Daniel Korschun, assistant professor of marketing in the LeBow College of Business, co-authored a study and subsequent article titled “Corporate Social Responsibility, Customer Orientation, and Job Performance of Frontline Employees,” published in the May 2014 issue of the Journal of Marketing.
His study concluded that frontline employees who identify with the company as a result of its Corporate Social Responsibility — the practice of a company taking responsibility for its corporate actions and any detrimental effects they may have — are 87 percent more likely to be among its best performers and twice as likely to intend to remain employed at the company for more than a year.
While most research in the past studied the impact of CSR from the perspective of the company, this study is the first to analyze the effects of CSR from the perspective of individual employees.
The study examined the link between CSR and job performance in frontline employees by matching employee surveys with supervisor evaluations of job performance of 221 frontline employees at a Global 500 financial services firm. Frontline employees are defined as employees whose primary role involves interacting with customers such as salespeople, customer service representatives, account managers and other similar professions. They are often caught in the middle trying to meet the competing demands of their organization and the customers and as a result often feel disconnected from both the company they work for and the customers they are expected to serve.
Frontline employees are the essential means through which companies interact with their customers, so the extent to which they achieve their objectives can have a huge impact on the company’s revenue.
Korschun’s research showed that CSR can have a direct impact on the individual job performance of these employees for three main reasons. The first is that corporate level CSR promotion allows employees who share that value to better identify with the organization. The bond built on CSR is one in which the employer and employee are working toward a common goal that transcends the company itself and as a result motivates the employee to work harder to achieve the goal.
Secondly, Korschun found that an employee receives a boost in self-esteem by being affiliated with a company actively involved in CSR. The increase in self-esteem also increases organizational identification and positively affects an employee’s behavior toward a customer.
Finally, the most unique find of this study is that employees use CSR to build a relationship not only with their company but with their customers. If both the frontline employees and the customer share a common CSR value, it helps the employees build a relationship with the customer and motivates the employees to please the customer.
“An employee told me that, once that bond is created, then they want to move mountains for that customer. So [a CSR bond is] very motivating from their side, and it’s something we’ve never seen in any other research before,” Korschun said.
According to Korschun, that doesn’t mean that companies should push CSR values on their employees in hopes of increasing job performance. Arm-twisting techniques often backfire and lead to declined performance or even the loss of an employee. Instead, Korschun suggests that the most effective CSR techniques involve those in which the employee is personally involved and “free to act on their own terms.”
Korschun said, “We find that the more people are personally involved, the more effective [CSR] is, the more it translates to better performance. Even if you ask an employee to give a check to a general fund, that might be nice, but if the employee can choose where the money goes, that’s even better. The more people are involved, the more they get to decide how CSR is enacted and the more they get to decide, the more they can tailor it to their personal needs.”
Companies that are most effective at promoting CSR often have management communicating their values to their employees on a daily basis in meetings and through announcements. The more the company builds the CSR values into the overall company strategy, the more successful the company is at promoting CSR.
Some programs that are effective are matching programs in which the company matches the dollar amount donated by employees and also allowing the employees decide which charity or organization receives the money. Another activity that is effective is the implementation of joint volunteering programs, in which both the frontline employees and customers work alongside each other.
“What happens is the next day, you go to work and the customer or someone that looks similar shows up, and now the employee and customer have something in common to talk about and build a relationship on,” Korschun said.
This study adds to the evidence that companies can substantially benefit from CSR investment if the programs are promoted effectively and managed wisely.