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School of Management

Royal Holloway, University of London

IRP title:

INFLUENCE OF CSR ON EMPLOYEE ENGAGEMENT

MSc International Management

Student Name: Aysenur Kinoglu

Candidate Number:1508574

Supervisor: Prof. Jos Gamble

Date of Submission: 21.08.2015

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Declaration

This independent research paper has been prepared on the basis of my own work and

that where other published and unpublished source materials have been used, these

have been acknowledged.

Word Count: 9.998 (Cover page, table of contents, abstract and references are not

included)

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Abstract In recent years, Corporate Social Responsibility (CSR) has become a hot topic for

many companies’ agenda. Most of the researches focus on financial returns of CSR

in terms of profit, sales, customer retention. However, CSR has also become an

important tool to engage employees in organizations. Many young individuals in the

first step of their careers eager to work for organizations contributing the society by

improving welfare in their internal and external environment. CSR strategies of

Human Resources (HR) in companies have various impacts on employee engagement.

Previous researches on CSR and HR relation are mainly based on organizational

commitment. Engagement and commitment are relevant to a certain extent but

different concepts to use in the same context; therefore, CSR effect on these concepts

should be addressed distinctively. This paper aims to discuss the impact of CSR on

employee engagement and on “Organizational Citizenship Behavior” (OCB). The

IRP follows qualitative analysis and uses secondary data to explain the main research

questions. The research uses interpretivism as a research philosophy and deductive

approach as a research methodology. The key findings of this IRP are that firstly,

CSR affects employee engagement through organizational identification and trust.

Secondly, even though CSR is influential on engagement, there can be less engaged

or disengaged employees due to differences in the perceptions of CSR. This research

paper proposes that by increasing awareness about CSR, embedding CSR into

organizational culture and involving employees in CSR programs can enhance the

engagement levels in the organizations. Therefore, it is important for organizations to

incorporate their employees into CSR activities to boost their performance and

motivation. The CSR influence on engagement contributes the overall performance of

companies by decreasing employee turnover and increasing efficiency and also by

bringing in willing and innovative individuals to workforce.

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Table of Contents

1. INTRODUCTION......................................................................................................................................... 5

2. LITERATURE REVIEW.......................................................................................................................... 6 2.1 THE DEFINITION OF EMPLOYEE ENGAGEMENT .................................................................................... 6 2.2 SOCIAL EXCHANGE THEORY AND EMPLOYEE ENGAGEMENT ...........................................................13 2.3 HOW EMPLOYEE ENGAGEMENT CONTRIBUTES TO ORGANIZATIONS?...........................................13 2.4 CSR AND EMPLOYEE PERCEPTION ........................................................................................................15 2.5 CSR INFLUENCE ON EMPLOYEE ENGAGEMENT ..................................................................................18

3. METHODOLOGY .................................................................................................................................... 20 3.1 RESEARCH QUESTIONS ............................................................................................................................20 3.2 RESEARCH DESIGN....................................................................................................................................21 3.3 DATA EVALUATION ...................................................................................................................................24

4. FINDINGS & DISCUSSION ................................................................................................................ 26 4.1 HOW DOES CSR AFFECT THE EMPLOYEE ENGAGEMENT? .................................................................26 4.2 HOW CSR CONTRIBUTES ORGANIZATIONAL CITIZENSHIP BEHAVIOR (OCB) OF EMPLOYEES IN

THE ORGANIZATIONS? .....................................................................................................................................29 4.3 HOW CAN ORGANIZATIONS ENGAGE “LESS ENGAGED EMPLOYEES” THROUGH CSR? ..................32

5. CONCLUSION............................................................................................................................................ 34

6. LIMITATIONS & FURTHER RESEARCH AREAS .............................................................. 35

7. REFERENCES ............................................................................................................................................ 36

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1. Introduction Over the last decades, CSR has been discussed by media and academics that arouse

the interest of the society. Many organizations have started to consider CSR as a

competitive advantage towards their competitors (Slack et.al, 2014). The motivation

behind the competitive advantage is that CSR is influential tool for profit goals,

customer retention and reputation (Choi and Yu, 2014). However, it is insufficient

argument to explain the gains of organizations solely through organizations’ CSR

activities. There is a significant relation between CSR activities and employee

engagement that enhances the profitability and organizational performance (Cooper

and Wagman, 2009). Previous research have examined the relationship of CSR and

organizational commitment but comprised limited information about employee

engagement. This paper aims to contribute this research area by differentiating

engagement from some similar concepts in literature and examining its relationship

with CSR. Commitment, satisfaction, involvement and engagement concepts are used

interchangeably in some contexts; however, they take place in the different scopes of

the literature (Hallberg and Schaufeli, 2006).

Engagement can be defined as an emotional connection to the organization, which

affects employees’ behaviors and performance level in work-related activities (ibid).

Engagement covers the nature of job itself since if employees realize that organization

supports the trust and communication between employees and management,

employees become aware of their contributions to organizational performance (ibid).

They can perceive that organization works for its employees to have better growth

opportunities in the organization (ibid). There are significant contributions of engaged

employees in organizations in terms of social-well being in workplace environment

and achieving the business goals (ibid). High level of employee engagement gives rise

to good quality of service, which results in higher customer satisfaction, sales, profit

and shareholder returns (ibid). Employee engagement is a non-eligible factor for

organizations in order to increase their business outcomes. Therefore, organizations

need to find out drivers of engagement and consider as a part of corporate culture.

Several researches point out particular evidence that CSR activities of organizations

are one of the drivers of employee engagement (Mirvis, 2012). CSR contributes

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engagement in a way that the feeling of working for a good company attracts

employees, which results in long term loyalty and lower turnover rates (Ferreira and

Real de Oliveira, 2014). CSR enhances employee engagement by display

discretionary and extra-role behaviors, defined as “Organizational Citizenship

Behavior” (OCB) (Newman et.al, 2014). OCB is based on “Social Exchange Theory”,

which explains the effect of organizational practices on employee engagement from a

theoretical perspective based on reciprocity norm (Choi and Yu, 2014).

This paper aims to explore CSR as a driver of employee engagement and contribute

this under-researched topic through qualitative research methodology. The objective

of research is to answer following questions: (a) How does CSR affect the employee

engagement? (b) How CSR contributes organizational citizenship behavior (OCB) of

employees in organizations? (c) How should organizations engage less engaged

employees through CSR? The research is organized as follows: Section II-Literature

review, Section-III Methodology, Section-IV Findings and Discussion, Section-V

Conclusion and Section-VI Limitations and Further Research areas.

2. Literature Review

In this chapter, firstly detailed definition of employee engagement concept and its

evolution will be explained. Then different scholars’ perspectives will be discussed

and the reasons behind the benefits of employee engagement to organizations will be

explained. Then, ever-growing definitions of CSR and employees’ response to CSR

will be discussed. Thereafter as a main discussion topic, CSR and employee

engagement relation will be examined.

2.1 The Definition of Employee Engagement

The employee engagement concept has no single dominant definition in the literature.

During its evolution period, practitioners and academicians have come up with

several distinctive definitions (Shuck, 2011). Practitioners approach employee

engagement from performance perspectives whereas academicians put emphasis

mainly on psychological state of an individual (ibid). It is important to evaluate

employee engagement from both aspects since it can be ill-defined denotation to

address solely on psychological or on performance angles (Macey and Schneider,

2008). Firstly, evolution of the concept will be examined by four different

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perspectives and more recent conceptualization of employee engagement will be

discussed in the following section.

2.1.1 Evolution of Employee Engagement Concept

In the literature, Kahn, Maslach, Harter and Sacks are seen as pioneers of the

employee engagement concept (Shuck, 2011). Therefore, in this section I will discuss

their different perspectives on engagement.

Kahn (1990):

Kahn has contributed the definition of employee engagement by defining the different

models such as cognitively engaged, physically engaged and emotionally engaged

(Shuck, 2011). He structures these models on psychological domains, which are

meaningfulness, safety and availability (ibid). Meaningfulness is the extra value and

effort put on work performance when employees feel themselves that they are

significant and valuable for the organization (Kular et al., 2008). Safety is the degree

of trust towards organization in terms of clear-cut specification of an employee’s task

at the work (ibid). Each employee needs to feel confident in work environment and to

be aware of what is expected of her/him at the work (ibid). Lastly, availability is the

possessing the necessary sources in full in order to maintain their tasks at the work

(ibid). These resources can be considered as monetary policies, social benefits,

training and workplace environment (ibid). Briefly, according to Kahn, employees ask

whether it is meaningful or not to display this performance and they question that is it

safe to do so? Lastly, asks how they are available to perform the task. Since 1990s,

Kahn’s framework has been one of the most popular frameworks for developing

employee engagement in organizations (Shuck, 2011).

Maslach (2001):

Maslach contributes the definition of engagement by defining opposite of negative

and disintegrated state of an individual (Shuck, 2011). According to Maslach,

engagement is opposite of “burnout”, which implies the one’s disintegration with

his/her job (ibid). He defines three different concepts opposite to engagement such as

exhaustion, cynicism and ineffectiveness (Kular et al., 2008). Exhaustion is the

feeling of both psychologically and physically overextended (ibid). Cynicism is the

discouragement and dispassionate behaviors of an employee towards his/her job

(ibid). Ineffectiveness is that when employees feel ineffective, they have a sense of

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professional inadequacy (ibid). However, the main criticism for Maslach’s approach

is that it is lack of cognitive perspective projected by Kahn since he predominantly

focuses on emotional and physical parts of burnout (Shuck, 2011).

Harter (2002):

Harter enhances the definition of employee engagement by using the Gallup

organization’s data on different industry fields (Kular et al., 2008). Harter defines

employee engagement as the degree of involvement and satisfaction of an employee

at the work (ibid). Job involvement is defined as degree to which job is central to

employees’ identity (Krishnan et.al, 2009). Whereas job satisfaction is considered as a

positive emotional state due to the appraisal of one’s job experiences (ibid). Harter

also found out a positive relationship between employee engagement and business

outcomes since according to him; engaged employees brings efficiency and

productivity to organizations (ibid).

Sacks (2006):

Sacks is the first academician to differentiate the job engagement and organizational

engagement concepts by developing social exchange model (Shuck, 2011). Sacks

describes employee engagement in three elements as cognitive, emotional and

behavioral that are mainly integrated with the work performance (ibid). He argues that

since the resources and benefits are offered to employees, they are willing to pay back

their organizations to express their satisfaction and engagement with their

organization (Kular et al., 2008). As Kahn (1990) states, employees adjust their

engagement levels by depending on amount of resources dedicated to them since they

look for reciprocal relationships.

In this part, I explained the various important perspectives and evolution about the

definition of employee engagement by different scholars. Each scholar approaches the

engagement concept from similar perspectives but builds arguments by extending the

definitions of previous concepts. In next part, I will focus on the constituent concepts

of engagement in order to have clear understanding of employee engagement.

2.1.2 Understanding of Employee Engagement and Its Main Components

Macey and Schneider (2008) constitute a framework for employee engagement by

depending on antecedent discussions and perspectives about the concept. According

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to their research, engagement has been used to connote involvement, commitment and

mood as a psychological state or OCB and role expansion as a performance criterion.

In this chapter, the insight of the concept will be discussed and its components will be

examined. The stated conceptualization of engagement will be taken as a basis

throughout the paper.

Engagement consists of three main elements (Macey and Schneider, 2008) as shown

in Figure 2.1.1. State engagement covers satisfaction, involvement, commitment and

empowerment and behavioral engagement includes OCB, role expansion whereas

trait engagement contains personality and conscientiousness (ibid). Psychological

aspects of engagement mostly take place in state engagement (Maslach, 2004).

Behavioral engagement explains mainly extra-role behaviors of individuals and trait

engagement discusses positive perception of employees towards their work (Macey

and Schneider, 2008).

Figure 2.1.1

EMPLOYEE ENGAGEMENT

TRAIT ENGAGEMENT

STATE ENGAGEMENT

BEHAVIORAL ENGAGEMENT

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State Engagement

Terms satisfaction, work engagement and commitment in state engagement cause

confusion since they can be used interchangeably. However, these constructs have

different explanations (Shuck, Reio and Rocco, 2011).

Work Engagement:

Work engagement is considered as full dedication and energy of an employee towards

his or her task (Schaufeli, 2006). Utrecht Work Engagement Scale determines three

dimensions for work engagement such as vigor, absorption and dedication (Bakker

et.al, 2011). Vigor is described as high levels of energy while working, one’s

willingness to put effort in his or her task and persistence in case of any difficulty

(ibid). Absorption is the state of full engagement and high concentration about work

that one cannot separate his or herself from work (ibid). Lastly, dedication can be

described as a sense of pride, enthusiasm for being employed by organization and a

belief that each employee’s effort and endeavor is significant for organization (ibid).

Organizational Commitment:

Tiwari and Singh (2014) define organizational commitment as individual’s ability to

identify his/herself with organizational goals and values. Organizational commitment

is based on three-component model as affective commitment, continuance

commitment and normative commitment (Dick et.al, 2007). Affective commitment is

the emotional attachment to the organization (ibid). Employees enjoy the relationship;

therefore, they want to stay in the organization (ibid). Affective commitment is

related with the high level of performance since employees having affective

commitment are more likely to engage in OCB (ibid). Continuance commitment is

that employees prefer to stay in the organization since leaving the organization may

be costly and they may feel that they will lose their social status. Employee’s

perception is shaped that they must not leave their organizations (ibid). Lastly,

normative commitment is that employees feel under an obligation because they

believe that staying in the organization is the right thing (ibid). Therefore, employees

think that they have to stay in the organization (ibid).

For instance; an employee works in one of the top pharmaceutical companies, which

presents decent opportunities and salary. Employee feels happy and important in the

organization. Employee has affective commitment since he or she feels happy and

wants to stay. Employee also has continuance commitment since he or she works in

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one of the best companies, earning good amount of money and having prestige.

Lastly, employee may have normative commitment since he or she may be the key

person due to the nature of his or her job in the organization. Therefore, he or she

feels obliged to stay in order to contribute particular research for the benefit of

society. Therefore, these three components are considered to be influential on

employee turnover rates and work performance in the organizations (Dick et.al,

2007).

Job Satisfaction:

Weiss (2002) states that job satisfaction is an emotional state. He defines as one’s

valuation of his/her job as an accomplishment for attaining individual goals. It is

positive or negative feeling due to the outcome of overall individual evaluation of

experiences during the work time (Weiss, 2002). However, although satisfaction is

related with engagement, it mainly connotes the feeling of contentment and prosperity

during the action; therefore, measuring satisfaction by itself does not give healthy

results for engagement (Hallberg and Schaufeli, 2006).

Behavioral Engagement

Behavioral engagement is the deliver of performance beyond the expected average

level (Kahn, 1990). Behavioral engagement is not only putting superior physical

performance but also being innovative, efficient (ibid). OCB is one of the main

elements of behavioral engagement, which occupy an important place in literature

(Borman, 2004).

Organizational Citizenship Behavior (OCB):

Although OCB has not had considerable effect in practice yet, organizations have

started to be interested in (Podsakoff, 2000). Since 1960s, OCB has been defined as

“extra-role behavior”, which expresses the discretionary behavior of an individual

without recognizing any reward system (ibid). Organ (1997) defines discretionary

behavior as follows:

“By discretionary, we mean that the behavior is not an enforceable requirement of the role or the job description, that is the clearly specifiable

terms of the person's employment contract with the organization; the behavior is rather a matter of personal choice, such that its omission is not generally understood as punishable” (Human performance, 10(2), pp.85-97)

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Organ’s definition of OCB is widely taken as a basis in literature. According to him;

OCB contributes organizational effectiveness not only by boosting innovations and

productivity but also by decent relationships with co-workers at the work (Dicke et.al,

2007). Engaged employees involve more in OCB compare to disengaged employees

(Newman et.al, 2014). Employees can show their OCB in five different ways such as

sportsmanship, altruism, courtesy, conscientiousness and civic virtue (ibid). These

five dimensions are categorized under two main branches as OCB-0 and OCB-I

(Jahangir et.al, 2006). OCB-I behavior is for the benefit of individuals, which

includes courtesy and altruism whereas OCB-0 behavior is for the benefit of

organizations with sportsmanship, civic virtue and conscientiousness (ibid).

Altruism connotes to enthusiasm to assist people in organization with no thought of

personal gain (Dicke et.al, 2007). Conscientiousness is to perform above minimum or

expected level in the organization (ibid). Sportsmanship is the displaying no negative

behavior when he/she experiences with difficult tasks or things that do not go as

planned (ibid). Courtesy is to exhibit polite and thoughtful behaviors towards

colleagues, which enhances the social interactions in workplace environment (ibid).

Lastly, civic virtue is the representation of organization by employees outside of the

organization (ibid). Civic virtue enables employees to feel strongly connected to their

organization, which leads to increased productivity and efficiency in the organization

(Dicke et.al, 2007). Within the scope of this research, organizational dimension of

OCB (OCB-0) will be discussed in line with employee engagement.

Trait Engagement

Trait engagement covers the personality dimension of engagement such as proactive

personality, conscientiousness (Macey and Schneider, 2008). Trait engagement refers

to having positive approach and constructive experience at work (ibid). Trait

engagement has a connection with behavioral and state engagement since it enables

individuals to go beyond their normal tasks and outperform while having job

satisfaction. Proactive personality is defined as the ability of establishing or

influencing work environment in terms of boosting performance and increasing

productivity (ibid).

According to Kahn (1990) and Maslach (2004) these dimensions point out the

necessary elements of engagement, however, they do not give full evidence about

why different individuals have varying levels of engagement. They bring forward that

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social exchange theory constitutes solid ground and gives the reasoning behind being

less or more engaged. The following chapter will discuss the relation between

engagement and social exchange theory.

2.2 Social Exchange Theory and Employee Engagement

Social exchange theory is a widely used framework to establish theoretical ground for

employee engagement with regards to norm of reciprocity (Settoo et.al, 1996). Social

exchange theory points out that when employees have positive and helpful

relationship, they feel obligated to reciprocate in the same manner (ibid).

Eisenberger et al. (2001) support this argument depending on his research and adds

that employees’ perceptions of organizational support make them contribute the

organizational goals. Perceived organizational support is emphasized in social

exchange theory, which connotes that employees believe that organization values

their well-being and tries to fulfill their needs (ibid).

However, this situation varies from person to person since employees having weak

exchange ideology, who values the reciprocity norm less, do not have the feeling of

obligation as employees having powerful exchange ideology (Eisenberger et al.,

2001).

Konovsky and Pugh (1994) point out that trust is the most important factor for the

first step of social exchange formation. Relational trust enables employees to involve

in tasks, which are not mandatory and to contribute organizations continuously

(Konovsky and Pugh, 1994). Therefore, when trust is established, perceived

organizational support reaches higher level, which motivates employees to go beyond

their expected tasks.

2.3 How Employee Engagement Contributes to Organizations?

In order to understand why employee engagement is an important topic for

organizations, we should understand how it avails to organizations. I discussed the

OCB concept in the explanation of employee engagement definition and its

components. I explained how employee engagement is beneficial through

discretionary efforts and extra role behaviors of employees. In this chapter, the

contribution of engagement to organizations will be examined on the basis of OCB.

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The concept of organizational effectiveness can be defined as the degree which

organizations achieve their goals (Kataria et.al, 2013). Efficient organizations have

three different characteristics such as productivity, adaptability and flexibility (ibid).

In order to fulfill these dimensions, employees’ contributions are essential for two

reasons (Albrecht et al., 2015). Firstly, engaged employees display innovative and

proactive behavior and affect their environment in this direction (ibid). Since engaged

employees are flexible enough to external changes or difficulties, they make their

organizations flexible as well as a feature of efficient organizations (ibid). Secondly,

engaged employees work with passion, they try to produce high quality goods in

order to take their organizations further (ibid).

Engaged employees are inclined to display OCB such as more brain-power, extra time

and energy for their task (Kataria et.al, 2013). In the frame of OCB, engaged

employees are more positive to use their personal resources and more confident to

perform extra-role behavior (ibid). The research of Kataria et.al (2013) suggests a

relationship between efficient organizations and employee engagement can be

visualized as shown in Figure 2.3.1

Figure 2.3.1

There is a link with between organizational efficiency and engagement that leads

organizations to have high level of productivity, competitive advantage and low level

of turnovers (Slåtten and Mehmetoglu, 2011). It is an important competitive

advantage since it is a unique internal resource of organizations that competitors

cannot imitate or adopt easily (ibid). Therefore, organizations need to improve the

Employee Engagement

• Behavioral

• Trait

• State

OCB

• Sportsmanship

• Civic Virtue

• Conscientiousness

Organizational Effectiveness

• Flexibility

• Adaptability

• Productivity

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level of employee engagement and embed into organizational culture in order to take

an advantage of OCB for their business goals (Albrecht et al., 2015).

2.4 CSR and Employee Perception

2.4.1 Evolution of CSR Definit ion

CSR has become mainstream in businesses in current years (Baker, 2004).

Organizations and people has started to revise their priorities for next years and most

of them denote that specially the environmental well-being will be the heart of our

future (ibid). On the other hand, there are many debates about how organizations

perceive and represent CSR activities in line with definition of CSR (ibid). Most of

the debates go around financial aspects of CSR that some of the companies are

hopeful about profit return due to the consumer attraction (ibid). In consequence of

many discussions and organizations’ decent and unpleasant experiences, definition of

CSR and its dimensions have been altered since 1950s (Rahman, 2011). In this

chapter, previous conceptualizations and more recent definition of CSR will be

discussed.

1950s:

In 1950s, discussions about CSR began with questioning the responsibilities of

businessmen towards society (Rahman, 2011). According to Bowen (1954), it is a

mandatory task of businessmen to follow CSR practices and take decisions

accordingly, which are beneficial for welfare of the society. In same period, Heald

(1957) constructs an enhanced definition that CSR should be mandatory at the

management level and the overall goals should not only be based on financial returns

but also society well being.

1970s:

During 1970s, Friedman approached CSR from distinctive perspective compare to

previous scholars. According to Friedman (1970), organizations have single objective,

which is to increase profit in order to survive in competition. In 1970s, new

definitions of CSR arose and different dimensions were put forward such as social

accounting, social audit and social indicators (Rahman, 2011). On the other hand,

Sethi (1975) conceptualizes and differentiates CSR from corporate behavior as social

duty, social responsibility and social responsiveness. Preston and Post (1975) defines

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that organizations do not have unlimited responsibilities as a concept of social

responsibility but it should be placed among the priorities of organizations.

1990s:

In 1990s, there were fewer contributions for development of CSR concept (Rahman,

2011). Elkington (1997) structures CSR on three layers, which are planet, profit and

people. According to him, social responsibility brings economic prosperity, social

equity and environmental care. If environment is protected, it is beneficial for society;

thus beneficial for profitability of business. Other scholars like Hopkins (1998) and

Woodward-Clyde (1999) define CSR as a responsibility both towards internal and

external stakeholders and also think as an agreement between organization and

society. Since society allows a license carry on a business, in return organizations

should follow the norms required by society.

21st Century:

Lantos (2001) suggests three distinctive kinds of CSR such as ethical, altruistic and

strategic. Ethical CSR requires that organizations need to be ethically responsible to

environments when they pursue their organizational goals. Altruistic CSR is the

voluntary activities that may lead to organizational or individual sacrifice. Lastly,

strategic CSR refers to community activities of organizations, which aims to achieve

strategic business goals. CSR have caused conflicts in businesses (Jamali and

Miurshak, 2007). Jamali and Miurshak (2007) explain that the conflict mainly has

arisen from lack of knowledge and experience. Since it has been unclear that which

and why organizations have obligations to follow CSR strategies in developing

countries, they do not feel responsible about being socially responsible.

In 2008, World Business Council construct the definition of CSR as follows:

“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” (World Business

Council for Sustainable Development, 2008).

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Figure 2.4.1

In this paper, CSR will be categorized in two main branches as internal and external

CSR due to gauge clearly the main hypotheses. External CSR defines CSR activities

for external stakeholder such as customers, social and non-social stakeholders

whereas internal CSR is for internal stakeholders such as employees.

2.4.2 Employee Perception of CSR

There are few studies about how CSR affects employees and their perception. The

recent findings demonstrate that CSR influences work outcomes positively (Farooq

et.al, 2014). It increases job satisfaction, organizational commitment through

organizational identification, which leads to higher job performance, quality of

products and lower turnover rates (ibid). Employees’ responses to CSR are mainly

50s• Responsibility to society

60s• Relationship between society and organizations

70s

• Stakeholder involvement

• Economic, ethical and legal responsibility to society

• Increasing quality of life

80s

• Voluntariness

• Financial returns of CSR

90s

• Planet, Profit and People

• Environmental considerations

2000s

• Human rights, labor rights, improving well being of society

• More transparency and accountability

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based on organizational identification in terms of a theoretical aspect (ibid).

Organizational identification is the recognition of belongingness to organization that

employee names him or herself as a member of an organization (Rodrigo and Arenas,

2007). In this chapter, employee perception of CSR will be mainly discussed through

organizational identification.

CSR and Organizational Identification:

Organizations’ social, consumer-based and environmental external actions are found

to be strongly influential on organizational identification (Farooq et.al, 2014).

Employees feel satisfied and proud when they work for an organization, which has a

powerful reputation because organizational identification is affected from

organization’s image and status (ibid). Employees can be sensitive about what

external audience thinks about their organization since the stakeholders, especially

consumers give feedbacks and rank organizations, which have impact on the image of

organizations (Rodrigo and Arenas, 2007).

Employees’ esteem towards their organization is as important as external image

(Farooq et.al, 2014). Employees’ assessments of their standing in the organization are

a significant determinant to understand the degree of respect to their organizations

(ibid). They need to perceive that they are decent and valuable members of

organizations (ibid). Programs like extensive training, career coaching and

involvement in decision-making process are contributive factors for internal CSR

actions (ibid). In addition to these, internal CSR enhances knowledge sharing among

employees through organizational identification (Farooq, et.al, 2014). Employees

become willing to share knowledge as they identify themselves more with the

organization, which leads organizations to have collaborative workforce and efficient

workflow as a strong competitive advantage (ibid).

2.5 CSR Influence on Employee Engagement

There are few studies on CSR and employee engagement in literature since employee

engagement concept itself is a relatively recent topic and its definition is not clearly

defined in many sources (Mirvis, 2012). The researches about the CSR and employee

engagement suggest that understanding of these concepts can benefit organizations

and their relationship can be contributive for organizations (Tariq, 2015). In this part,

I aim to examine the background of the relationship of these concepts in accordance

with their definitions.

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According to Tariq (2015), engagement is strongly related with how employees grade

their organization’s CSR actions. His research points out that employees, who are not

satisfied with organization’s commitment to CSR are less engaged in their jobs

compared to satisfied employees. If employees realize organization’s devotion to

CSR, they become more inclined to perform positive behavior, which results in higher

work performance (Tariq, 2015). Other benefits of CSR on employee practices are

reduction in turnover and attraction of prospective employees (ibid).

From theoretical perspective, researches suggest that the relation of employee

engagement and CSR grounds from social exchange theory (Slack et.al, 2014). In the

concept of employee engagement, OCB is the outcome of social exchange since

employees feel obliged to their organization (ibid). Abdullah and Rashid (2012)

support this argument relating to CSR that CSR activities have significant impact on

the reciprocity norm of employees, which enables employees to display more OCB-O.

They elaborate their research by examining influence of internal and external

dimensions of CSR. Abdullah and Rashid (2012) found out that internal and external

CSR actions both enhance OCB-O among employees. Hadad and Fallahi (2015)

contributes this argument explain that the components of OCB-0; civic virtue and

conscientiousness have powerful relationship with CSR implementations in the

organizations. Therefore, even if employees are not expected to perform

extracurricular activities such as learning additional information about work and

informing others defined as a part of civic virtue, they have desire to do voluntarily

(Hadad and Fallahi, 2015).

However, not every employee responds to CSR in a same manner since the level of

engagement with CSR differs among employees (Slack et.al, 2014). Rodrigo and

Arenas (2007) defines different types of classifications based on social exchange

theory, which explain the distinctive employee values towards CSR (ibid).

Rodrigo and Arenas (2007) classify employees as Committed, Indifferent and

Dissident. Committed employees are sensitive about social justice and engaged with

organizational CSR (Rodrigo and Arenas, 2007). Indifferent employees are pragmatic

and work-oriented (ibid). They understand the meaning and importance of CSR but

they do not involve personally (ibid). Dissident employees think that they have only

financial relation with organization without any wider social role (ibid).

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Social exchange theory is one of the explanations for different levels of engagement

among employees since it is based on reciprocity that explains how employees

perceive value gained from organization (Slack et.al, 2014).

In this part, I examined the influence of CSR on engagement on the basis of social

exchange theory. I focused on OCB and the relation with social exchange theory.

Moreover, I discussed the different levels of engagement among employees due to the

differences in perceptions of employees. In the following chapter, I will explain the

research methodology I used for analyzing the CSR and employee engagement

relation and other research questions. Moreover, I will also discuss the data used

during the research and give critical evaluation of using a particular type of data.

3. Methodology

In this chapter, research design, data used during the analysis and discussion of

adopted research process will be presented. There will be discussion about possible

research approaches for this study and justification of research process will be

explained. This chapter will also present data collection process and critical

discussion on the data used.

3.1 Research Questions

The purpose of this research paper is to examine relationship between CSR and

employee engagement as a descriptive study. The need for the study is based on

detailed view of literature review, which points out that CSR is an important driver of

employee engagement. Although employee engagement has been a recent concept in

practice, its benefits in terms of customer satisfaction, high level of performance,

innovation and cost efficiency has started to be realized by organizations (Slack,

Corlett and Morris, 2014). CSR is also significant concept, which has become

mainstream discussion topic for both literature and practitioners as discussed in the

literature review chapter. Organizations seize opportunity of CSR for both having an

engaged workforce and contributing to society at same time. My literature review

points out that there are only few studies about relationship between CSR and

employee engagement since many researches mainly focus on employee commitment,

job satisfaction and work engagement concepts solely or they only analyze influence

21

of CSR on business outcomes. This paper aims to contribute this research area by

answering following research questions:

How does CSR affect the employee engagement?

How does CSR contribute organizational citizenship behavior (OCB) of

employees?

How should organizations engage less engaged employees through CSR?

3.2 Research Design

3.2.1 Research Philosophy:

Understanding research philosophy is crucial to determine correct research design and

affect research process (Saunders et.al, 2012). There are two main research

philosophies as ontology and epistemology (ibid). Ontology is based on nature of

reality that questions the assumptions and particular views of researches (ibid).

Ontology comprises two approaches, which are objectivism and subjectivism (ibid).

Objectivism mainly presents the existence of social entities in reality disregarding

external social actors and assumes that all social constructs exist as function of

different objectives (ibid). On the other hand, subjectivism states that social structures

are originated from actions of social actors, in other words, the different

interpretations shape interactions and perceptions (ibid).

Epistemology questions the components of acceptable knowledge in a study and

searches for if reality can be studied with same basis as natural sciences (ibid). It has

three subtitles as positivism, realism and interpretivism (ibid). Positivist research

approach adopts philosophical view of natural scientist and has structured

methodology (ibid). Positivist researcher mainly gives importance to quantifiable

observations and statistical outcomes (ibid). Positivist researches are conducted in

value-free environment and researcher is neutral to data collected; therefore, outcome

of research is objective (ibid).

The second type of philosophical view of epistemology is realism, which is based

upon idea of “objects have an existence independent of human mind” (ibid). Realism

is opposite of idealism, which argues for only mind and its components have

existence (ibid). Realism follows similar path with positivism that questions the

development of knowledge scientifically (ibid).

22

Lastly, interpretivism puts emphasis on “social actors” that we construe our social

roles depending on meanings that we assigned to these roles (ibid). Also we

understand others’ roles with regards to our own set of meanings (ibid). Interpretivism

differentiates human and natural sciences from each other and states that researcher

should examine research subjects by following social constructs and understand ing

their effects on subjects (ibid).

3.2.2 Research Approach:

The theory of research underlies the design of research project and it is mainly

represented by two approaches as deductive or inductive (ibid). Deductive approach is

used when research starts with theory acquired from literature review and you

conduct the research in order to test the theory (ibid). In deductive research,

researcher explains causal links between concepts and establishes reasons (ibid).

Another characteristic of deductive research is that facts are measured quantitatively

in an operationalized way (ibid). Lastly, deductive research is based on generalization

as well (ibid). Sample data needs to be carefully chosen and in sufficient size in order

to generalize the findings (ibid).

On the other hand, inductive approach is followed when researcher starts with

collecting data to establish a theory or framework (Bryman and Bell, 2011).

Researcher tries to identify new patterns, relations or alter the existing theory (ibid).

Inductive researchers criticize the deductive approach due to its stiff methodology,

which does not allow alternative views and explanations (ibid). Inductive approach

mainly discusses context of events; thus, narrow-scoped subjects are more appropriate

compared to broader scope as with the deductive approach (ibid). Researches using

inductive approach work with qualitative data and follow different practices to collect

these data to cover different point of views about the subject (ibid).

3.2.3 Research Method:

The research philosophy and approach are instructive for establishing a correct

research methodology (Saunders, Lewis and Thornhill, 2012). This research paper

follows deductive approach, which explains arguments depending on an established

theory and qualitative method, which is based on more words than numbers. As

Saunders et.al (2012) discuss, qualitative method follows interpretive research

philosophy and this research paper is based on interpretivism. The data is analyzed in

order to describe relationship with CSR and employee engagement with the

23

theoretical support of Social Exchange Theory. There are few studies about this

relationship and few explanations about how they interact each other and also how

CSR contributes less engaged employees. Therefore, interpretive research philosophy

provides basis to use social constructs to define the social position of each concept in

the research. I will have to take interpretive approach since although there are

particular researches about the relationship of engagement and CSR, there is no

specific explanation how they interact each other and how emp loyees experience

through OCB concept. Therefore, interpretive perspective will be suitable for my

research. By using particular research philosophy and approach, data and relevant

materials are evaluated and interpreted in order to draw conclusions.

The secondary data is used for this research paper based upon two main reasons: time

and access. There are several advantages using secondary data (Bryman and Bell,

2011). It requires few resources that help researcher save money and time (ibid). Due

to the time constraint in this research, secondary data is advantageous in order to

come to the conclusion quickly. The data used in current resources are sufficient and

appropriate to support and answer the research questions. Secondary data provides

comparative and contextual data, which researcher can assess the generalizability of

representative data (ibid). It presents wide range of data compare to primary data,

which enables researches to enlarge the discussions and analysis (ibid). Another

advantage of using secondary data is that researches about CSR and employee

engagement up until now are easily accessible to conduct this research and provide

solid basis to fulfill the discussion. Lastly, compare to primary data, secondary data

allows research to evaluate it prior to use; however, it requires same sensitivity and

caution as primary data during the evaluation (ibid).

The primary data like surveys and interviews with employees in international

organizations would have provided valuable information about the research.

However, due to the time constraints and lack of good quality of network in

companies, it is not possible to collect reliable primary data. The objective of this

research is to understand and explain the relation of CSR and employee engagement.

Therefore, I would have needed to contact with employees of companies that follow

CSR strategies actively; however I do not have that kind of an access. Moreover, CSR

and employee engagement have become mainstream for organizations and there are

sufficient amount of surveys and questionnaires about employees’ response to CSR

activities as well as theoretical background. Therefore, I can reach to information

24

about how and why CSR is needed for engagement and why there are variety of

engagement levels with CSR.

3.3 Data Evaluation

3.3.1 Data Used

The secondary data used in this study have descriptive and explanatory purposes.

Since CSR and employee engagement includes variety of discussion points, I

searched through many sources to have a general view and narrow down the scope of

the research. The sources were collected from Royal Holloway Library search page

by using keywords and frameworks such as CSR, employee engagement, social

exchange theory and drivers of employee engagement. The same keywords were used

for google scholar search as well to reach different kinds of resources like government

resources, national statistics office of European Union, research and management

consulting companies’ website about employee engagement, human resource s

magazines and journal articles. The data gathered from these resources includes

international aspects that cover samples from different countries.

After going through relevant resources, I mainly narrowed down my research from

journal articles since the magazines, statistics and relevant websites were mostly

supplementary resources for my research area. I started to my research by searching

general perspectives about CSR and employee engagement relation. However, these

resources presented variety of perspectives that widened my research scope. There are

many theories and discussions about their relationship; therefore, I needed to choose

one of the important discussion points and narrow down my research scope. For

instance, many journal articles approach engagement and CSR relation from financial

perspectives or they focus on turnover, job satisfaction, commitment and work

engagement concepts. However, my research aim is to examine the exact effect of

CSR on employees in terms of their behavioral responses in a workday and try to

understand how CSR is influential for engagement that one can realize the difference

in workplace environment. OCB and social exchange theory are one of the prevalent

topics to achieve my research goals since OCB is the direct outcome of employees’

behavior that CSR impact can be distinguishable more easily compared to the other

psychological effects. Therefore, I decided to focus mainly on social exchange theory

and OCB in my research. Moreover, other resources such as consulting companies’

25

researches and business magazines give supportive facts about CSR and discretionary

behaviors of employees based on reciprocity norm. Thus, I was able to put together

my research goals and secondary data by gathering different kinds of relevant

information from various resources.

Since the secondary data were used, some irrelevant and incompetent parts of the data

were excluded. Employee engagement and CSR are the comprehensive topics that

they comprise variety of discussions, which are not exactly related with my research

aim. As Bryman and Bell (2011) define, variables in data should fit with the research

focus and it is an important challenge for a researcher. When I was searching through

literature, some articles gave insight about the direct relationship of CSR and

engagement through OCB and social exchange theory but they also involved the

effect on financial outcomes and employee commitment, loyalty and satisfaction.

Therefore, I focused on OCB and social exchange theory findings of journals and

excluded other variables by ensuring that relevant variables were not affected. I had

opportunity to revise and reanalyze the resources for several times and make

connections among different sources to support my arguments by adding and

removing information. By the deductive approach, I was able to draw conclusions and

answer research questions from the data examined.

3.3.2 Evaluating Secondary Data and Crit icism

The use of secondary data in this research makes it easier to assess its reliability

compared to primary data since the collected data have already been publicized.

However, the downside of using secondary data is that it may not be appropriate for

particular research purposes and may not be fulfill the research questions completely.

The precise evaluation of suitability of secondary data depends on validity and

reliability aspects (Saunders, Lewis and Thornhill, 2012). With this disadvantage in

mind, I went through selective research and data collection process in order to meet

reliability and validity aspects. I searched relevant articles through google scholar and

RHUL library mainly between the years of 2011 and 2015 by focusing on well-cited

ones, which are mostly experts in related topic and have many publications. I got the

main findings mostly from journal articles and supported them with institutional

researches of consulting companies and business magazine publications. The business

magazine publications give significant examples from practical life; for instance,

26

Forbes magazine and HBR contributed my research by examples of international

organizations. The data gathered in the research fulfill the reliability criteria since

they are published by research institutions or by national organizations. Moreover,

large amount of data were obtained from journal articles, which represent an authentic

source of material that authors are well known and are well cited for enlightening the

many similar research topics in their field.

The data also satisfy validity criteria, which assess the appropriateness of data and

research objective (Saunders et.al, 2012). As discussed before, secondary data can

have incompetent parts that do not fit in research objective. However, the research

institutions’ and national organizations’ resources are straightforward and are not

shaped for special purposes or hypotheses but they are mostly for information

purposes. For journal articles, I went through relevant research selectively and used

the suitable data for research objectives. Therefore, data used have little risk to lead

research to inaccurate conclusions.

4. Findings & Discussion

In this chapter, each research question will be discussed depending on findings from

data examined. The findings for each question were mainly obtained from journal

articles, business magazines and statics provided by private institutio ns. I analyzed

and interpreted the findings of these sources in the context of my research. The

resources are appropriate to construct my argument since they provide the sufficient

information about the main cases of this IRP. In each research question, firstly, I

described the data I used and then I explained the findings of each source. Thereafter,

I discussed my own findings that I concluded from the sources.

4.1 How does CSR affect the employee engagement?

The data examined for the relationship between CSR and employee engagement are

Sirota Survey (2007), journal articles of Caligiuri et.al (2013), Vinerean et.al (2013),

Farooq et.al (2013), Gross and Holland (2011), Esmaeelinezhad et.al (2015), Gond

et.al (2010), Saul (2012) and Forbes (2012).

According to the research of Forbes (2012), when companies pursue more

environment friendly strategies and put social efforts for their community, employee

27

engagement grows substantially. Employees’ morale increase, business processes

become more efficient and employee loyalty increases.

Saul (2012)’s research with PwC explains that employee turnover costs 40 billion

pound in a year for companies and employee engagement is an important concept to

minimize it through CSR. They suggest that CSR is influential for both inside and

outside stakeholders and creates win-win situation by providing decent corporate

image for customers and by ensuring that employees are proud of their organization.

Thus, they become more loyal to their organizations and decrease the turnover rates.

Sirota Survey data (2007) shows that 71% of employees in the organizations think

that CSR should be top priority among other business strategies. However, 47% of

employees believe that their organization do not use realize the potential of CSR

programs (ibid). It also points out why CSR can be effective on engagement.

According to the survey, 85% of employees feel pride and identify themselves with

their organizations, which result in higher employee engagement.

Farooq et.al (2014)’s research on impact of CSR points out how CSR is influential on

employee engagement through organizational identification and trust. They conducted

their research in large firms employing more than 500 individuals and their data are

based on three types of CSR as CSR to consumers, CSR to employees and CSR to

social and non-social stakeholders (Farooq et.al, 2014). The data show that different

CSR types are effective for enhancing organizational identification and trust, which

results in higher level of engagement (ibid). The responses of emp loyees about

internal CSR actions of organizations show that employees perceive their

organization as a benevolent and fair institution (ibid). Therefore, it improves

organizational trust and triggers the feeling of paying back to organization (ibid). The

employees’ responses to external CSR programs point out that employees feel pride

and prestigious in their community since their organization is well known and

respected by its socially responsible actions (ibid). Most of the employees answer the

research questions as “our success”, “we are socially responsible” that they adopt the

organization’s success as theirs (ibid).

Gond et.al’s (2010) research data bring forward similar results. According to their

research, CSR has mediated effect on organizational identification and trust.

Identification mainly originates from external image of organization and trust

develops when employees realize that their organization is socially responsible for its

28

internal and external environment (Gond et.al, 2010). Both perception of

organizational trust and identification imply the social exchange theory in the research

since employees’ responses are mainly based on exchanges (ibid). For instance, they

respond as “we like to work for our organization and contribute its CSR programs

since we have a fair workplace environment and we have decent image in our

community” (ibid). If the organizations fulfill its commitment to internal and external

CSR actions, employees value their organization and become more engaged with their

organization (ibid).

Esmaeelinezhad et.al (2015)’s findings about engagement and CSR relation point out

that ethical and philanthropical actions enhance the employee engagement. The

findings suggest that employees perceive that their organization is fair and

trustworthy due to their involvement in the socially responsible actions

(Esmaeelinezhad et.al, 2015). As identified from employees’ responses, they adopt

themselves with the organization and they become proud of their organization’s

commitment to CSR (ibid).

Saul (2012), Sirota Survey (2007) and Forbes (2012) provide more general

perspective about engagement and CSR relation whereas the others give more insight

about the relationship by putting forward the particular concepts. As examined, the

identified influence of CSR on engagement is the organizational identification and

trust, which CSR uses as mediatory elements to increase employee engagement. Trust

and organizational identification are the direct outcomes of CSR and explain why

CSR is effective on employee engagement. The supportive evidence is that when

employees perceive that the organization is sensitive about welfare of people in

general, they feel proud of their organization and express as a part of their identity. As

mentioned in research outputs, expressions of employees about the organization as

“we”,”our” give clear evidence about how employees consider their identity as a part

of their organization. On the side of organizational trust perspective, internal CSR

gives an indication that organization cares, respects and values their employees.

Therefore, it increases the level of trust since employees perceive that organization is

fair and benevolent. On the other hand, external CSR such as CSR to consumers and

to society have powerful impact on corporate reputation, which makes employees

think that their organization is benevolent to its community as well. They feel to

reciprocate in order to contribute the social solidarity. This also supports social

29

exchange theory that when strong organizational identification and trust is built,

employees feel to reciprocate, which leads to high level of engagement.

As examined, there are particular evidence that CSR investments have an impact

through corporate reputation, organizational trust and identification. Corporate

reputation forms the important part of CSR influence on organizational trust and

identification. Since CSR enhances the corporate reputation, employees perceive that

organization is well known for its inside and outside ethical actions; therefore, they

involve in higher level of engagement. Engaged employees feel satisfied for working

for a socially responsible company. They pride on their organizations, which make

them work with willingness and satisfaction and also decrease the ir intention to quit

their job.

The research findings suggest the indirect effect of CSR to employee engagement.

Reputation is the triggering factor that enhances trust and organizational

identification. Employees feel proud of working socially responsible company, which

leads to higher engagement with the organization.

4.2 How CSR contributes organizational citizenship behavior (OCB) of

employees in the organizations?

The data analyzed for OCB and social exchange theory are from journal articles of

Gond et.al’s (2010), Zhang et.al (2013), Jones (2010), Islam et.al (2015), Shen et.al

(2014), Glavas et.al (2014) and Simona et.al (2013).

Gond et.al (2010)’s research points out that employees involve in OCB due to the

feeling of repaying the favor through high levels of satisfaction (Gond et.al, 2010).

Zhang et.al (2013) expand their research on underlying reasons of the CSR and OCB

relationship. The research has 700 respondents with different age, gender and job

titles in a multinational Chinese company (Zhang et.al, 2013). Employees express

their involvement in OCB as “ I collaborate with my colleagues in case of any

difficulty and try to solve the problems” or “ I suggest innovative solutions beyond my

assignments” (ibid). Employees’ responses indicate that they become more satisfied

with their work and have positive attitude towards their environment when they

perceive the organization’s commitment to CSR (ibid). Thus, they are eager to display

high performance and involve in extra-role behaviors in order to return the favor of

the organization (ibid).

30

Jones (2010)’s research participants from publicly traded company, Green Mountain

Coffee Roasters, which requires its employees to spend their 2,5 of their yearly hours

in volunteerism programs like in Fortune 500 and other companies. The research also

provides an insight for having different levels of engagement based on social

exchange ideology since the data compares the employees’ perception of CSR

programs (Jones, 2010). The research findings show that employees, who value the

volunteerism programs, have tendency to display OCB towards their colleagues,

organization and in-role performance due to the satisfaction they gained during the

program (ibid). However, employees who undervalue these social programs do not

display the same level of OCB (ibid).

Islam et.al (2015)’ research findings explain the CSR influence on perception of

employees, which results in job satisfaction and ultimately boosts engagement. The

research includes 22 commercial banks in Pakistan with different age, gender. The

research outputs demonstrate two variables that affect engagement, which are job

satisfaction and perceived organizational support. When employees realize that their

organization values CSR activities, they feel more satisfied with their work; therefore,

they reciprocate by displaying OCB towards their organization and co-workers as

they state in their responses (Islam et.al, 2015).

Shen et.al (2014) conduct the similar research about CSR and OCB in 35

manufacturing companies in China with different education background, age, gender

and positions. Perceived organizational support and job satisfaction are the main

outcomes of the research (Shen et.al, 2014). The perceptions of employees are

acquired from their responses as “ My organization involves in CSR”,” My

organization values the well-being of employees” (ibid). The findings suggest that

perceived organizational support has significant impact on job satisfaction since the

feeling of working for a socially responsible company creates extra motivation for

employees (ibid). Therefore, it results in high- level performance and extra-role

behaviors (ibid).

Glavas et.al (2014) also search for underlying reasons of OCB and CSR relationship

with 827 employees in North America and their research points out the similar

concepts. The findings show that CSR is influential on job satisfaction through

perceived organizational support (Glavas et.al, 2014). When employees realize that

organization values CSR activities, they perceive their organization is benevolent and

they try to retaliate positively through increased job satisfaction (ibid). Therefore, the

31

Social

Exchange

perceived support and job satisfaction trigger employees to involve in OCB in order

to take part in their organization’s commitment towards social solidarity (ibid).

Simona et.al (2013) ‘s research covers in top ten companies in Linkedin. The relation

between CSR and OCB is mediated by job satisfaction (Simona et.al, 2013). The

findings exhibit the significant effect of CSR on job satisfaction that employees

display OCB in their day-to-day activities (ibid). Employees’ responses show that

satisfaction creates motivation for employees to involve in extra-role behaviors and

innovative solutions for the company (ibid).

As examined from sources, there are evidence support that CSR has indirect effect on

OCB through job satisfaction and perceived organizational support. When employees

realize the organization’s involvement in CSR, they become fulfilled with their job

due to the organization’s contribution to its stakeholders and become ready to perform

extra behaviors. They involve in an exchange relationship that they choose to go out

of way only if they perceive that the organization treats them in a same manner. The

findings suggest that CSR has a positive relationship with perceived organizational

support and job satisfaction, which is positively related with work performance and

extra-role behavior. Therefore, interaction between the concepts starts with the

perceived organizational support that leads to job satisfaction and results in OCB-O.

Figure 4.2.1

CSR

Perceived Organizational

Support

Job Satisfaction

High Performance Extra-Role Behavior

OCB

32

4.3 How can organizations engage “less engaged employees” through CSR?

The data analyzed for this research question are Du, et.al (2010), Traiq (2015), Gond

et.al (2010), Farooq et.al (2013), Slack et.al (2014), Rodrigo et.al (2007), Mirvis

(2012), Ferreira et.al (2012) and Forbes (2012).

As mentioned in previous research question, there can be different engagement levels

among employees due to the exchange ideology. However the resources point out that

employee engagement can be improved by particular courses of action through CSR.

Du, et.al (2010), Traiq (2015), Gond et.al (2010) find out the importance of CSR

awareness by being in communication and interaction with employees through blogs,

company sources or outdoor facilities. According to their research, when employees

are informed and shared about how their organization is committed to CSR,

employees acquire information about the organization’s actions. Therefore, they are

able to understand why and how their organization involve in CSR strategies, which

make them forge closer ties with the organization.

Farooq et.al (2013), Slack et.al (2014), Rodrigo et.al (2007) and Mirvis (2012) point

out that CSR should be placed in organizational culture rather than as an add-on.

Their research findings suggest the increased level of engagement can be generated

when employees experience CSR actions in their day-to-day activities and the CSR

notion is implemented into every hierarchical level and process.

Rodrigo et.al (2007), Mirvis (2012), Ferreira et.al (2012) and Forbes (2012) suggest

another important course of action from their research. When employees are involved

in CSR programs rather than following tasks that their manager assign, they can gain

insight and understanding of the task they have and be more willing and innovative

for CSR programs in the organization. Their findings demonstrate that as employees

participate in the CSR programs, they feel pride and enjoy the feeling of building or

helping something beneficial. Therefore, it enhances the engagement levels of

employees.

I will discuss the identified ways of engaging employees respectively by depending

on my research findings.

33

Lack of Awareness about CSR

One of the identified significant courses of action for engaging employees is that

organizations need to increase employees’ proximity to CSR. Communication is the

important mediator for organizations and their employees. Lack of communication

about CSR strategies and shared organizational values towards CSR cannot contribute

the employee engagement. As the researches suggest, organizations need to establish

clear, straightforward and coherent communication platforms for employees to follow

the organization’s position to CSR. These platforms should explain explicitly the

rationale behind the CSR activities, resources allocated to these sources and their

successes. Therefore, employees can gain understanding about CSR goals and feel

like they are part of it. Many organizations are good at sharing their CSR actions to

public and attract many consumers so that same strategy can be applied for internal

audience. The online platforms in organizations such as blogs, online company

communities can increase the communication and awareness of employees about

CSR.

Lack of Involvement

The decent communication solely is not sufficient to engage employees through CSR

since employees need to participate CSR activities and organizations should present

real opportunities for their involvement. Participation to CSR activities can be added

as an integral part of professional responsibilities and employee performance on these

activities can be measured. Managers can give constructive feedbacks about their

performance in CSR activities in a way that encourage employees to contribute

continuously. The involvement in CSR programs increases job satisfaction,

productivity since employees feel pride and have strong morale due to the

organization’s attitude to CSR.

Employees need to involve in creation, development and implementation process of

CSR programs rather than applying the decisions of managers or shareholders.

Employees should be active participants and co-produce CSR programs, which

enables close connection with organizations and employers. Therefore, organizations

need to implement CSR activities as an internal marketing strategy for their

employees and be open to two-way communication by interchanging ideas. By doing

34

so, organizations can enhance the organizational identification of employees and

engagement level in their workforce.

Organizational Culture In order to engage employees through CSR, organizational values and personal values

about CSR should be able to meet in common platform. CSR practices should be

embedded in hearts and minds of employees during the day-to-day activities rather

than seen as an add-on or obligation. The share of knowledge, personal values and

organizational values are significant to spread the CSR message throughout the

organization. Organizations need to express clearly the importance and benefit of

CSR to organization and make CSR programs official through some policies.

Effective communication, awareness and involvement of employees into CSR

activities help to root CSR into organizational culture. It is important for

organizations to alter the perceptions of employees from “ simply place to work” to

“place to exchange social views”; therefore they can be able to identify themselves

more strongly with the organization.

5. Conclusion

This paper aims to contribute the research area of employee engagement and CSR

relationship. Unlike previous researches, in this paper, I investigated social exchange

theory in order to clarify the engagement through CSR. I examined CSR influence on

OCB and its outcomes as a part of engagement. In addition to this, I searched the

reasons of different engagement levels among employees and possible courses of

action through CSR to attract the less engaged employees.

The research findings demonstrate that CSR has influence on employee engagement

by organizational identification and trust. It can be inferred that CSR has indirect

effect on engagement since it triggers the mediatory concepts, which build a bridge

between CSR and employee engagement. On the other hand, the concepts that

enhance OCB through CSR are the perceived organizational support, reputation and

job satisfaction. As a theoretical ground, social exchange theory constitutes the OCB

of employees depending on reciprocity norm. Employees involve in OCB with the

feeling of paying back their organization and CSR is one of the drivers for employers

to feel obliged towards their organizations.

35

However, not every employee responds CSR programs in a same manner due to the

lack of awareness, lack of involvement into CSR activities and having CSR as an add-

on activity rather than as a culture. It is significant for organizations to communicate

with their employees in a clear and precise way. Organizations need to involve

employees into CSR programs and make them participate besides their professional

responsibilities since employees need to experience in order to realize their

organization’s commitment to CSR. Organizational culture also plays an important

role for effectiveness of CSR. When CSR is embedded into organizational culture,

employees realize that organization’s commitment to CSR is beyond the official

requirements and organization is more than just a place to work but share values.

One can draw a conclusion that CSR contributes the employee engagement, which

leads to achieve business outcomes through a willing workforce. Therefore, the

relationship between CSR and employee engagement needs to be valued by all levels

of organizations.

6. Limitations & Further Research Areas

The scope of this research paper does not cover all areas of employee engagement and

CSR relationship, for this reason the research is subject to particular limitations.

Firstly, the research approaches from general perspective to CSR and employee

engagement relationship; however, the relationship can be affected by culture,

organization’s sector, size and demographic differences of employees. Secondly, I

have chosen to focus on solely the benefits of CSR on employee engagement but

there can be cases, which CSR may be costly, inefficient and may not be needed as a

tool for engagement. This does not mean that CSR is the best remedy or solution for

engagement but contribution of CSR to engagement has been most relevant for this

research. For further research purposes, it can be useful to consider different variables

to gauge their effect on CSR – employee engagement relationship such as

demographic differences of employees, hierarchical levels and line of business such

as service or production based organizations.

36

7. References 1. Abdullah, M. H., & Rashid, N. R. N. A. (2012). The Implementation of

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