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Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives

Author

Listed:
  • Lea Cassar
  • Stephan Meier
Abstract
Prosocial incentives and Corporate Social Responsibility (CSR) initiatives are seen by many firms as an effective way to motivate workers. Recent empirical results seem to support the expectation that prosocial incentive, e.g. in the form of a charitable donations by the firm, can increase effort and motivation – sometimes even better than monetary incentives. We argue that the benefits crucially depend on the perceived intention of the firm. Workers use prosocial incentives as a signal about the firm's type and if used instrumentally in order to profit the firm, they can backfire. We show in an experiment in collaboration with an Italian firm, that monetary and prosocial incentives work very differently. While monetary incentives used instrumentally increase effort, instrumental charitable incentives backfire compared to non-instrumental incentives. This is especially true for non-prosocially-motivated workers who do not care about the prosocial cause but use prosocial incentives only as a signal about the firm. The results contribute to the understanding of the limits of prosocial incentives by focusing on their signaling value to the agent about the principal's type.

Suggested Citation

  • Lea Cassar & Stephan Meier, 2017. "Intentions for Doing Good Matter for Doing Well: The (Negative) Signaling Value of Prosocial Incentives," NBER Working Papers 24109, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:24109
    Note: AG LS
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    References listed on IDEAS

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    Cited by:

    1. Non, Arjan & Rohde, Ingrid & de Grip, Andries & Dohmen, Thomas, 2022. "Mission of the company, prosocial attitudes and job preferences: A discrete choice experiment," Labour Economics, Elsevier, vol. 74(C).
    2. Bigoni, Maria & Ploner, Matteo & Vu, Thi-Thanh-Tam, 2023. "The right person for the right job: workers’ prosociality as a screening device," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 53-73.
    3. Colleen M. Boland & Corinna Ewelt-Knauer & Julia Schneider, 2022. "The gift that keeps on giving: corporate giving and excessive risk-taking," Journal of Business Economics, Springer, vol. 92(3), pages 355-396, April.
    4. John A. List & Fatemeh Momeni, 2021. "When Corporate Social Responsibility Backfires: Evidence from a Natural Field Experiment," Management Science, INFORMS, vol. 67(1), pages 8-21, January.
    5. Briscese, Guglielmo & Feltovich, Nick & Slonim, Robert L., 2021. "Who benefits from corporate social responsibility? Reciprocity in the presence of social incentives and self-selection," Games and Economic Behavior, Elsevier, vol. 126(C), pages 288-304.
    6. Reggiani, Tommaso G. & Rilke, Rainer Michael, 2020. "When Too Good Is Too Much: Social Incentives and Job Selection," IZA Discussion Papers 12905, Institute of Labor Economics (IZA).
    7. Matthew Amengual & Evan P. Apfelbaum, 2021. "True Motives: Prosocial and Instrumental Justifications for Behavioral Change in Organizations," Management Science, INFORMS, vol. 67(8), pages 5032-5051, August.
    8. Jintao Lu & Mengshang Liang & Chong Zhang & Dan Rong & Hailing Guan & Kristina Mazeikaite & Justas Streimikis, 2021. "Assessment of corporate social responsibility by addressing sustainable development goals," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(2), pages 686-703, March.

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    More about this item

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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