WORKPLACE / JAN. 14, 2015
version 4, draft 4

Why You're More Productive When Your Employer Is Philanthropic

I’ve written about before that when employees volunteer for good causes they tend to come back to work more engaged and productive. Interestingly, however, the same seems to apply when the philanthropy is undertaken by the employer themselves.

At least that’s the finding of a recent study, which looked at any connections between corporate philanthropy and employee productivity. The study saw employees from 261 large American companies surveyed to discover their philanthropic habits over the past year. It emerged that they were quite a charitable lot, with the companies giving a collective $25 billion to good causes, or around 1% of their pre-tax profits.

So how does this affect our productivity at work?  To find out, the researchers asked participants to complete a simple task that they could do from their computer at home. They were given complete freedom over how and when they worked, with no real supervision. Their compensation was a fixed salary together with a bonus based upon the amount of work they did. This pay was manipulated by the researchers to see how big an impact pay had on output.

For some of the participants, a philanthropic element was added, with an option for a donation to be made to a charity of the participants choosing by the organisers. This charitable donation was completely independent of the salary received for doing the work. In some instances, the donation was a set amount, whereas in others it would be related to the work each participant performed. A third option was to split the performance related bonus between themselves and the charity.

Why charity equals performance

Perhaps it should come as no surprise that a higher bonus resulted in greater productivity. What is perhaps more surprising however was that the charitable donation did likewise. The results showed that when participants were offered the donation, their performance rose by 13 percent. What’s more, this rose regardless of it being linked to their performance. Amazingly, the benefit soared to 30 percent for the participants who were initially the least productive.

Indeed, the results showed that we are generally a pretty charitable bunch, for when participants were given the choice to donate a chunk of their own bonus to charity, over half decided to do so. This was far and away the most effective means of boosting performance, and was even more effective than the straight out bonus.

How doing good helps you to do good

The researchers suggest that this boost is largely achieved because participants feel more engaged to a ’good’ employer, and therefore are more likely to commit high effort levels to them. It all suggests that doing good (as an organisation) is a great, and relatively cheap, way to improve the performance of employees.

How would you feel if such a policy were implemented in your own workplace? Would you feel more engaged at work and put in extra effort as a result?  Let me know in the comments below.


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