This chapter aims to present an overview of the background, statement of the problem, objectives and significance of this study. Besides, definition of the key terms is demonstrated in the end as well.
Background of the Study
Due to the rapid development of globalization, the strict supervision of government and the widespread coverage of Internet and media, today’s business organizations encounter a number of challenges (Marquis, Thomason, & Tydlaska, 2014). For example, the change of customers’ purchase habits and preferences, the competition from all over the world, the call for environmental sustainability, and the rights for employees to have work-life balance. All of these issues can be handled when organizations fulfill their corporate social responsibility (CSR) completely.
Hence, CSR related initiatives have grown rapidly in the global business context in these few decades, as organizations are now taking it as a strategy to satisfy different stakeholders’ needs (Bučiūnienė & Kazlauskaitė, 2012).
A survey conducted by PricewaterhouseCoopers in 2002 pointed out that 70 percent of global CEOs regarded CSR as one of the big factors for firms’ profitability (Vogel, 2005). This statistic reflects that CSR has evolved as a key role in enterprises’
overall operation and core strategy which lead to the success (Carroll & Shabana, 2010). Take Taiwan as an example, the development of CSR receives more and more attentions by profit and non-profit organizations and government. Especially, the high risk of the food and industrial safety are the serious issues worried by most of Taiwanese in recent years (Huang & Kung, 2010). Thus, according to the press release announced by Taiwan Stock Exchange (TWSE, 2015) and Financial
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Supervisory Commission (FSC, 2014), companies such as chemical and financial industries, big corporations with paid-in capital more than NT$10 billion, and food processing firms are mandatory required to compile CSR reports, which can be seen as a tool to link corporations with their stakeholders whom will get more clear information about whether business organizations practice their social responsibilities to the best.
CSR encompasses business ethics and indicates that business organizations should treat their stakeholders with ethical and responsible approaches (Hopkins, 2003). As for employees’ perception of CSR, it refers to the extent that employees perceived organizations support the initiatives related to social issues (Lee, Park, &
Lee, 2013). With the trend that CSR becomes more and more recognized, it is unfortunate that employees’ perceptions and thinking toward CSR are often ignored, while employees are one of the most prominent stakeholders to organizations who have strong legitimacy and power to influence organizations’ performance (Greenwood, 2007). Hence, if companies aim to execute CSR strategically, then the big challenge for organizations is to integrate CSR with internal operations and value rather than view it as a peripheral project merely (Hassan, 2007). In this sense, exploring employees’ perceptions of CSR is an important indicator to know whether organizations fulfill their CSR thoroughly.
Lee et al. (2013) found that employees’ perceptions of CSR can stimulate employees’ attitudinal, emotional, and behavioral responses and all of these responses are crucial to employee engagement. Employee engagement refers to one’s emotional, physical, and cognitive status leading directly to corporations’ ideal performance (Shuck & Wollard, 2010). Serving as a critical element to organizations’ success and competitive advantage as claimed by Macey, Schneider, Barbera, and Young (2009),
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employee engagement is one of the few constructs which captured a great amount of concern of both practitioners and scholars in this recent decade (Saks & Gruman, 2014). The related issues have been reported time to time. For example, Gallup (2016a) found that among 230,000 employees in 142 countries, there were merely 13% of them engaging in their work. Specifically, a lower productivity resulted from a large number of disengaged employees leads the USA economy loses approximately 500 billion dollars per year. Therefore, employee engagement is an issue that organizations cannot neglect owing to the reason that it is an important predictor for productivity, motivation, job satisfaction, and intention to leave (Bakker, Demerouti,
& Schaufeli, 2003; Bakker, Schaufeli, Leiter, & Taris, 2008).
It is proposed that embedding CSR into employees’ job and incorporated it into firms’ daily operation are the effective ways for organizations to retain employees, as when employees’ perceive meaningfulness in their work, they tend to increase engagement toward the works and have fewer tendencies to leave organizations (Glavas & Piderit, 2009). While supervisors play important roles to fulfill this task due to one of their key missions is to incorporate organizations’ CSR value into different subordinates’ job packages including job duties, salary and welfare benefits based on the individual needs (Bhattacharya, Sen, & Korschun, 2008).
Alfes, Truss, Sone, and Gatenby (2013) also mentioned that in contrast to the extensive organization, supervisors are the ones having closer relationship and direct interaction with subordinates. They can offer more individualized treatment to inferiors. Thus, supervisors act as critical roles to provide humanized support and communicate organizations’ CSR policies thoroughly to the lower level employees for stimulating the greater employee understanding of organizations’ CSR practice (Slack, Corlett, & Morris, 2015). Perceived supervisor support (PSS) is widely characterized
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as the extent that employees perceived their achievements and welfare valued by supervisors (Kottke & Sharafinski, 1988). Shanock and Eisenberger (2006) found that when subordinates perceive support from their supervisors, they will increase their in-role and extra-role performance as reciprocation based on social exchange theory.
Therefore, perceived supervisor support will strengthen the connection between employees’ perception of CSR and employee engagement.
Problem Statement
After reviewing the literature related to employees’ perception of CSR, employee engagement and PSS, the researcher found that there are some gaps to be filled.
Therefore, this study aims to enlarge the current literature in the following aspects.
First, Aguinis and Glavas (2012) mentioned that there is a knowledge gap existing in the literature linking CSR to micro OB, I-O psychology, and HRM. Since most of the studies in CSR are mainly concentrated on either organizational level or institutional level which stresses on the influence on external stakeholders or financial performance (Aguinis & Glavas, 2012). While CSR idea is described as connecting organizations’ macro levels with micro levels (Aguilera, Rupp, Williams, &
Ganapathi, 2007; Lindgreen & Swaen, 2010). This study developed CSR research based on the individual level of analysis. In fact, applying the individual level of measurements can help us to better understand the degree of the embeddedness of CSR within organizations (Glavas & Kelley, 2014).
Second, the future research direction given by Glavas and Godwin (2013) stated that with CSR receiving greater concerns nowadays, it is worth to understand the impact of CSR on employees in more aspects such as employees’ performance and work behaviors. While Lee et al. (2013) indicated that the extant CSR studies are
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primary focused on customer perception instead of employees’ perspective. Prior studies in this realm related to employees are mainly focused on organizational citizenship behaviors (Jones, 2010; Rupp, Shao, Thornton, & Skarlicki, 2013) and job performance (Vlachos, Panagopoulos, & Rapp, 2014), while the research specifically talked about the relationship between employees’ perception of CSR and employee engagement are very scant.
On the other hand, Gallup an international performance-management consulting corporation conducted a survey on March 2016 indicated that in America, there were only around 34% workforce engaged in their works (Gallup, 2016b). In fact, it was the highest percentage that Gallup had ever collected since it started tracking the degree of employee engagement of the employees in U.S. in 2011. The disengaged situation among the workforce has been described as an “engagement gap” which not only happens in America today but also exists in other areas around the world for a long time (Saks & Gruman, 2014). Therefore, it desperately needs more research to discuss the approaches to increase the degree of employee engagement. In light of this point, the present study focused on CSR to see whether it would cause any impact on employee engagement.
Purpose of the Study
Today, CSR has been evolved as a critical issue that organizations can not overlook. With more and more organizations in Taiwan are now endeavoring to practice CSR initiatives, and owing to the reason that employees are one of the most prominent stakeholders in organizations (Slack et al., 2015), thus it is worth to take employees’ perception of CSR as an important indicator to know whether organizations’ CSR implementation do really have any substantial effects internally.
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Instead of implementing CSR for symbolic purpose only, organizations can get more advantages by executing it strategically. If employees who perceive higher degree of CSR presented to have higher degree of employee engagement, and perceived supervisor support did serve as a moderator in this relationship, then the main objectives of this study aimed to push CSR become a more strategic role and emphasized on the positive impact that CSR may cause to employees as well as the importance to select right supervisors who can be the representatives of organizations and are willing to support inferiors. Thus, the purpose of this paper was to explore the impact of employee’s perception of CSR on employee engagement as well as the moderating effect of perceived supervisor support on this relationship.
Research Questions
According to the points of view mentioned in this section, this study proposed the following questions:
1. Do employees who perceive higher degree of philanthropic CSR activities have higher degree of employee engagement?
2. Do employees who perceive higher degree of ethical CSR activities have higher degree of employee engagement?
3. Do employees who perceive higher degree of environmental CSR activities have higher degree of employee engagement?
4. Does perceived supervisor support moderate the relationship between employee’s perception of philanthropic CSR activities and employee engagement?
5. Does perceived supervisor support moderate the relationship between employee’s perception of ethical CSR activities and employee engagement?
6. Does perceived supervisor support moderate the relationship between employee’s
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perception of environmental CSR activities and employee engagement?
Significance of the Study
There are three major contributions in the current study. First, in academic aspect, the result of this study can fill the gaps mentioned previously. In addition, the moderating effect of perceived supervisor support on the relationship between employee’s perception of CSR and employee engagement had never been examined, so the researcher will know more details from the outcome of this study.
Second, a survey conducted in the end of 2005 indicated that over sixty percent of HR professionals concerned about the ways to enhance employee engagement and productivity (HR Focus, 2006). Therefore, this research can be a reference for HR practitioners to convince others in organizations to take CSR as an approach to deal with the disengaged workforce.
Third, for large organizations which can take the result of this study as an evidence to select those who can truly deliver organizations’ value, communicate firms’ messages and support inferiors as supervisors, otherwise, it is difficult for employees to perceive the substantial influence from organizations’ CSR implementation. Only when employees perceive higher degree of shared ownership, they will engage more of themselves in the work as reciprocation (Glavas & Piderit, 2009).
Definition of Terms
Employee’s Perception of Corporate Social Responsibility
Employee’s Perception of Corporate Social Responsibility is described as the perception that an organization’s employee hold toward the influence of the firm’s
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strategies and initiatives on the felicity of all its stakeholders and the environment (Glavas & Godwin, 2013).
Employee Engagement
Employee Engagement is defined as the degree that one’s cognitive, emotional, and physical energy be authentically showed out in his or her work roles (Kahn, 1990).
Perceived Supervisor Support (PSS)
Perceived Supervisor Support is characterized as the extent that employees perceived their contributions and welfare recognized by their supervisors (Kottke &
Sharafinski, 1988).
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