus or wage increase, but it might be that bosses can boost workers’ performance by appealing to their altruism, not just their pockets.
As economies recover from the financial crisis, businesses have remained shy with the purse strings, but new evidence from our research has shown that involving employees in corporate philanthropy can offer the kind of motivation that we may have thought only money can buy.
Data from a survey of 261 leading US companies, including 62 of the largest 100 companies in the Fortune 500 list, reveals they contributed more than $25 billion in total giving in 2013, equivalent to around 1% of pre-tax profits, or more than $600 per employee. With that kind of commitment they’d better hope there is an effect on their employees.
To find out how corporate philanthropy affects productivity, we recruited more than 300 university students to enter bibliographical records. The job was set up so that they could work from home on their computer, at their own pace, without direct supervision.
In terms of compensation, we offered participants a fixed wage plus a bonus, relating pay to the amount of output produced. We varied the amount people would receive for each entry and observed their response in terms of productivity.