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HOW ORGANIZATIONS CAN USE CSR TO ATTRACT, MOTIVATE AND RETAIN

HUMAN RESOURCES

ID Number

Unit Code

Martin Maina
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Abstract

Corporate Social Responsibility (CSR) is a critical element in organizations today. While in the

past was seen as only important to a firm’s image, in the current business world CSR links

closely to human resources. CSR plays an important role in human resource management. More

studies are focusing on the relationship between CSR and human resource. The study seeks to

identify ways in which CSR can be a useful tool in attracting, motivating and retaining

employees. Using secondary data, the study uses three case studies which answer the question on

the role of CSR in attracting employees and employee retention as well as the role of CSR in

employee engagement. The findings indicate that CSR determines organisational attractiveness.

CSR affects employee engagement which in turn influences employee retention. Managerial

support, employee career development and self-expression as well as recognition are CSR

channels through which employers can attract and retain employees.

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Introduction

Statement of the problem

Corporate Social Responsibility (CSR), as a concept, alludes to the idea that there is a

need for corporations to be responsible in all their dealings in the business processes (Glade,

2008). Firms have a responsibility to act in a manner that affects both the firm and other

stakeholders positively. Further, CSR is a representation of a continuous commitment by an

organization towards upholding business ethics to affect economic development. CSR also

promotes social responsibility by enhancing the quality of life for employees and entire societies.

As an outcome, in the present-day complex business environments, CSR has evolved to a

vital constituent of the organizations’ survival. When a business exhibits a culture of the

excellent corporate citizenry, it, in turn, acquires an exemplary identity, values and visions

(Weber & Wasieleski, 2018). It is worth noting that in the case a firm understands its employee

perspectives on CSR, it can then apply the point of views with a level of efficacy. The

application should yield a positive influence on the working environment’s behaviour, attitudes

and performance.

CSR is a critical concept among corporations, but it is less comprehended in organizational

circles in the context of its effect on human resources. Employee commitment is significant to

the notable achievements which the concerned organization earns in various programs, at present

and in future (Glade, 2008). Nevertheless, further studies by Bhattacharya, Sen and Korschum

(2008) suggest that four limitations that associate with CSR in realizing its ability to motivate,

attract, and retain human resources. The authors argue that despite profits emanating from CSR,

1. Staff still lacks the participation and awareness in CSR.

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2. Corporations have insufficient discernment of employee needs fulfilled through CSR

application.

3. Firms have a substandard understanding of the employee returns from CSR; and

4. The top-down perspective of CSR.

From the stated shortcomings, few employers have a comprehensive understanding of CSR

and its significance to the employed. When organizations aim the CSRs to employees, there are

high chances that employees' motivation and retention accelerates. Regardless, vast propositions

indicate the effects of CRS practices on staff productivity but limited empirical exploration

documents the development, in particular, the application of CSR principles in organizational

practice.

Purpose of the study

As the problem statement claims, the purpose of current research is to develop a

considerable comprehension of firms’ application of CSR to motivate, attract and retain human

resources.

The researcher designs the following research questions (RQ) to achieve the purpose of the

study.

RQ1: What is the role of CSR in attracting prospective employees?

RQ2: What is the role of CSR in motivating and retaining employees?

RQ3: How can organizations use CSR to facilitate employee engagement?

Aims and Objectives

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Aims of the analysis include;

1. Assessing the role of CSR in the firm’s perception by employees in the firm already and

prospective employees.

2. Evaluate how firms can apply CSR in attracting, motivating and retaining human

resource.

Objectives of the study include:

1. To issue an extensive review of existing literature and identifying how organizations

apply CSR in facilitating engagement of staff.

2. To identify present corporations’ practices and pointing out how they profit from

involving employees from applying CSR principles.

3. To investigate underlying constituents that help in CSR application in the business

environment and how it impacts the employees.

4. To offer a conceptual framework outline that accounts for how CSR motivates,

attracts and retains human resources.

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Literature Review

Definition of CSR

Corporate social responsibility refers to activities in a firm aimed at both protecting and

improving the society’s welfare while catering to the organization’s interests (Davis and

Blomstorm, 1975). Initially CSR was a private non-financial reporting which touched on a

commitments leading to sustainable development (Malecki, 2018). However, this information

was only known to the involved parties. To a great extent CSR affected the perception of

financial, business, labour and environmental laws. From a being a matter of commitments only

known to a small group of people, today CSR is an integral part of every business globally.

However, despite the acknowledgement of its importance, CSR means different things to

different companies in various regions globally. For example CSR in a company located in the

Middle East where Islam religion affects business operations is different in certain ways from

CSR expression by a firm in the UK. However, despite the notable differences in definition and

understanding, the general concept of CSR is consistent universally (Aminudin, 2013). The

impact of CSR on the external environment has been an area of research that has received a lot of

focus over the years. Despite the emphasis on external impact of CSR, it also has a significant

impact on the internal environment of a firm.

Critical Areas in CRS

Studies by Matten and Moon has had a remarkable effect on codifying CSR, as research

points out that CSR comprises of various distinct parts: legal, philanthropic, ethical and

economic (2008). The legal aspect affiliate to the community's expectations of organizations in
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making gains while still keeping up with the law. Philanthropic or voluntary responsibility

concerns the non-compulsory expectations of a firm within the society. It involves corporations

taking up voluntary tasks, but the choice depends on the organizational discernment upon which

task to perform. Regardless of the choice a firm settle for, the society still expects that it is

consistent and of accelerating strategy.

Ethical duties imply those behaviour and ethical customs other than what the law expects

and which the society presumes the form to adhere. The ethical constituent of CSR comprises of

the duty to do what is right, being fair and steering clear from executing wrong. Economic

responsibilities under CSR involve return on investment to corporation's holders and partners.

Withal, the function concerns establishing job opportunities and guaranteeing reasonable pay for

employees and encouraging innovation.

Further studies suggest a three-dimensional archetypal concerning the social concerns

that firms require to discuss and convictions relating to Responsiveness. The issues under social

concept include the environment, occupational safety, product safety, discrimination and

stakeholders. However, it is worth noting that social concerns could adjust over time. Further, the

organization must identify the Responsiveness plan of action and distinguish betwixt defensive,

proactive, defensive or reactive traits. Both perspectives share vast similarities as each centres

around stakeholder's welfare.

Moreover, research indicates that CSR can fall under two aspects; internal and external.

Internal proportion consists of CSR operations inside the organization, and essential components

include staff, affiliating human capital management and investment, safety and health. In equal

measure, subjective aspect comprises of natural resources, environmental effect and economic
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production. Also, the external concept of CSR mirrors concerns of associates’ links to the society

and environment on matters such as human rights, organizational governance and environmental

issues.

There is a correlation between CSR and partners associating to an organization including

employees, consumers and society, competitors, owners, lobbying groups, suppliers and the

general public. The social component of CSR links to the description of particular groups or

people who are critical to an organization, therefore managers should incorporate them in CSR

programs. CSR forms the foundation for organizational partner's management as it designs a

competitive advantage through meeting the societal ad stakeholder needs. The perspective is

practicable for analyzing corporate achievements with interest in given stakeholders while

refining the duties, responsibilities, and the individual CSR intends to address.

It is worth noting that differences in culture and values impact partners’ presumption of

CSR in diverse ways. An interdependent relationship exists between the necessity of operating

within in web of partners who can change firm's direction in a direct or indirect means and the

stakeholders. The management in the context of CSR expects that managers have a sensible

structure of partners and pointing out the discernible stakes.

Also, the managers should design the corporation processes to consider and line up the

company's and partners' goals and beliefs. Further, the managers should debate for transactions

with partners while also thinking of balancing conflicting interests and designing dissatisfaction.

Studies suggest that it is hard to evaluate the standard CSR contemplations which the

stakeholders hold. The considerations include specific duties and concerns that CSR functions

should respond to and expectations the partners hold.

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CSR and employees

Employees are the most substantial stakeholders of the firm; therefore, firms should set aside

more resources, in particular those affiliating to CSR and have considerable profits for present

and future staff. Another study by Slack, Corlett and Morris (2015) indicates that staff members

are a critical constituent of stakeholders in CSR, as they involve the management in validating

policies and related social functions of the corporation.

Employees who take part in CSR acknowledge the financial and social gains of the

responsibility's practices. Bhattacharya, Sen and Korschum (2008) imply that activities under

CSR consist of licit and compelling ways of attracting and keeping excellent staff. The efforts

assist organizations that embrace CSR to entice and prevent employees from the multiple

benefits that the CSR functions guarantee, ranging from financial to social.

Managers, who represent a company’s administration, have a notable role to play in

influencing how an organization attains its goals. Withal, managers should ensure the firm

sustains the employees’ welfare and hearten staff engagement. Lynn (2015) states that staff

involvement in CSR and associating practices have a working environment behaviour that

borrows much from the practices. Further studies by Bhattacharya, Sen and Korschum (2008)

concede that managers should apply principles of CSR to products related to particular job

positions blended to fit each of the staff's needs. Regardless, not many managers have a standard

comprehension on recognition and understanding of necessities of diverse positions of staff

within the organization Bhattacharya, Sen and Korschum (2008). Also, most managers lack a
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clear apprehension of how to structure activities associating to CSR in addressing the particular

needs of different employee positions.

Studies of equal significance state that when employers look for motivated employees,

they should engage the staff in the company’s sustainability efforts. It is agreeable that CSR goes

beyond firms taking up humanity and voluntary activities in the community. Research indicates

that there is a positive correlation between CSR and employee motivation, attraction and

retention. In contemporary societies, a vast number of individuals seeking employment and

employees presume that the firm they target should be supportive of groups or persons who are

needy in the communities with which the business operates. A considerable percentage of

organizational partners, millennials in particular, also perceive companies as an agent of

exemplary social impression.

When a firm establishes new or enhances existing CSR programs, the administrators

should involve all leaders in the organization. Current HR practices, relating to CSR, concerns a

diverse working environment, compensation and benefits and CSR sustainable programs are high

levelled. The involvement of all organizational leaders in enhancing CRS programs should take a

top-down structure. CEOs should ensure reliable communication throughout the organization to

transfer their ideas across the organization. When existing employees note that they are part of

CSR programs, they get motivated and inspired as their leaders are role models.

Moreover, studies by Bode, Singh and Rogan (2015) emphasize that the benefits of CSR

to employees is psychological and the employee engagement in CSR related activities can

implicate intermediate results such as staff engagement. Beyond the engagement affecting levels

of motivation, attraction and retention, employees can identify better with the firm due to the
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participation. The positive psychological impressions occur by the employees having an

improved perception of the organization. Improved staff perception of the organization, in turn,

results in an increased desire for the employees to provide better working results (Bode, Singh &

Rogan, 2015). Prospective employees have an increased inclination of working in the

organization while existing staff wish to work in the organization for longer.

The authors further point out that there is a difference between the outcome of employees

working in a commercial project and CSR initiative. CSR projects are more profitable to

employees compared to beneficial functions as commercial projects have the sole goal of

generating gains to benefit the firm. On the other hand, CSR initiatives aimed at helping the

society within which the business operates. Further, CSR projects offer a better opportunity for

employees to develop their talents, a prospect that commercial projects limit.

Therefore, top talent employees feel that companies embracing CSR give them a better

chance to utilize their skills and abilities. As a consequence, cooperation's that embrace CSR

remains at a higher advantage in enhancing motivation, retention and attraction of staff, than

organizations lacking the programs. CSR activities link to better employee engagement by

creating a positive ‘treatment effect’ for the employees once they participate (Bode, Singh &

Rogan, 2015). The authors imply that employees in large corporations always look out for the

essence of their hard work to the society. As a result, corporations that uphold CSR offer the

staff a chance to design a social impact while using the firm as the foundation.

In the end, employees have a sense of identity with the organization as they realize that

the firm recognizes their existence, by allowing them to reach out in the community. Withal, the

participation in CSR activities improves the staffs' sense of self-affirmation and the
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consciousness that the team are operating as per the cardinal concepts of ethics and justice

(Bode, Singh & Rogan, 2015). Studies reveal that an enhanced identification with the

corporation, in turn, is motivated. The organization also has high rates of attraction of potential

employees, while staff retention rates are high.

Ibrahim (2017) further argues that CSR activities create vast forms of competitive

advantages for the corporation. The author further states that organizations which in keep with

technological advantages and have reliable sources of income take human resources for an asset.

However, it is challenging for a considerable number of organizations to acquire adequate human

resources. A substantial percentage of employees who have reliable human resources suffer the

challenge of demotivated staff and low retention rates. Companies that take time to select the

best strategies for having practical human resources stand a competitive advantage of motivating,

attracting and retaining their staff.

In gaining the employees' advantage in the job market, judicious organizations apply

CSR principles in their operations. CSR principles, as studies observe, enhance a corporation's

reputation as an outstanding employee in the job market and as an employer (Ibrahim, 2017).

CSR also enhances job satisfaction and improved commitment of the staff to corporations.

Research points out that job seekers, millennials in particular, often find motivation and

excitement about seeking jobs incorporations which they note have specific benefits tied to

working with the firm. A company's attractiveness, through potential employee's perspectives,

could range from the firm's social values, application value, financial value, development and

interest values, all which make up CSR.

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Interest value affiliates to the level of motivation that employees acquire from working in

the cooperation. Withal, the value involves assessing an employer who applies staff innovation

and talents in producing optimal high-quality products (Ibrahim, 2017). Withal, social benefits

implicate a person's attraction to a corporation that issues an inviting working environment, a

team spirit and excellent relationships in the workplace. The value job seekers attach to the firm's

economy are the aspects which attract the potential employee through issuing staff with

outstanding packages in the form of rewards (Ibrahim, 2017). Such packages consist of job

security, chances for promotion and compensation and job-related benefits.

Moreover, development value concerns the attraction of a job seeker to a potential

employer indicating a conceding environment. In equal measure, the employer should offer

opportunities for career advancement and programs which promote workplace experience.

Application value of an organization links to the attractiveness of a corporation and their ability

to provide staff with a chance to apply practical knowledge and skills. Therefore, the corporation

under the job seekers' radar ought to promote an environment of knowledge transfer, regarding

philanthropic and customer centeredness (Ibrahim, 2017). Also, organizational CRS initiatives

incorporate altruistic value and concerns giving back to the community.

Most job seekers also perceive income the employer offers their employees as a

determinant factor of brand attractiveness. Further, a strong correlation exists between an

employee's motivation and retention and the type of income they receive. Persons with

inclination to receiving economic CSR often perceive their job as more appealing. In cases

where high-level payment goes beyond the firm's ethical values, then the perception of an

attractive job stands (Ibrahim, 2017). Application values of an organization differ from social
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orientation as the latter hold CSR as a critical moral fit environment of the firm that results in an

appealing employer.

CSR and Employee engagement

Gallup (2013) argues that only 13% of employees in the world are fully engaged. The

implications of such findings suggest that there is lower productivity. Lower productivity in turn

leads to lost revenue. The numbers of employee engagement are an issue of concern because

despite people spending more time at work, they are not being productive. To counter this

phenomenon, many employers are looking for ways to engage employees more while at the

workplace. CSR is one of the mechanisms that human resource managers use to increase

employee engagement. Some of the ways in which companies sort to increase employee

engagement through CSR initiatives including CSR initiatives. The results have been positive for

both the firm and society. However, Glavas (2016) claims that there exists a gap in information

on the mechanism through which CSR influence employee engagement. As a result experts in

the subject coined the engagement theory. The theory suggests that if a person is able to use

more of themselves at the workplace then they are more likely to be engaged. For an individual

to achieve this, perceived organizational support and ability to remain authentic play a major role

(Glavas, 2016).

These factors indicate that managers need to be strategic in their choice of CSR activities.

The choice of CSR activities has to reflect organizational support while at the same time creating

an environment in which employees can maintain and express their individualism. Every human

being has an individual social identity that they yearn to retain even in communal settings. The

advantage of this is that firms can benefit from talented employees’ skills. At the same time
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employees can use these skills to advance their career goals which would affect employee

retention.

CSR and organizational attractiveness

In the human resource world today attracting talented and the right fit of individuals

offers a competitive advantage to a firm. Attracting talented individuals however entails various

elements. Signalling theory holds a prominent position in the human resource recruitment

process (Connelly, Certo et al., 2010). CSR forms an integral part in propelling the signalling

theory in the recruitment process. While searching for employment, job seekers prefer

corporations that are famous for their CSR (Jones, Willness and Madey, 2010). Although there is

literature on this preference among job seekers, there is a gap in the research on what factors

influence this notion. While evaluating CSR practices that make an organization more attractive,

both internal and external CSR practices affect the firm’s image (Story, Castanheira and Hartig,

2016). The younger generation is looking for a workplace which satisfies more than financial

needs.

Several publications report that the younger people in the workplace want to work in a

firm that enables them to make an impact. Perhaps due to the emphasis in media on

environmental issues many young people also find corporations that gears efforts towards

environmental CSR attractive. In line with the signalling theory, today companies can easily

send information to outside parties on the firm’s activities through avenues such as social media

and websites. Disclosure of CSR activities to the public informs prospective employees of the

CSR activities in a firm both internally and externally. The communication of CSR practices is
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now more crucial than it has ever been seeing as human resource talents factors in these elements

while scouting or an employer.

Methodology

The study uses three case studies to investigate the relationship between CSR and the

attraction, motivation and retention of human resource talents. Case studies are suitable in

qualitative research because they facilitate exploration of a certain occurrence within a given

context (Baxter and Jack, 2008). Yin (2003) also argues that case studies are favourable because

they used past data which offers a better picture of cause-effect when answering questions like

how and why in research. In particular case studies are appropriate when dealing with research

that asks the question ‘how’. To understand the relationship between CSR and the attraction and

subsequent retention of employees, the study uses one case study which explores how a firm’s

CSR perception to potential employees influences job application. The study also uses a second

case study to investigate the role of CSR in retaining employees. The third case study links

employee engagement to employee retention.

Research conceptual framework

Management Practices Employee Employee retention

Managerial support engagement
Employee career development
Employee expression
Rewards and recognition

Prospective employee
attraction
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Case Study 1

The study conducted on 600 final year undergraduate students from a Business School in

Ghana aimed at determining whether CSR influences an organization’s attractiveness while

applying for jobs. In the study Simpson and Aprim (2008) also sought to investigate the

understanding of CSR among potential employees. In the study, the researchers used

questionnaires to administer relevant questions to the sample. Among the initial 600 final year

undergraduates in the survey, only 500 returned the questionnaires. Final year undergraduates

from the University of Ghana Business School was determined by the past contribution of

employees to the market. The school produces a considerable number of prospective employees

to the job market in Ghana. The sample demographic is suitable for this study because it is

representative of the majority of unemployed people seeking employment in various

organizations. The sample however limits the scope of research because it does not account for

people who are already in employment but are seeking to switch employers.

For the study to evaluate the role of CSR in choosing a potential employer the

questionnaire used in the survey focused on four areas. The first was demographic information

after which the questions focused on the participants’ understanding of CSR. To evaluate the

respondents’ awareness of CSR the questionnaire had the following questions as indicated in the

table below.

Table 1

Level of CSR awareness

Yes, I have heard of it and I fairly understand it.

Yes, I have heard of it and I understand it a bit.

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No, I have never heard of it.

Yes, I have heard of it but I do not understand it.

The other portion of the questionnaire sought to understand factors respondents deemed

attractive in an organization. The respondents were asked to rank each attribute from 1 to 7 with

1 meaning it was irrelevant and 7 very relevant. The attributes indicated in the questionnaire are

indicated the table below.

Table 2

Factors affecting organisational attractiveness

Common sense of direction

Shared values

Similar ethical standards

Friendliness of the recruiter

Wages and salary

Managerial quality and relationships

Long term career prospects

Level of responsibility at the workplace

Authority at the workplace

Involvement in decision making

Marketability

Job security

Level of CSR disclosures and policies

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Case Study 2

The second case study selected for this study is from a sample population working in IT

firms in Malaysia. The study conducted sought to investigate the correlation between employee

engagement and employee retention. Alias, Noor and Hassan (2014) evaluated management

practices which influenced employee engagement and in turn affected employee retention. The

management practices included managerial support, employee career development and

recognition. These practices determined how engaged employees were at the work place and

ultimately affected the retention levels. The study utilised a sample from 3 IT firms in Selangor

and 840 employees among them executives and above level employees in different departments

in the IT companies. This study uses this data because they offer a representation that is different

from the first case study in that they have work experience. The sample in this case study also

ranks highly in the organization hierarchy.

Case Study 3

The third case study that the research uses comes from a population of workers in China.

The study in question uses the data to investigate the impact of CSR on employee engagement.

Jia, Yan, Liu and Huang (2019) use the data to determine how internal and external CSR affect

employee’s work engagement. In the study the researchers use a sample of 250 employees to

identify elements of CSR that affect employee engagement. The study was conducted in two

phases. The first phase involved measuring the perceived CSR, individual value and collective

values. The second phase asked questions on individual work engagement, perceived

organizational support and organizational pride. For both phases age, marital status, firm size,

industry type and gender were controlled. From an initial number of 1000 participants selected
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for the study only 250 questionnaires were deemed valid for the study. This case study is

relevant to this research because it provides a link between CSR and employee engagement. The

case study helps identify ways in which organizations can utilize CSR to facilitate employee

engagement, which answers RQ3.

Discussion and Conclusion

The first case study involving final year undergraduates from the University of Ghana

Business School findings indicated that 52% which was a majority of the sample had heard and

understood what CSR is. Further, the majority of the students understood that CSR relates to

commitment to the public and society at large. An important thing to note was that among the

CSR aspects presented in the questionnaires, making profits ranked lowest among the sample’s

definition of CSR. When asked about organizational attractiveness and CSR, the participants

ranked good wages highest amongst the factors. Job security, career prospects and the quality of

management followed in that order. The results from the study are consistent with existing

literature and findings from similar studies on the needs of employees. In particular, the findings

are similar to that of the third case study involving IT employees from firms in Malaysia on

some of the managerial practices that influence employee engagement and retention.

The first case study on the role of CSR practices on organizational image to prospective

employees, the questionnaires also enquired whether the disclosure of CSR activities in various

aspects affects organisational attractiveness. From the sample, the study found that disclosure of

CSR activities affected external perception of the firm. In particular CSR activities related to the

environment and the society ranked higher in influencing the perception of the firm. Prospective

employees think a firm is more attractive as a place of work of the firm has substantial efforts in
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CSR towards the environment and society. The attributes in the survey questions indicate the

impact of the Signalling theory when communicating CSR activities to the world outside of the

internal environment. These findings add to the existing knowledge on the importance of

strategic communication to the public in order for a company to attract the right talent.

The implications of these findings relates to individual and collective identity of

employees. As stated in the literature review, employees find greater comfort in workplaces that

identify with individual values than places that do not. For instance if an individual believes in

the conversation of animals and they work in a fashion firm which makes coats made of fur, a

CSR decision to use faux fur instead of actual fur from animals could have positive impact of

employee retention. In the case of a prospective employee, this action could set the company

apart from competing firms.

A key thing to note from the findings in the first case study is that the most significant

element in determining attractiveness is employee benefits. Despite concern for environmental,

and social responsibility, potential employees are mainly concerned with employee benefits. To

attract employees human resource managers have to focus on the firm’s responsibility to the

employees. This finding is in line with the CSR stakeholder theory which argues that the

employee is the most important shareholder in a firm. Wages, job security and career

development rank highly in assessing an organization’s attractiveness.

From the second case study talent management practices are indicator of employee

retention. A firm chooses talent management practices which affect employee engagement.

Employee engagement is a key a factor in employee choices to remain with a firm. Employee
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engagement affects the relationship between employee retention and managerial support, career

development and recognition.

From the third case study the findings indicate that employees’ perception of external and

internal CSR, collectivism and indivualism all affect employee engagement. When employees

approve of external CSR which leads to organizational pride there’s a sense of collectivism

which emanates and it leads to higher employee engagement. On the other hand, when

employees approve of the internal CSR it means that employees as individuals feel that they get

organization support. This also influences employment engagement.

Limitations

The study has several limitations which include the following

1. In the first case study, the sample population is students from a developing nation. The

population presents a limitation because the concept of CSR is developed in varying

extents in different places. In countries such as the UK, the United and States and other

European nations, the society and resources have higher standards of CSR. The impact is

that prospective employees have higher expectations from potential employers and have a

wider range of choices. The study also assumes that the sample population has a variety

of choices of jobs to pick from while conducting the survey.

2. The third and case studies of the Chinese and Malaysian employees use convenience

samples instead of random sampling. The implication then is that although the sample

provides useful information bias may occur.

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3. Since the study relies on secondary data it is subject to method and variable bias used in

the studies that have been used as case studies in this research. Further, some of the

variables used in the studies do not contribute to the narrow focus of the research.
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