EFFECT OF CORPORATE SOCIAL RESPONSIBILITY ON EMPLOYEE ENGAGEMENT: MEDIATING ROLE OF COMPASSION AND MEANINGFULNESS

Abstract

The world of business today faces unprecedented challenges. The challenges arise due to fragmented markets, turbulences in the form of pandemics, rising societal expectations from businesses and the challenge to retain the best employees. Although, firms can focus on the traditional objective of profits however, turning a blind eye to the new challenges means at some point in future, they face the ignominy of becoming irrelevant and losing to the competitors. One of the recent trends thus, has been to look beyond the traditional boundaries of workplace and design initiatives that help the firms gain social presence in the surrounding community (Shukla et al., 2022). In other words, businesses recognize their responsibility of being sensitive to the social problems modern societies face and in the process of overcoming these problems, they can gain social power, the knowledge to create new products and allow their employees a chance to look beyond a paycheck and a big work desk. One such intervention is corporate social responsibility or CSR (defined as “corporate behaviors that aim to affect stakeholders positively and that go beyond its economic interests” Turker, 2009, p. 413). Over the years, CSR has seen a great interest among researchers (Nazir and Islam, 2020). And the reasons for this attention are clear. CSR has been found to enhance macro-level behaviors such as customer loyalty (Martinez et al., 2014), customer word-of-mouth (Jeon et al., 2020); brand performance (Ahn, 2019); and even firm reputation (Franco et al., 2019). Unfortunately, the positive outcomes of CSR and macro-level or institutional outcomes such as reputation has not meant that the micro-level outcomes of CSR are also well researched (Hur et al., 2018; Chaudhary and Akhouri, 2019). The implication of this oversight is that very less is known about the real executors of CSR-the employee (Supanti and Butcher, 2019). It’s the employees who ultimately design and execute CSR initiatives for all stakeholders. Hence, a poor understanding of how and why CSR influences employees means, an important stakeholder of CSR initiatives is sidelined. The risks of sidelining employees means the long-term failure of CSR initiatives and disengaging employees from the organization. Moreover, the issue of sidelining employees and the lack of knowledge concerning the relationship between CSR and employees is of primary importance in sectors such as the hospitality sector. The reason being that hospitality sector depends hugely on employee service and positive productive behaviors (Kang et al., 2020; Kim et al., 2017). In other words, hospitality sector depends on employees because employees are the internal stakeholders of the organization and at the end of the day, it’s the employees who interact with customers and are entirely responsible for the kind of service or CSR initiatives they deliver to a variety of stakeholders. Also, the luxury hospitality sector is rather infamous for disengaged employees and poor work culture (Appiah, 2019). Thus, given the priority of employee productive behaviors in the hospitality industry as well as the academic quest to focus on the challenging proposition of actually understanding how to engage employees, this study examines whether and how CSR related activities can engage employees in the hospitality industry. Specifically, the study proposes a conceptual model comprising of individual-level constructs viz. meaningfulness, compassion, and employee engagement. In order to justify and explain the impact of the CSR on the proposed constructs, the sensemaking theory was adopted. The study proceeded with an extensive literature review on CSR and employee engagement followed by a quantitative cross sectional survey research design in order to empirically test the proposed model. Survey data for empirical testing was collected from employees of ten luxury hotels in Delhi. In total, data from 350 full-time employees working for more than a year in 4 and 5-star luxury hotels was collected. The testing of the various hypothesis was conducted through structural equation modelling (SEM). The results of the hypothesis testing revealed that CSR has a positive effect on employee engagement, meaningfulness, and compassion. Also, the results show that the effect of CSR on employee engagement is partially mediated by meaningfulness and compassion. Thus, all the proposed hypothesis were significant and supported. The study makes some key contributions to literature. The study expands the academic understanding of how luxury hotels can achieve competitive advantage by utilizing existing corporate socially responsible initiatives to engage their internal stakeholders i.e., employees in such a manner that employees find the work they do meaningful; feel compassionate and are engaged with their workplaces. Also, the proposed conceptual model is in line with a nascent and growing number of studies which suggest that amongst the various employee behavioral outcomes that are influenced by CSR related activities, strategic focus needs to be on work meaningfulness, compassion, and employee engagement (Hur et al., 2018; Rupp et al., 2018). Lastly, the study has important managerial implications which suggest that investing in CSR could be a great asset in rewarding employees non-monetarily, since it allows employees to experience the joy of making a difference to their communities and the planet as a whole.