The Effects of Corporate Social Responsibility on Employees' Motivation: A case of Orkuveita Reykjavíkur and its subsidiaries

Abstract

Abstract Corporate social responsibility (CSR) has gained attention and become an important part of the organisational strategic work. CSR has resulted in an increased awareness of employees’ motivation and vice versa. Companies can use CSR as a tool for motivating employees at workplace. The aim of this study is to investigate the perceptions of managers and employees about effects of CSR on employees’ motivation. In addition, this study helps in identifying the impact of various CSR practices on employees’ motivation. This study was carried out to find the effects of so called internal and external CSR on employees’ motivation in Icelandic energy companies which are (Orkuveita Reykjavíkur and its subsidiaries). The study examined the relationship between internal CSR (employee related), external CSR (customers, local community and business partners related) with employees’ motivation. Mixed methods, i.e. questionnaire and interviews, were used to collect data. The questionnaire was filled by 122 employees of Orkuveita Reykjavíkur and its subsidiaries. Statistical tests like regression and correlation analysis along with descriptive statistics were conducted to analyse CSR effects on employees’ motivation. Findings suggest that there is significant relationship between internal and external CSR practices with employees’ motivation. In addition, managers were interviewed about CSR activities and its impact on employees’ motivation. The findings from the interviews also support the importance of internal and external CSR for employees’ motivation. Managers perceive that internal CSR (employees related) and external CSR practices (customer and local community related) greatly affect employees’ motivation. Yet, managers did not recognize the CSR practices towards business partners as a motivation factor for employees. The study supports the claim that motivation of employees can be increased with the activities of CSR. The research indicates that companies can focus on CSR practices in order to enhance employees’ motivation.