Corporate Social Responsibility: Connecting to Employees and Creating Sustainable Business Anne E. Herman, Ph.D. Kenexa Research Institute October 2008

Agenda Kenexa Research Institute (KRI) and WorkTrends™ Why Employees Join Organizations Corporate Social Responsibility (CSR/CR) CSR Culture CSR Culture and Employee Opinions Connecting With Employees Conclusions and Thoughts Questions and Reflections

Kenexa Research Institute (KRI) Collaborate with clients to examine special topics of interest Initiate and oversee special human resources research projects Generate intellectual capital, codify thought leadership and disseminate through research reports, publications and press releases Serve as a catalyst in product development efforts

WorkTrends ™ On-going study of employee opinions U.S. trends from mid-1980s Broad range of topics Scientific, academic stamp of approval WorkTrends 2008 features results from workers in Australia, Brazil, Canada, China, Germany, India, Italy, Japan, Mexico, The Netherlands, Kingdom of Saudi Arabia, Russia*, the United Kingdom and the United States *500 respondents

Why Employees Join Organizations Other Reasons Senior Leaders Commuting & Travel Organizational Values & Reputation Bosses Compensation & Benefits Development & Growth Opportunities Job Characteristics

Corporate (Social) Responsibility (CR/CSR) Defined – “CSR empirically consists of clearly articulated and communicated policies and practices of corporations that reflect business responsibility for some of the wider societal good” Components Potential Benefits – Organization – Communities – Stakeholders

Poll Question 1 Does your organization have a formalized Corporate (Social) Responsibility (CSR/CR) function? –YES –NO –DON’T KNOW

Poll Question 2 Have you participated in any CSR/CR efforts within your organization? –YES –NO –DON’T KNOW

Corporate Social Responsibility Measurement – My company does a good job of contributing to the communities in which we live and work – My company's commitment to social responsibility (e.g. community support, protecting the environment, etc.) is genuine – My organization makes business choices that support the environment, such as recycling, energy conservation and vendor selection – My company's corporate social responsibility efforts have increased my overall satisfaction with working here

CSR Item Responses Note: values represent percent favorable

CSR Culture 39 percent of respondents indicated that they worked in a strong CSR culture 25 percent of respondents indicated that they worked in a weak CSR culture 36 percent of respondents indicated that their organizations were not classifiable CSR Culture

Relationship of Country and CSR Culture Note: values represent percentage of respondents indicating they work in a Strong CSR Culture United States Canada United Kingdom Australia Germany China Brazil India Mexico Brazil Saudi Arabia Italy The Netherlands Japan Russia

Relationship of CSR and Perceptions of Leadership Favorability Note: values represent percent favorable

The Global Drivers of Engagement 1.Confidence in organization’s future 2.Promising future for one’s self 3.Company supports work/life balance 4.Safety is a priority 5.Excited about one’s work 6.Confidence in company’s senior leaders 7.Satisfied with recognition 8.CSR efforts increase overall satisfaction 9.Satisfied with on-the-job training 10.Manager treats employee with respect and dignity

Relationship of CSR and Employee Engagement Note: values represent percent favorable

Employees are Engaged by: Leaders who inspire confidence in the future Managers who respect and recognize employees Exciting work which employees know how to do Organizations that demonstrate a genuine responsibility to their employees and communities

Safety as a Priority by Country Note: values represent percent favorable

Engagement and Work/Life Balance Note: values represent percent favorable

Work/Life Balance Support by Country Note: values represent percent favorable

Employee Perceptions of Organization Involvement in Corporate Social Responsibility Note: values represent percent favorable

Corporate Social Responsibility Efforts Increase Satisfaction by Age Note: values represent percent favorable

Ratings of Organization’s “Greenness”

CSR and Organizational Outcomes Strong CSR Culture Weak CSR Culture Reputation Performance Note: values represent percent favorable

CSR/CR and Employee Opinions CSR/CR efforts are positively related to favorable responses from employees about – Senior leadership – Employee engagement – Reputation – Performance CSR/CR efforts have also shown relationships to favorable responses from employees about – Values – Culture – Orientation toward customers

Key Findings About Organizations that Demonstrate Genuine Responsibility Globally, 59% of workers believe their organization views safety as a priority; the United States ranks first, Russia last Employees in manufacturing are most likely to believe their organization views safety as a priority, employees in retail the least Engagement among employees who perceive support for work/life balance is 4x greater than among those who do not Worldwide, 56% of workers report that their organization is involved in corporate responsibility initiatives Workers between years of age and those over 63 years of age are the most likely to report that their employers’ corporate responsibility efforts increase their overall satisfaction

Connecting with Current and Future Employees Prospective employees care about an organization’s values and reputation CSR/CR efforts should be leveraged as employment branding to candidates – Candidates should desire this type of climate – This is especially true if CSR/CR is linked to desired outcomes Employee retention Beyond the paycheck

Conclusions and Thoughts CSR Efforts must be sincere If employees perceive efforts are insincere, positive relationships among desired perceptions do not exist Employee perceptions of insincere efforts will be related negative effect on other organizational level perceptions Lessons from Cause Marketing (Ervin & Smith Advertising Agency)

Conclusions and Thoughts Future of CR/CSR Practices Transition from an Independent Effort to Overall Business Strategy Development Across Organizations Mentoring Business decisions Organization and societal leadership Needed/Suggested Research KRI/Kenexa Next Steps

Questions or Reflections?

Contact Anne E. Herman, Ph.D. Kenexa Research Institute Tel +1 (402) For Publication or Press information, please contact Jennifer Meyer at