The correlational study made use of a quantitative research design to evaluate the perceptions of employees towards CSR programs in Thailand. A descriptive survey approach was utilized in this particular research. The study had been informed by several intricate factors; key among them the fact that ethical concern and behavior have become a fundamental requirement in the increasingly intertwined corporate world of modern times. The findings were interesting and insightful. They helped to reinforce the argument that people’s development and CSR are the two most important aspects that attract top employees to their present positions at the workplace.
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Findings suggest that CSR can effectively be used to improve the quality of human resources in addition to reducing recruitment costs and improving employee retention levels. Through the study, it has been revealed that CSR is beneficial to the organization in terms of HR management as it facilitates employer-employee relations in regards to recruitment, retention, satisfaction, morale, trust and loyalty, motivation and productivity. To attract the best talents, organizations must therefore comprehensively invest in CSR strategies such as workplace health and safety, performance-based reward system, open communication channels, employee feedback, and training and career development
The history of corporate social responsibility (CSR) is almost as elongated as that of companies. Many organizational historians will readily agree to the fact that CSR as a business and ethical strategy has been around ever since commerce was introduced into the global scene (Welford 2005). However, the past few decades have witnessed the exponential growth of CSR within organizational frameworks. Presently, directional signals within companies increasingly point towards corporate giving, corporate reporting on CSR initiatives, creation of corporate social values to assist communities, and a noticeable shift from corporate giving as a requirement to giving as a strategy (Kotler & Lee 2005).
According to Jamali & Sidani (2008), this transition has been necessitated by an interplay of factors, which include increased public awareness, the emergence of strong interest and professional assemblies, legal and government concerns, and versatile media coverage. Consequently, these factors have put many companies on notice to act in a socially responsible manner.
CSR is about how companies align their norms and behavior with the prospects and requirements of stakeholders, not just investors, and consumers, but also employees, local populations, suppliers, contractors, vendors, regulators and society as a whole. Hoskins (2005) is of the view that CSR describes an organization’s obligation to be answerable to its stakeholders. Adams, Hill, & Roberts (1998) postulates that CSR practice makes business entities to become more productive, innovative, and competitive.
According to the author, CSR activities enhance organizational efficiency, improve risk management, support constructive associations with the investment community, and enhance employee relations. CSR has attracted worldwide interest and acquired a new meaning in the global economy mainly due to the arrival of globalization and international trade, which has ultimately enhanced business complexity and brought new demand for improved transparency and corporate citizenship (Jamali & Mishak 2007).
The global development of CSR has been neither linear nor uniform. The concept has become a mainstream activity in developed countries, where it has been existence since the 18th and 19th centuries (EIU 2005). During the early period, CSR was demonstrated in appeals from anti-slavery interest groups for the general public to buy commodities such as sugar from nations that were free from slavery. Corporate practices in the 1900s, invariably viewed as socially responsible, took diverse approaches such as philanthropic contributions to charity, social service to the community, improving employee welfare, and supporting religious conduct (Banerjee 2007).
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A growing tendency towards CSR has also been noted in emerging economies, though to a lesser extent. The big variations in the growth of CSR strategy between developed and developing countries can be attributed to disparities in the economic and cultural environment, ethical judgment, national legislative requirements, and alternative functions played by companies in each country (Adams, Hill, & Roberts 1998).
A 2005 online survey conducted by Economist Intelligence Unit (EIU) in conjunction with Oracle came up with important insights for the CSR strategy. According to the survey, the most important features of CSR include the ethical behavior of employees, good corporate governance, and transparency of corporate transactions (EIU 2005). From a business perspective, the study proved CSR had unrivaled benefits of brand enhancement and enhanced employee morale. Still, organizations with high CSR standards are clearly able to display responsibility to investors, government regulators, shareholders, employees, consumers and the general public (Kotler & Lee 2005). These aspects permit individual companies to manage risk and enhance their corporate reputation (Jamali & Sidani 2008).
Ethical concern and behavior have become a fundamental requirement in the increasingly intertwined corporate world of modern times (Meehan, Meehan, & Richards 2006). It is beyond doubt that ethical corporate behavior reflects positively on the reputation and long-term accomplishment of a business organization. Researchers accentuate the fact that ignoring fundamental issues of business ethics can have far-reaching effects on a business entity of any nature and size (Sims 2003).
As such, a concerted effort to incorporate business ethics with corporate governance must be undertaken by forward-looking business organizations If recent corporate failures involving huge conglomerates such as the Lehman Brothers, Enron, Tyco International, Parmalat, Salomon Smith Barney, among others, is anything to go by (Sims 2003; Koh & Boo 2004). In retrospection to the humiliating accusations that rocked some of these organizations, it is only imperative that companies engage in CSR strategies that will guarantee ethical working relationships (Kotler & Lee 2005).
A Brief Overview of CSR and HRM
From its inception, CSR has fundamentally concentrated on environmental and social health issues (Kotler & Lee 2005). More often than not, it has been guided by the realization that sustainable business accomplishments cannot be realized sorely through capitalizing on short-term profits, but instead through comprehensive market-oriented yet conscientious behaviour (Sims 2003). Business has also realized that nurturing a formidable corporate culture which ultimately emphasizes CSR values and competencies is absolute necessity if they are to achieve synergistic benefits (Sharma, Sharma & Devi 2009). In this perspective, CSR strategies have recently expanded to cater for the human resource management (HRM) component of organizations (Strandberg 2009).
Previous researches have drawn a correlation between CSR and HRM practice. For instance, Greening and Turban (2000) postulated that “Job applicant and employee perceptions of a firm’s CSR determines their attractiveness towards organizations” (Sharma, Sharma & Devi 2009, p. 209). Galbreath (2006) found out that investing in employees affirmatively and significantly influences the performance of companies.
In yet another study, Cropanzano et al (2001) aptly established that employee attitudes, behaviours, and value systems are profoundly prejudiced by the fairness of organizational behaviour and actions towards them. Other studies have revealed that good relationships with members of staff facilitates a company to achieve further benefits, including enhancing their public image, improving employee confidence, and support from the community.
The role of CSR in embedding employees to an effective corporate culture can never be underestimated (Sharma, Sharma & Devi 2009). A corporation can demonstrate a better image in the minds of potential or current employees by presenting itself as an outstanding employer which cares for its employees and engages them in the ambit of social responsibility. The continued interest employees have on CSR strategies indicates the strategic importance of social responsibility programs in HRM initiatives of an organization (Kotler & Lee 2005). In the same vein, HR policies create an active responsiveness towards the need to achieve the organizational goals and objectives in the best possible and ethical manner (Agrawal 2007). Below, a conceptual model developed by Jonker & Witte shows the interrelationship between CSR and employee behaviour.
The Study Context
The Kingdom of Thailand is an independent nation that lies in the heart of Southeast Asia. Geographically, Thailand is bordered to the North by Burma, to the south by the republic of Malaysia and Thailand archipelago, to the east by Laos and the Kingdom of Cambodia, and to the West by Andaman Sea and the Union of Myanmar (Oxford Business Group 2008). It has a population of 64 million people, who are predominantly Buddhists.
By size, Thailand is the 50th largest country in the world, measuring approximately 513,000 Km2. The capital city of Thailand is known as Bangkok, which also sums up as the country’s epicentre of political, economic, industrial, and socio-cultural activities. It is imperative to note that Thailand is a newly industrialized nation, thanks to the rapid economic expansion witnessed in late 1990’s and its world-famous and glamorous tourist sites such as Pattaya and Phuket (Henderson 2007).
Although CSR in Thailand is often perceived as a western ideology, there exist formidable roots for social responsibility in cultural beliefs and corporations (Wedel 2009). However, the CSR strategies practiced around the country are sometimes hard to delineate from religion and royal dogmas. As a matter of fact, over 90% of the population practice Buddhism, a religion that requires the faithful to care for the communities around them. Models for CSR have penetrated the country through concerted efforts from multinational corporations such as Coca Cola, Intel, Shell, Chevron, Nike, and Dow Chemical (Henderson 2007).
A previous survey conducted by Kenan Institute Asia (KIA) revealed that multinational and local companies operating in Thai concentrated more on internal facets of CSR such as corporate good governance, treatment of employees, and reasonable operating standards at the expense of external features such as community engagement, environmental issues, and human rights.
The ‘human capital’ is the most fundamental asset of any organization. As such, recruitment, motivation, retention, and development of competent and talented staff are primary to any organizational success. With the emergence of regional and international trading blocks coupled with the escalating globalization process, doors are opening for experienced labour to search for employment in diverse parts of the world (Murphy 1995). Indeed, employees are increasingly having the opportunity to work in diverse cultural backgrounds and relocate to where there expertises are most needed.
A significant way of executing CSR strategies in any business setting would be to develop an ethical corporate culture through the inclusion of CSR in the objectives and mission statements, in addition to integrating CSR efforts into the strategic goals of the organization (Strandberg 2009). However, this is not done in many organizations. Further a field, although CSR as an organizational strategy have become a recognizable phenomenon, very few studies have been done on the relationship between CSR strategies on one hand and employee attraction, motivation, and retention on the other.
A massive online survey postulated that people development and CSR were the two most important aspects that attracted top employees to their present positions at the workplace (DTI 2004). Indeed, it becomes difficult to talk about CSR without making reference to employees as stakeholders of an organization. But as already mentioned, this subtype of stakeholders has received comparatively little consideration in existing CSR literature especially in Asian countries such as Thailand. This is significantly surprising considering the fact that attraction of talent, recruitment, loyalty to the organization, retention, and motivation has been considerably used elsewhere to explain why CSR can be used to analyze the competitive advantage of an organization (Castelo & Lima 2006). It is this gap that the study sought to fill.
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The general objective of this study was to evaluate the perception of employees towards Thai listed companies. The study aimed to achieve this purpose by undertaking a critical evaluation of a cross-section of Thailand’s listed companies, mainly in the agro & food business, financial, industrial, technology, consumer products and service sectors. The following were the specific objectives:
- To develop a better understanding of Thai listed companies use of CSR approaches to retain their best employees.
- To develop a better understanding of how internal and external CSR strategies affects employee recruitment, retention, and motivation in selected Thai listed companies.
- To outline the role of religion in the development of Thai CSR strategies and its effects on employee retention.
Key Study Hypothesis
The study was guided by the following propositions:
- H1: CSR strategies are positively correlated to employee recruitment, retention and motivation.
- H2: potential employees concentrate more on internal CSR aspects than external CSR aspects when making important employment decisions.
- H3: High-end employees scrutinize CSR policies more than low-end employees.
- H4: Companies with comprehensive CSR strategies often performs well due to the positive evaluation they receive from society.
Value of Study
The value of this study can never be underestimated. Many conscientious and assiduous managers are spending sleepless nights trying to come up with strategies of how to prevent their best employees from leaving the organization. According to Kotler & Lee (2005), a motivated and creative workforce is the best gift that an organization can get since it ensures productivity and good reputation. This particular study came up with a body of knowledge that could be used by managers in reviewing their CSR strategies to enable them retain the best workforce while gaining admirable reputation from the communities living around the organizations.
The study also filled the information gap that existed in most corporations about whether to pursue internal or external CSR, or a mix of the two strategies in relation to attracting the best crop of employees to the organizations. A study conducted by KIA had previously revealed that most Thai companies concentrated more on internal CSR at the expense of community-based CSR strategies (Wedel 2009).
If this was the case, what implications does such an arrangement have on the strategies employed by organizations to retain employees and motivate others to join them? Are employees overly concerned about which type of CSR approach an organization uses in purely ethical terms? Through this research, these and many other questions about the relationship between CSR approaches and employee retention were answered.
Other than the usual limitations of time and resources, the study was unable to engage local corporations since much lack an active CSR strategy in addition to the fact that many local organizations are not listed at the stock exchange. As such, the study mainly dealt with multinational corporations as they are uniquely the largest players and consumers of CSR related benefits in Thailand’s business scene. The study was also limited in scope since it could only concentrate on knowledge-intensive industries. The basic idea that informed this line of thinking was that high quality workforce is much more needed in high-end industries than in low-end organizations.
The dissertation will comprise five chapters, namely: Introduction, literature review, methodology, study findings and discussions, and finally conclusions, recommendations and future research areas. Chapter one, presented above, discusses the background, problem discussion, study objectives and key research hypothesis. Chapter two concerns itself with the review of related literature for this particular study, including an evaluation of relevant theories related to the key study hypothesis. Chapter three, the methods section, covers the conceptual framework and variable description, research design, data collection techniques, data analysis, and issues of validity and reliability. Chapter four contains the research findings and discussion, while chapter five presents some important conclusions and recommendations arising from the study findings, and future research areas.
Review of Related Literature
The business and ethical case for CSR is compelling (Kotler & Lee 2005). Repetitive studies conducted over time, especially in the US and Europe reveals that organizations become more competitive and profitable by making CSR a part of their core business processes. According to the studies, the non-financial component of the organizations works positively to improve the financial component. During the past few decades, the function of CSR in informing crucial organizational strategies such as labour relations and community-based partnerships has immeasurably expanded to not only affect the organization’s profitability, but also influence its human capital and employee retention strategies (Bhattacharya, Sen, & Korschun 2008).
Indeed, a 2002 survey conducted by DePaul University revealed that organizations with a clearly stipulated corporate commitment to CSR registered elevated sales and revenues than their counterparts that did not. A Harvard University Study spanning 11 years similarly revealed that stakeholder-balanced organizations exhibited four times the growth rate when compared with shareholder-centred organizations.
In the latter set of organizations, employee turnover was found to be eight times more than the former organizations (Kotler & Lee 2005). These are interesting findings that further helps to reinforce the fundamental role of CSR in shaping business processes. However, to understand the interrelationship better, a comprehensive definition of CSR is needed at this stage since the notion of CSR is sometimes blurry and riddled with indistinguishable boundaries and controversial legitimacy (Lantos 2001).
Definitions of CSR
The proposition that organizations do have a social responsibility has been comprehensively discussed in various literatures for over 50 years now. However, as explained above, the concept of CSR is still predominantly ambiguous and vague (Lantos 2001). In a span of a few decades, several diverse names such as Corporate social Responsibility (CSR), Global Citizenship (GC), Corporate Citizenship (CC), and Corporate Accountability (CA) have been advanced to similar or significantly diverse aspects of the CR practice (EIU 2005).
Adams, Hill, & Roberts (1998) defines CSR as open and transparent organizational practices and activities that are predominantly based on ethical norms and respect for employees, societies, the environment, and resoundingly aimed at delivering sustainable value to the community at large as well as to all shareholders. Ghauri & Cateora (2006) argues that CSR as “…social responsibility means that a company plays a role in society that is beyond its economic goals and that makes a constructive contribution towards society’s well being in the long term” (p.469). These definitions clearly reveal that organizations bear a fundamental obligation to constituent clusters in society and to their employees beyond what is commonly prescribed by law, regulations, and the union contract.
Theoretical model: the Ideological Theory of Social Responsibility
This theory presupposes that an entity, either a government agency, organization, or an individual, has an overriding responsibility to the community (Barth & Woiff 2009). The theory also assumes that such responsibility can either be negative in as far as it is perceived as a responsibility to abstain from acting (negative stance), or it can be perceived as positive in as far it gives the particular entity a responsibility to perform an action (proactive stance).
This theory makes several interesting arguments. First, there exists a large disparity in the means and functions of diverse entities to accomplish their stated responsibility. This implies that different entities have diverse functions to play in the web of social responsibility. Second, the entities should respect the rights and aspirations of their stakeholders in as much as the stakeholders respect the rules and regulations governing the entities. For instance, organizations should respect and enhance the collective rights of their employees in equal measure as the employees should abide by and respect the written laws of the organization.
The ideological theory of social responsibility also argues that social responsibility must be voluntary as it is all about going above and beyond what is normally required of the entities by legal establishments (Barth & Woiff 2009). The theory is informed by the basic notion that it is much more preferable to be proactive towards any given situation rather than to be nonchalantly reactive. Consequently, the notion means that social responsibility should be able to amend the problem or situation before the damage is done.
The theory also argues that in today’s modern society, organizations must strive to maintain ethical principles if they are to become successful (Barth & Woiff 2009). Organizations must then use ethical decision making processes to boost their businesses. For instance, ethical decision making can be utilized to facilitate productivity and performance by coming up with CSR programs that directly improves the benefits received by employees from the organization.
This may include better healthcare strategies and enhanced pension programs. In this perspective, organizations must always remember that their employees are fundamental stakeholders in business. According to the theory, employees have a vested interest in what the organization does and how it is run. Consequently, when the organization is perceived to feel that their members of staff are a precious asset and the staff members in turn recognizes they are being treated with respect, productivity increases.
Aspects of CSR
With globalization, CSR has matured to an important theme around the world. Organizations are becoming increasingly confronted with this theme from a variety of angles (Kotler & Lee 2005). For instance, CSR is increasingly being discussed in the press, while consumer and rights organizations are progressively demanding information about production situations and routes to the market. In modern times, NGOs are increasingly approaching organizations to demand for explanations about their commitment to society, and politicians have suddenly realized that CSR is a good area for policy making.
An organization’s Internal CSR aspects manly deals with how it treats its employees. These aspects include written policy frameworks on non-discrimination in the workplace; statements of equal employment opportunities and implementation plans; statements on average working hours, highest overtime hours allowed, and fair wage structures; policy frameworks on employee development, on-the-job educational programs and vocational trainings; policies on various basic rights while in employment such as freedom of association, complaint processes, and collective bargaining; and the upholding of human rights in the organization’s fundamental operations (Welford 2005).
A company’s CSR external aspects mostly deals with the interrelationship between the organization and an array of external influences such as governments, regulators, businesses, and local communities (Kotler & Lee 2005).
To mention them in brief, these aspects include policy frameworks on adopted labour standards; policies on constraints and uses of child labour; obligation to safeguard human rights within the organization’s sphere of influence; commitments to safeguard health, safety and environmental concerns of all stakeholders including the local community; policy frameworks on the resolution of complaints among all stakeholders; regulations on equitable trade and end-price auditing; policy frameworks on safeguarding the rights of indigenous populations; and the code of ethics (Welford 2005).
CSR and Stakeholders
A stakeholder can be described as any group, process, or individual that can affect or is significantly affected by the accomplishment of organizational objectives (Freeman & Evan 1993). CSR puts its emphasis on stakeholders since organizations do have a responsibility to all groups or individuals that they influence either positively or negatively. According to Kotler & Lee (2005), an organization assigns diverse concerns to dissimilar stakeholders based on their salience in regards to power, necessity and legitimacy. The stakeholder management theory is based on the concept that organizations comprise of interdependent interactions with stakeholders and need to operate within this framework of stakeholders who can impact the organization directly and indirectly.
Ghauri & Cateora (2005) are of the opinion that companies affect and are affected by a wide array of stakeholders, including owners, investors, employees, management, legislators, suppliers, customers, regulators, and the local community. It is up to the company to initiate strategies aimed at dealing with the interrelationship between the organization and the stakeholders in a socially responsible way. The owners and investors want significant returns on their investments. In this perspective, the company has a responsibility to administer the assets bestowed upon it by the owners. The company must therefore strive to return some fair and competitive rewards to the owners and shareholders, in addition to disclosing pertinent information and respecting their suggestions and opinions (Ghauri & Cateora),
In the stakeholders’ chain, employees expect a fair salary to effectively manage their own affairs and those of their families, in addition to some reasonable degree of security and other benefits arising from their positions of employment (Ghauri & Cateora 2005). In return, employees are expected to follow the instructions given by management, and represent the organization with positive ethical behaviour inside and outside the firm. The relationship between an organization and its suppliers is often viewed as mutual and reciprocal. While the suppliers’ materials and components impacts the quality of products and the reputation of an organization, the organization’s performance impacts the suppliers success either positively or negatively.
The customers are the backbone of the company since they are directly involved in the actual exchanged of goods and services, and the payments that follows (Ghauri & Cateora 2005). This payment is the lifeline of the organization as it provides it with the much needed revenue to pay the owners and employees. The better an organization can satisfy its customers, the more successful it becomes in serving the needs and requirements of other stakeholders.
The immediate community benefits from the activities of the organization due to the taxes paid and employment opportunities presented. From the local community’s point of view, the organization is expected to behave in a responsible manner and must not endanger the community by engaging in anti-social behaviour such as polluting the environment or tax evasion.
CSR and Human Resources
Various studies have noted a significant correlation between the level of CSR and the nature of human resources available within organizations. For instance, Maignan & Ferrell (2001) found out that workers with higher income, education, and cognitive moral development are readily supportive of the CSR practice. According to various studies, CSR is indeed profitable to the human resource capital of organizations practicing it. The positive attitudes exhibited by prospective employees when it comers to evaluating the company’s image and reputation are fundamentally critical in ensuring that organizations get the right mix of skills and professionals for future business expansion (Strandberg 2009).
Consecutive studies have also revealed that companies may be in a position to recruit top employees through the use of CSR as it enables potential employees to evaluate their self-identity against the organization’s own self identity as reflected in the CSR practice (Maignan & Ferrell 2001). Similar identity matches between the employees and the organization have often resulted in formidable organizational bond.
According to Hoskins (2005), the match of organizational values with those of current and prospective employees results in higher employee retention rate. Employees exhibiting the same organizational values as stressed out in the CSR programs are also likely to express high levels of dedication to the company’s success and performance. It is indeed true that benefits accrued by engaging in high external CSR leads to greater organizational commitment from the employees even though such benefits are not meant for the employees.
A study conducted by Albinger & Freeman (2000) revealed that high-end prospective employees are much more likely to consider and evaluate the performance of CSR in prospective organizations than low-end employees. According to the researchers, this could be occasioned by the fact that high-end job seekers are more exposed to information sources and are therefore much more likely to make well informed and comprehensive choices.
This not withstanding, the point is already made that comprehensive CSR strategies have the potential to attract high-end employees into an organization, translating into improved performance for the company. According to Castelo & Lima (2006), CSR has the capacity to influence the financial performance of an organization due to the intangible resources it introduces to the company such as employee know-how, corporate culture and positive reputation.
It is beyond doubt that organizations must therefore introduce CSR strategies that will motivate and retain employees in addition to offering them a fair treatment (Hoskins 2005). This can be achieved by introducing employee liaison groups, staff representatives, and employee focus groups. To attract, retain, and motivate the best employees, organizations must develop CSR strategies that directly relates to employees such as working hours, employment conditions, flexibility, human rights, training opportunities, and remuneration.
CSR and Employee Retention
Employee retention is broadly related to Job satisfaction. Various studies conducted over time have all revealed that inadequate levels of job satisfaction triggers withdrawal behaviours in employees, which are exhibited in certain actions such as absenteeism, early retirements, and lateness (Kotler & Lee 2005). Studies have also been conducted on the real and perceived drivers of employee retention, which arises from either internal or external environment of the organization
The relationship between employee retention and organizational performance has multiple perspectives. First, it is a well known fact that employee retention and satisfaction has a direct impact on the performance of organizations. Second, organizational performance directly impacts on employee satisfaction and retention levels. A 2002 study conducted in the UK revealed that over 82% of UK professionals would never engage themselves with a company whose values they did not believe in. According to the study results, 73% of the professionals said they usually made social and ethical considerations before accepting any job posting (Draper 2002).
Multiple independent surveys conducted in the US on corporate philanthropy a few years ago revealed that workers expect organizations to enthusiastically assist in building a better society (Rubenstein 2004). The above studies reinforces the concept that CSR provides immense benefits to organizations by facilitating employer-employee relations in regards to recruitment, retention, satisfaction, morale, trust and loyalty, motivation and productivity (Kotler & Lee 2005).
The direct correlation between an organization’s level of CSR and employee satisfaction and retention rate is more likely to be articulated by the influence of various components of CSR that expressly impacts on employees at the workplace (Draper 2002). These components include labour practices, human rights at the workplace, training opportunities, and employment relations (Kotler & Lee 2005).
In the same vein, the indirect association between CSR practice and employee retention and Satisfaction rate can be rightly acknowledged through the influence of such factors as the corporation’s reputation, public image, and norms, to the degree to which they are produced and reinforced by the organization’s CSR performance. The diagrammatic expression below reveals how some CSR components affect employee retention and satisfaction in the workplace.
CSR in Thailand
The CSR concept is not a leading management notion in Thailand business, but its significance in recent years is increasing rapidly. According to Wedel (2007), strategies to venture more into CSR practices in Thailand came through concerted efforts made by multinational corporations operating in the country when they started to implement activities and practices perceived as predominantly aligned with their core business approaches in ways comparable to those used elsewhere in the corporations’ global operations. Within the last couple of years, Thai indigenous companies have partnered with international conglomerates to establish CSR practices.
One of the earliest efforts made towards this noble gesture was the establishment of the Thailand chapter of the Business Coalition for Sustainable Development (BCSD-T), which laid emphasis on improving the management of the environment by corporations operating within the country. During this developmental phase, some players such as the Social Venture Network (SVN) and Community Development Association (PDA) worked hard to initiate several middle-sized Thai and international companies into the growing list of organizations with active CSR strategies with the objective of developing creative procedures of drawing business support for community development (Wedel).
Another formidable effort in the development of Thailand’s CSR came from Thailand Business in Rural Development (TBIRD), an organization that advocated for innovative practices such as the establishment of industries in rural areas so that employees never had to leave their rural villages to find employment in urban areas (Wedel 2007). In 2001, a Thai-American development institute – KIA– secured financial support from USAID to begin offering training programs for business executives aimed at facilitating efficiency, effectiveness, creativity, and sustainability of CSR programs. The process has been hastened in the last couple of years, making the CSR practice much more known in the country.
In 2006, the Stock Exchange of Thailand (SET) became increasingly involved in CSR after it became clear that the social responsibility programs were having a positive impact on the organizations practicing them, both internally and externally (Wedel 2007). During this time, SET announced the CSR yearly awards to motivate organizations into joining the practice. In 2007, SET established the Corporate Social Responsibility Institute (CSRI), to promote CSR and institute CSR guidelines for companies operating in the country, yet another clear indication that these programs were socially and economically beneficial to business organizations.
Other mandates entrusted with CSRI included encouraging organizations to be socially responsible, developing database of CSR professionals for Thai businesses, and matching donors with recipients on a needs basis. However, it was decided that CSR was to be promoted in the country as a voluntary rather than an obligatory strategy. To date, Thai government has continued to be active in supporting CSR programs. For instance, the Ministry of Social Welfare and Human Security has worked tirelessly to establish national, regional, and local centres devoted to CSR and Voluntarism
A survey conducted by KIA identified fundamental areas of strengths and limitations among CSR practices in Thailand (Wedel 2007). According to the results, companies operating in Thailand are most resolute on the internal aspects of CSR, comprising of good governance, handling of employees, fair operating standards, and product quality and safety, at the expense of external CSR aspects such as society engagement, environmental concerns, and human rights (Wedel).
Previous studies in the country have also shown that the Thai government is keen on supporting CSR programs since the country is still encountering a myriad of problems ranging from air pollution and traffic congestion to high illiteracy and unemployment levels (Gabriel 2007). Apart from coming up with enticing regulations and promoting political stability, the Thai government is also engaged in CSR partnership programs with organizations doing business in Thai to promote CSR activities.
Although numerous Thai organizations have started their own unique CSR programs, it becomes almost impossible to distinguish them due to strong religious and cultural inclinations. Many CSR programs are embedded in Thailand’s religious inclination since majority of its citizens are predominantly Buddhists (Sivaraksa 2006). Majority of the population still believes that organizations must take a keen interest on Thai traditional values, cultural backgrounds, and religious orientations for the CSR programs to be effective in penetrating society without encountering resistance.
The purpose of this study was to evaluate the perception of employees towards CSR programs in Thailand. To meet the stated objective, the researcher developed comprehensive methodologies aimed at collecting the required type of data for the study while ensuring that the techniques chosen would guarantee sufficient reliability and validity of the study results. In this chapter, the conceptual framework and the research design used in the study are described in detail. In addition, this section discusses the population and sample of the study, and the data gathering instruments used to collect the desired information from the selected sample. Lastly, the section discusses the methods employed to maintain and facilitate validity and reliability of the data collection instruments.
Conceptual Framework and Selection of Variables
According to Sekaran (2006), a theoretical framework “is a conceptual model of how one theorizes and makes logical sense of the relationships among the several factors that have been identified as important to the problem” (p. 87).
Consequently, a theoretical or conceptual framework must effectively be able to map out and discuss diverse interrelationships that exist between the dependent and independent variables viewed to form an indispensable component to the situational dynamics under analysis. In conventional research process, the independent variable is the factor that is often manipulated to evaluate whether or not the study subjects are exposed to the independent variable (Sekaran). The dependent variable is in turn measured to evaluate if the manipulation of a diverse of independent variables had any effect.
This study was interested in evaluating the perception of employees towards CSR programs, especially in terms of attraction, engagement, retention, and motivation towards the goals and aspirations of the organization. Based on the objectives of the study, the CSR programs became the dependent variable while the various factors and influences that employees look for in an ideal CSR program formed the independent variables.
These independent variables were broadly categorized into four broad groups, namely organizational compensation procedures, work environment, Appreciation and Respect, individual development and career growth, and communication channels. Based on the above discussion, the following conceptual model was developed to assist in proving the key study hypothesis.
The correlational study made use of a quantitative research design to evaluate the perceptions of employees towards CSR programs in Thailand. According to Hopkins (2000), quantitative research is often defined as a formal, purposeful, and systematic process used to illustrate and test associations and evaluate cause-and-effect relationships among variables. Accordingly, it was the objective of this study to evaluate how CSR strategies such as work environment, compensation and reward procedures, career development and growth, among others, could positively or negatively affect employee attraction, motivation and retention the respective organizations. According to Sekaran (2006), correlational studies are best used when the researcher want to delineate the primary variables that are associated with a given issue as it is the case in this study.
It is imperative to mention that this study employed a survey study strategy to collect the necessary data needed to prove the research hypothesis. According to Sekaran (2006), surveys can be effectively used when the researcher is interested in descriptive, explanatory, or exploratory evaluation. A descriptive survey approach was utilized in this particular research. Hopkins (2000) concurs that a descriptive survey can be effectively used for purposes of collecting original data that can be used to describe a population too huge to observe directly.
A survey acquires fundamental information from a sample of respondents by way of self report, that is, the respondents answers a sequence of questions posed by the researcher either directly or through the use of online protocols. In this particular study, the information was gathered through the use of self-administered questionnaires dispensed using online protocols.
The descriptive survey technique was preferred by the researcher because it is able to provide a precise account of the characteristics, behaviors, attitudes, abilities, values, beliefs, and knowledge of a particular variable, individual, situation or entity under study (Sekaran 2006). In the same vein, a review of related literature was carried out to undertake a hypothesis-testing study aimed at explaining the nature of associations that existed between CSR and employee perceptions. According to Sekaran, a hypothesis-testing study is best in this type of situation as it “goes beyond mere description of the variables in a situation to an understanding of the relationships among factors of interest” (p. 119).
The study was conducted in Thailand, and targeted multinational corporations and indigenous companies listed in the SET. Many of these organizations are headquartered in Bangkok, the capital city of Thailand. The SET origin dates back to the early 1960s. Its growth has been monumental, incorporating over 520 listed organizations with a combined market capitalization of over $197 billion as of 31st December 2007.
The major group indices in the SET include Agro and Food Industry, Consumer Products, Financials, Industrials, Property and Construction, Resources, Services, and Technology. This study engaged all the mentioned industry groups except the Resources Group. Although CSR is a relatively new phenomenon in Thailand, many organizations led by the multinational corporations have upped their intake of the concept to remain successful in the cut-throat business environment (Gabriel 2007).
The Study Population and Sample
According to Sekaran (2006), a study population is described as all the components – individuals, entities, objects, events, situations – that meet the basic sample standards for inclusion in a study. In this research, the study population consisted of all multinational and indigenous corporations operating in Thailand, and listed in SET. First a convenient sample of 30 organizations was selected from the six major industry indices of Agro and Food Industry, Consumer Products, Financials, Industrials, Services, and Technology.
Hopkins (2000) defines a sample as the components selected by a researcher for purposes of finding out something about the comprehensive population from which the elements are taken. Sekaran argues that a convenient sample consists of respondents in the study context by their very virtue of being in the right place at the right time. Bryman (1989) postulates that the convenience non-probability sampling is mostly used in the field of organizational studies than known probability sampling procedures such as systematic sampling due its high response rate In this perspective, further convenience sampling was done to identify 10 respondents at the managerial level, 10 at the supervisory level, and 10 respondents at the staff level for each of the 30 selected groups from the 6 industry groups.
The Sampling Criteria
The respondents included in the sample were selected to meet some exact criteria that were pertinent to the groups under study. The management personnel had to meet the following standards to be included in the sample:
- Must have held the managerial position for at least 3 years.
- For multinationals, he or she must have stayed in Thailand for at least 2 years.
- Be willing and ready to participate in the survey.
- Must exhibit thorough understanding of CSR activities in Thailand.
- Must be 21 years or older.
- Be of either sex or any race and nationality.
The supervisors had to satisfy the following criteria to be included in the sample
- Must have held the supervisory position for at least 2 years.
- For multinationals, he or she must have resided in Thailand for a period not less than 12 months.
- Must be in charge of at least 10 employees in his or her area of supervision.
- Be willing and ready to participate in the survey.
- Must exhibit thorough understanding of CSR activities in Thailand.
- Must be 18 years or older.
- Be of either sex or any race and nationality.
On their part, the employees had to meet the following standards to be included in the sample
- Must have worked for the organization for a period not less than 12 months.
- Be willing and ready to participate in the survey.
- Must be 18 years or older or older.
- Be of either sex or any race and nationality, but working in Thailand.
Data Collection Instruments
This study utilized both questionnaires and documents to safeguard the validity and reliability of study results (Webb et al 1996). Towards this objective, the researcher chose the questionnaire as the primary data collection instrument for purposes of evaluating how certain employee issues, such as job attraction, motivation, and retention, were influenced by CSR programs practiced in selected organizations in Thailand.
According to Sekaran (2006), a questionnaire is a printed self-report form that is specifically designed to extract fundamental information obtained through the written responses of the selected subjects. Consequently, the information achieved through the administration of a questionnaire is more or less similar to that obtained by a key informant interview though it may lack in depth. According to Sekaran, a researcher may decide to use questionnaires in this type of study due to the following:
- Questionnaires ensure a high response rate as they can be distributed to the subjects for completion at their own convenience then collected or posted to the researcher.
- They involve less time and energy to administer.
- They offer a leeway of anonymity as the names of respondents are not obligatory on the completed questionnaires.
- They offer a minimal opportunity for partiality since they are often presented in a consistent manner.
- Most questionnaires consist of closed-ended items, making it easier to perform a comparative analysis on each item. However, items that may prove useful in exploring new knowledge previously unknown to the researcher should be asked in an unstructured manner.
Three sets of questionnaires were used for the purposes of data collection. The first set targeted the respondents at the managerial level while the second and third sets targeted respondents at the supervisory and staff levels respectively. The questionnaires were in both English and the Thai language to enable the respondents who did not understand the English language to complete them using the local language. The questionnaires consisted of two broad sections for each of the categories, though differences existed on the nature and type of questions posed to each group. Section A intended to gain demographic data for each of the group that could later be used by the researcher to interpret the results. Section B was mainly aimed at evaluating the perceptions that employees held towards CSR programs in Thailand.
Secondary data was collected through the review of related literature and other documented sources such as companies’ annual reports, corporate websites, CSR reports, and journals. According to May (2001), documents form a good source of corporate data and information as they “…represent a reflection of reality.” (p. 182). Another advantage of using documents arises from the flexibility offered in content analysis (Ratanajongkol et al 2006). Still, many researchers perceive the review of related literature as an effective and unobtrusive technique of data collection, which is rich in depicting the values, attitudes and beliefs of the respondents in the setting.
Reliability and Validity
According to Handley (2005), reliability refers to the degree or level of consistency with which the prescribed data collection instruments are able to measure the variables that they are designed to measure. The 3 sets of questionnaires used for this particular research revealed commendable levels of consistency in the responses offered by the subjects. The researcher actively abridged data collector’s error by offering comprehensive guidance to the respondents about how to complete the questionnaires. This guidance assisted to reduce sources of measurement error thereby ensuring that the data collected was reliable. The researcher took the initiative to assure the respondents about their privacy and confidentiality.
The validity of any research instrument is the degree to which the particular instrument is able to measure or evaluate what it has been intended to measure (Handley 2005). The research tool must vehemently be able to represent all the factors and influences under study. This was well catered for in this particular research through the inclusion of specific questions that measured and evaluated the subjects’ knowledge and perceptions of CSR practice in Thailand. In addition, the questions had been formulated based on the comprehensive review of related literature that had been carried out prior to fieldwork engagement.
This added to the validity of results by ensuring that questions asked were entirely representative of what was actually needed to prove or disapprove the study’s key propositions. In the same vein, questions were formulated in an easily understandable language to guarantee clarity of the responses elicited. The above mentioned measures and research strategies ensured both internal and external validity. Ultimately, this ensured that the research findings could be transferred or generalized to other subjects within the population.
Written consents were sought from the management of the selected organizations before the process of data collection could proceed. Verbal or email consents were also secured from all the selected subjects in the 3 subcategories after clarifications were made regarding the objective of the study and the procedures that were to be employed to safeguard respondent confidentiality. A Guarantee was also made to all the respondents that no information was to be released to the public domain in a manner that would jeopardize their confidentiality or positions of employment. The researcher also made use of other rights such as the right to self determination and informed consent to ensure ethical credibility (Sekaran 2006).
After quantitative data was collected, it was cleaned, coded, entered, and analyzed using a computer aided statistical program known as Statistical Package for Social Sciences (SPSS). The closed-ended items were analyzed using descriptive statistics to allow the generation of frequency tables. The data that resulted were harnessed, interpreted, and presented using various statistical techniques such as tables, pie-charts, and bar-charts. The researcher analyzed the qualitative data brought by the open-ended questions using a process known as qualitative content analysis to assist in quantifying emerging features and concepts.
According to Sekaran (2005), qualitative content analysis is a statistical procedure used to systematically analyze verbal and written communications to allow variables to be measured in a quantitative manner. In analyzing the review of related literature, the researcher comprehensively decoded and analyzed the content, key words and repetitive phrases with the aim of proving or disapproving the key study propositions (May 2001).
Results and Discussion
This study had been initiated with a view of evaluating the perception of employees towards CSR programs in Thai listed companies. Out of the 900 questionnaires sent out to the respondents of the 3 study groups within the 6 SET industry groups, the researcher received 352 duly completed questionnaires, representing 39.1% response rate. The study groups comprised of managers, supervisors and employees, while the industry groups included in the study were Agro and Food Industry, Consumer Products, Financials, Industrials, Services, and Technology. In this section, the researcher presents the statement of results followed by a comprehensive discussion of the results based on the study objectives and hypothesis.
Statement of Results
68% of the managers were male while 32% female. Interestingly, over three quarters of the managers admitted that their organizations mentioned the importance of CSR programs and the rules of engagement in their vision and mission statements. Managers also overwhelmingly agreed that CSR is a commitment to all stakeholders and must be communicated to both insiders and outsiders. The various organizations under study referred to CSR programs using different names, key among them corporate citizenship, strategic competitiveness, sustainable development, ethical practices, and social investment.
An interesting finding is that many organizations operating in high-risk areas such as finance and industry identified CSR as corporate citizenship or strategic competitiveness, while organizations operating in low risk areas such as technology and consumer products identified CSR as ethical practices.
The rationale behind establishing the CSR programs differed across the board, with a sizeable number of managers (28%) arguing that CSR assisted their organizations in corporate strategy while 25% saying that the programs assisted in social and environmental issues. 14% argued that CSR was fundamental in retaining key employees. The rest of the information is represented in the pie chart below.
Although all the listed organizations were found to engage in some form of CSR activities, it was interesting to find that neither of the organizations engaged in similar CSR activities nor carried out the activities at the same level of funding. Indeed, some organizations operating in high-risk areas spent more than double the amount of money spent by organizations in low-risk areas in terms of funding. Financial institutions were the highest donors of CSR activities, with some spending over $1.5 million to fund CSR activities per year according to their financial disclosures. Organizations dealing with consumer products also spent more in terms of funding CSR activities. The organization that spent the least amount of money to fund CSR activities had to part with over $0.25 million per year.
When it comes to employee issues, most managers agreed to the fact that CSR activities in their respective organizations were purely voluntary, and no employee regardless of status or level of payment could be coerced to get involved in CSR against his or her wish. However, nearly two-thirds of the managers admitted to using the level of CSR engagement to informally rank employees individual performance.
Over 80% of the managers agreed that CSR has the capacity to attract, retain, and motivate employees in their work environment. Also, another 95% revealed that their organizations had actively undertaken CSR activities directly aimed at facilitating employee well being while working in the organizations. Others reported that their organizations were in the process of setting up such CSR activities that aimed at benefiting the employees.
Although the CSR activities aimed at attracting employees were different across the industry groups, the most mentioned ones included workplace health and safety, performance-based reward system, open communication channels and employee feedback, and Training and career development. All managers agreed to the fact that the level of employee satisfaction is directly related to the performance and productivity of the organization. The figure below shows some of the CSR procedures undertaken to attract employees across the industry groups.
About 66.2% of all the managers held a deep conviction that their CSR activities were directly related to the organizational vision and mission. To achieve this mission, 82% of the managers felt that employees needed to be fully involved in the CSR programs. In addition, around 80% of the managers felt the predominant Buddhist religion significantly influenced the direction taken by the organization’s CSR programs since religion was a way of life in Thailand. In this perspective, some organizations dealing with consumer products found it hard to come up with CSR strategies aimed at promoting their products to the general public.
56% of the supervisors were male and 44% female. Supervisors spend most of their time with employees, and so they have a better understanding of what really motivates workers to give more to the organization. Supervisors are in a better position to understand the reasons that may increase employee absenteeism and turnover than their managers. Their inclusion in the survey was therefore critical. All the supervisors were in agreement that some CSR programs offered in their respective organizations acted as incentives to retain and motivate talented employees.
Over two-thirds of the supervisors responded positively to the deduction that CSR programs encouraged members of staff to align their individual performances with organizational objectives. Supervisors were of the view that comprehensive CSR strategies assisted organizations to achieve increased market share and value besides assisting in human resource management. Furthermore, all supervisors believed the CSR programs improved the organization’s reputation and customer satisfaction, positively impacting the sales volumes in the long run.
Majority of the supervisors included in the survey were of the view that many employees were adequately aware of the CSR programs practiced in their respective organizations. According to the findings, employees working in the financial, industries, and service sectors were more aware of CSR programs that existed at their places of work than others from the other sectors. In the same vein, employees in the financial and service sectors exhibited high engagement to CSR activities than their peers in other sectors.
However, low ranking employees were more averse to utilize the strategies for their own benefit than high salaried employees. According to the supervisors, employees were keener on CSR practices that touched on their human rights such as equal employment opportunities and fair wages. CSR activities that improved organizational efficiency such as open communication channels also received considerable attention from the employees. The figure below attempts to depict employee knowledge towards CSR practices across the industry groups.
Interestingly, over 40% of the supervisors who took part in the study felt that the management failed to implement the CSR programs as vehemently spelt out in the mission statements. Inadequate funds and religious issues were cited as the two major factors why some organizations could not effectively implement their CSR policies. According to the supervisors, this worked against the laid down organizational objectives, and was to blame for high turnover in this particular organizations as disgruntled employees opted to terminate their contracts. All the managers were in agreement that employees were bound to put more effort into their work and align themselves more to the organizational objectives if they are satisfied with the CSR policies.
Employees are the lifeline of an organization as its profitability and loss sorely depend on the input made by this subtype of stakeholders. In this perspective, attracting the best talents in human resources is a nightmare for many assiduous and contentious managers. It is the duty of every manager to implement strategies that can assist to attract the best talents into the organization. As the study found out, CSR is just one of the very many strategies that managers need to arm themselves with if they are to succeed in this difficult task.
The study reinforced the fact that employee knowledge on CSR is fundamentally dependent on the level of education and status in employment. Highly educated employees working in senior positions exhibited exemplary knowledge on CSR activities initiated by their employers than those with low education. A sizeable proportion of employees (58.8%) did consider the performance and reputation of the organization before making up their mind as to whether they should join the company.
Of the respondents who made this decision, over 80% were highly educated employees with great aspirations for the future. In addition, respondents said they had at one time resigned from previously held positions due to poor working conditions and lack of promotions. The rest of the information is contained in the figure below.
Most of the employees who took part in the survey were of the opinion that continuous education, training opportunities, safe working environment, and adequate health policies were important components of CSR that facilitates them to work more efficiently in their respective positions. An overwhelming number of the employees also agreed to the fact that effective CSR strategies are fundamental to enable the organization maintain its reputation and credibility in the eyes of other stakeholders.
Apart from internal CSR activities, a number of employees were in agreement that external CSR strategies such as educational projects for local communities and environmental protection also assisted the organization to mould a good reputation in addition to maintaining credibility. To the employees, this served to attract more talent into the organization.
When employees were asked about their preferences on the CSR practice, majority (63%) sided with internal aspects of CSR more than the external aspects. Employees were more concerned about the openness of communication channels, methodologies of resolving work-related disputes and lodging complaints, performance-based reward system, respect of labor laws and human rights, fair compensation, and safe working conditions. For those who associated themselves with external aspects, environmental conservation and assisting the local community topped the list.
Discussion of Study propositions
This study had been initiated to evaluate the perception of employees towards CSR programs in Thai listed companies. According to the statement of results from the managers, supervisors, and employees surveyed in the study, the fact that employee engagement is strongly correlated to CSR is undeniable. The study findings have presented a strong case in regards to the interrelationship between employee attraction, retention, and motivation on one hand and the CSR practices initiated by an organization on the other. Four propositions had been formulated for this study. Below, a critical analyses of the findings based on the study hypothesis is presented
Correlation between CSR and recruitment, retention and motivation
The responses achieved from the managers, supervisors, and employees were more than what was needed to prove the above hypothesis. The managers ostensibly indicated that the rationale behind establishing CSR strategies is to assist organizations in corporate strategy and human resource management, among many other factors. Majority of the employees underscored the fact that they had at one time left their positions of employment due to lack of or abuse of internal CSR practices by the management.
Also, majority of the employees said they must consider what the organization is offering in terms of CSR before making a decision on whether to join the organization or not. On the same note, majority of the employees who took part in this particular study opined that continuous education, training opportunities, safe working environment, and adequate health policies were important components of CSR that facilitated them to work more efficiently in their respective positions. A 2002 study conducted in the UK revealed that over 82% of UK professionals would never engage themselves with a company whose values they did not believe in.
According to the UK study results, 73% of the professionals said they usually made social and ethical considerations before accepting any job posting (Draper 2002). Multiple independent surveys conducted in the US on corporate philanthropy a few years ago revealed that workers expect organizations to enthusiastically assist in building a better society (Rubenstein 2004). In this perspective, the first hypothesis was sufficiently proved.
Internal versus External CSR aspects
The second hypothesis, which was concerned with knowing if potential employees concentrated more on internal CSR aspects than external CSR, was also proved beyond any reasonable doubt. According to responses attained from the managers, employees, and supervisors, the two aspects were vital in attracting talented members of staff as well as facilitating the reputation and credibility of the organization. According to Jamali & Sidani (2008), both external and internal CSR aspects permit individual companies to manage risk and enhance their corporate reputation. According to Meehan, Meehan, & Richards (2006), ethical concern and behaviour has become a fundamental requirement in the increasingly intertwined corporate world of modern times. It is beyond doubt that ethical corporate behaviour reflects positively on the reputation and long-term accomplishment of a business organization (Sims 2003).
Majority of the employees considered internal CSR aspects more than external aspects when deciding whether to join an organization or not. This exemplifies the importance of CSR in attracting the best talents into an organization. Still, many employees attested the fact that internal CSR aspects such as open communication channels, reward systems, safe working conditions, and fair compensation made them to develop trust in addition to enhancing their alignment to organizational goals and objectives. This view was also shared by managers and supervisors.
According to Draper (2002), the direct correlation between an organization’s level of CSR and employee satisfaction and retention rate is more likely to be articulated by the influence of various components of CSR that expressly impacts on employees at the workplace. These components include labour practices, human rights at the workplace, training opportunities, and employment relations (Kotler & Lee 2005).
In the same vein, the indirect association between CSR practice and employee retention and satisfaction rate can be rightly acknowledged through the influence of such factors as the corporation’s reputation, public image, and norms, to the degree to which they are produced and reinforced by the organization’s CSR performance (Albinger &Freeman 2000). In this perspective, the second hypothesis was proved.
High-end employees and CSR Policy
The third hypothesis assumed that high-end employees scrutinize CSR policies more than low-end employees. It is a well known fact that high-end employees also posses higher level of education, and education enhances skills. It is therefore not coincidental that high-end employees also exhibit the best talents. In this respective, the third hypothesis was also proved as majority of the high-end employees took considerable amount of time to go through the CSR practices of any given organization before making a decision on whether to join the organization or not. This was minimally exhibited by the low-end employees.
A study conducted by Albinger & Freeman (2000) revealed that high-end prospective employees are much more likely to consider and evaluate the performance of CSR in prospective organizations than low-end employees
The above observation can be fundamentally utilized by human resource personnel to bring the best employees on board. According to Maignon & Ferrell (2001), workers with higher income, education, and cognitive moral development are also readily supportive of the CSR practice. According to Strandberg (2009), CSR is indeed profitable to the human resource capital of organizations practicing it. The positive attitudes exhibited by prospective employees when it comers to evaluating the company’s image and reputation are fundamentally critical in ensuring that organizations get the right mix of skills and professionals for future business expansion (Banerjee 2007). Consequently, it is beyond doubt that CSR can effectively be used to improve the quality of human resources in addition to reducing recruitment costs and improving employee retention levels.
CSR and Performance
The final study hypothesis assumed that companies with comprehensive CSR strategies performed well due to the positive evaluation they received from society. Again, the responses received from managers, supervisors, and employees of the selected Thai listed companies confirmed this hypothesis to be true. Financial disclosures obtained from the internet revealed that organizations which had incorporated CSR in their mission statements were performing extemporary well in the financial field compared with their peers. The managers and supervisors were of the opinion that effective CSR strategies assisted in attracting the best human resource talents into the organization in addition to motivating and retaining the already existing employees.
The performance of organizations may be enhanced by the mere fact that CSR enables potential employees to evaluate their self-identity against the organization’s own self identity as reflected in the CSR practice (Maignan & Ferrell 2001).
Similar identity matches between the employees and the organization have often resulted in formidable organizational bond and success. According to Hoskins (2005), the match of organizational values with those of current and prospective employees results in higher employee retention rate. This translates to profitability as the organization does not keep on wasting more resources to recruit more employees. Consequently, employees exhibiting the same organizational values as stressed out in the CSR programs are also more likely to express high levels of dedication to the company’s success and performance. This will definitely enhance organizational performance. In this respective, the last hypothesis was also sufficiently proved.
Conclusions and Recommendations
From the study findings, the fact that CSR activities has gained steam in Thailand can no longer be denied as majority of the organizations selected for the study had taken the initiative to integrate their core CSR activities to their vision and mission statements. The organizations under study referred to CSR using many diverse names such as corporate citizenship, ethical practices, and social investment. According to managers, CSR was mostly perceived to assist corporate strategy, social and environmental issues, stakeholders’ interests and employee concerns. This therefore means that there is a correlation between CSR and employee attraction, retention, and motivation.
In the same vein, the study revealed that neither of the organizations engaged in similar CSR activities nor carried out the activities at the same level of funding. Organizations operating in high-risk areas were spending much more money in CSR than those in low-risk areas.
The study revealed that CSR was purely voluntary and no employee could be coerced to undertake it against his or her wish. However, engaging in CSR was viewed as beneficial since most of the managers informally ranked their employees performance on the basis of CSR engagement. Managers reported that their organizations had undertaken proactive CSR measures to attract the best human resource talent. Some of the most mentioned strategies include workplace health and safety, performance-based reward system, open communication channels and employee feedback, and training and career development.
The study also revealed that employee satisfaction is positively correlated to the performance and productivity of an organization. Indeed, it was revealed that CSR programs encouraged members of staff to align their individual performances with organizational objectives, vision and mission. Indeed, many felt that employees had to be directly incorporated in the CSR programs if the mission statements and organizational vision was to be achieved. It is prudent to note that religion orientation was found to influence the type of CSR programs developed and initiated by organizations.
The study also brought to the fore the fact that CSR programs improved the organization’s reputation and customer satisfaction, positively impacting the sales volumes in the long run. Employees had adequate knowledge of the CSR programs practiced by their employers. However, low ranking employees were more averse to utilize the strategies for their own benefit than high salaried employees. It was noted that some organizations failed to implement their CSR policies as spelt out in their mission statements mostly due to inadequate funds and religious issues. In addition, the study revealed that employee knowledge on CSR is fundamentally dependent on the level of education and status in employment. It was also revealed that many employees do consider the performance and reputation of the organization before making the decision to join.
An interesting inference is that some of the surveyed employees had at one time resigned from previously held positions due to poor working conditions and lack of promotions. Still, a significant number of employees agreed to the fact that effective CSR strategies are fundamental to enable the organization maintain its reputation and credibility in the eyes of its stakeholders.
The study findings clearly reveal that CSR has dramatically grown in Thailand. However, many organizations still maintain the traditional view of CSR, that is, it can only be used to enhance corporate strategy and assist in social and environmental issues. To remedy this scenario, the government in conjunction with other interested stakeholders should embark on conducting workshops and sensitization programs on the importance of CSR and employee sustainability. These workshops should mostly target managerial-level staff.
Secondly, it is imperative to mention that most of the organizations have undertaken CSR practices meant to attract the best human resource talents. However, there seems to be a disengagement of the CSR activities available on one hand and employees level of knowledge towards such CSR activities on the other. Majority of the employees, especially on the low-end scale, lacks adequate knowledge to comprehend that such CSR procedures exist and are meant to benefit them. As such, they end up been mistreated and humiliated at their places of work. To remedy this scenario, the government and the organizations involved must undertake intensive sensitization programs targeting low-end employees to make them understand their rights and freedoms as spelt out in the CSR programs.
The fact that CSR provides immense opportunities for both the organization and the employees is undeniable. However, study findings reveal that some organizations, especially those dealing with consumer products are unable to undertake their CSR programs due to religious issues. While the role of religion in improving the social welfare of the Thais can never be disputed, stakeholders should come up with strategies aimed at ensuring that religious indoctrination does not unnecessarily affect organizations’ ability to initiate their own CSR programs.
Further Research Area
Further research is needed to come up with extensive knowledge that will enable organizations to delineate CSR activities from religious issues, or come up with ways through which both strategies will exist harmoniously without one setting the precedence on the other. Many Thai organizations have exercised caution when dealing with CSR issues due to religious indoctrination. What the management of such organizations do not comprehend is that they may be losing out on the best human resource talents due their indifference of introducing CSR. As such, future research should aim at assisting these organizations to shed such orientations while still retaining their religious philosophies.
It is beyond doubt that organizations must therefore introduce CSR strategies that will motivate and retain employees in addition to offering them a fair treatment. This can be achieved by introducing employee liaison groups, staff representatives, and employee focus groups. To attract, retain, and motivate the best employees, organizations must develop CSR strategies that directly relates to employees such as working hours, employment conditions, flexibility, human rights, training opportunities, and remuneration. CSR activities relating to fair wages, health and education benefits, clean and secure working environment, childcare facilities, and job sharing must also be considered as they have the potential to occasion direct benefits for the organization through enhanced employee morale, motivation and performance while reducing cases of employee absenteeism and turnover.
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