CSR FOR EMPLOYEES: A PROMISING DYNAMIC FOR COMPANIES TO IMPROVE MOTIVATION, PERFORMANCE AND PROFITABILITY
EDITORIAL FROM PASCAL MARTIN, EMBA PARTICIPANT
As EMBA student at Kedge B.S., I chose the major Resources management because I am quite sensitive to environmental and social issues and I am certain they are determinant for the future of business. So, I was all the more surprised to discover that CSR applied to employees seems to be quite underexplored, despite employees are one of the most crucial stakeholders for corporations. As said our Professor Ante Glavas, “this is one of the biggest areas for impact”, given that “only 13% of employees worldwide are engaged at work”.
It was also exciting to think about this potential source of performance trough improvement of employees’ motivation and commitment. My reflection led me to several leverages which seem quite powerful but also somewhat disruptive and disturbing for traditional corporate management and administration.
The first leverage I thought about is governance: in most companies, employees and their representatives don’t really have the possibility to be part of the decision making, excepted for some non strategic questions. In the best case, they can give their opinion during the board meeting but it is just consultative. Nevertheless, associating employees to the decision making seems an efficient way to increase their engagement. I was recently amazed by a documentary about a French middle size company producing flexible, which had some economic troubles. The founder of the company decided to let his employees completely free to reorganize the company, even for the wages which is also a quite “touchy” issue... The result was a complete transformation of the company, a huge improvement of employees’ motivation which led to much higher performance and a sharp improvement of customers’ satisfaction. In a few months, growth and profits were back. Of course, this example is not transposable to all situations and companies. But it shows that it is possible to improve drastically a business by associating employees to strategic decision.
On this question of governance, I also red a very sensible article of Pierre-Yves Gomez (professor at EMLyon Business School) about how to reconcile society and business world, edited by the French media “Le Figaro” in October 2014. For him, one often forgets that wealth is not produced by companies themselves but by human labor. This leads some managers to pay too much attention to processes, systems and controls, without taking care of the reality of the work and the men and women doing it. He thinks this is one of the main reasons for the problems of performance, initiatives and confidence that many companies face today. He recommends to put back the “real life” in the core of the management, namely the human experience of the work as a fulfillment and a community belonging feeling.
The second leverage I thought about is related to the share of wealth produced. In addition to the wages, employees could (should?) logically benefit of a part of the profit made by the company in a proportional way regarding their contribution. This question was also mentioned by a former French president who proposed to share profits in three equal parts between shareholders, employees and the company (for cash and future investments). At this time, this proposition was criticized, namely because applying it to all companies without distinction would be irrelevant and also maybe dangerous in some cases. Nevertheless, the idea seems quite sensible even for shareholders’ and companies’ interest: if employees receive directly the fruits of their performance, it should logically encourage them to be more committed and more efficient, and so increase profit for all stakeholders. Some companies lead the way, as GM which decided to pay up to $ 9000 to each of its 212 000 employees for the good results reached in 2014.
Through these two examples, CSR for employees makes me think about a kind of “new world” to explore. This world is not really unknown, but it embraces a large scope of unexplored routes, leading to sources of potential wealth and well-being for stakeholders. Reaching these sources means radical changes in the way we see and we do things in corporations.
