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New Study Finds Employee-Directed Corporate Philanthropy Boosts Employee Happiness and Performance

Jan 28, 2015

A recent study by two professors at the University of Southampton in the UK found a strong positive correlation between employee-directed corporate philanthropy and workplace productivity. While direct financial incentives certainly boost performance (such as bonuses tied to productivity), the study found a significant increase in productivity when corporations offered to make donations to charities and causes picked by employees. And where the dollar-amount of charitable contributions matched direct financial incentives, increases in worker productivity were almost indistinguishable… confirming, again, that corporate philanthropy results in a direct and significant boost to worker productivity.

Philanthropy Boosts Workplace Performance

The study – titled “Corporate Philanthropy and Productivity: Evidence from an Online Real Effort Experiment” – was performed by professors Mirco Tonin and Michael Vlassopoulos. In their study, the authors offered one group of participants a fixed wage and a bonus tied to the amount of work done within a specified timeframe; and offered another group a fixed wage and a donation on the worker’s behalf to a charity of his choosing. In addition, they varied the dollar amount of charitable giving from fixed to a variable amount tied to worker output.

Their findings showed a bump-up in worker productivity when workers were offered a bonus – no surprise there! More importantly, they found comparable increases in productivity for participants that were given the donation option. Specifically, their study found a 13% average increase in performance when a charitable donation was offered, irrespective of whether the donation amount was fixed or tied to worker output. But, perhaps most meaningfully, they found a sharp 30% increase in performance amongst the least productive group of workers – suggesting that non-cash incentives can be way more meaningful for employee engagement than the routine incentives of a salaried job.

The study’s findings are consistent with other studies that show a definitive link between employee-directed corporate philanthropy and employee engagement and productivity, workplace pride and corporate profits. The study’s surprise finding – of a 30% performance boost amongst lowest productivity participants – is solid proof that employers should get creative with corporate philanthropy as a means of achieving strategic corporate goals while boosting employee engagement.

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