Abstract
Socially responsible companies should provide fair wages and maintain reasonable internal wage gaps as part of a commitment to workers as primary stakeholders of the organization. Our research seeks to clarify the influence of the Corporate Social Responsibility (CSR) system on the salary level of unskilled workers and the magnitude of internal salary gaps between the highest and lowest levels of the organization. We used a sample of 815 companies that are representative of the Chilean business ecosystem and developed a linear regression model with endogenous treatment. Our results show that the declaration of a CSR program positively influences the wage level of unskilled workers but increases the magnitude of internal organizational wage gaps. These findings suggest a partial adherence of companies declaring CSR in terms of commitment to their employees.
Highlights
The literature on Corporate Social Responsibility (CSR) is extensive and has been widely analyzed in social, environmental, and economic dimensions (Latapí Agudelo et al, 2019)
Our results show that the declaration of a CSR system positively affects the wage level of unskilled workers but increases the magnitude of internal wage gaps within the firm
We found that CSR policy positively affects the wage level of workers at the bottom of the organizational structure, socially responsible Chilean companies are oriented toward satisfying their workers in terms of salary conditions
Summary
The literature on Corporate Social Responsibility (CSR) is extensive and has been widely analyzed in social, environmental, and economic dimensions (Latapí Agudelo et al, 2019). There is little research on the influence of CSR on the structuring of salary policies and internal salary distribution in the company In this sense, a socially responsible company must pay fair wages to its employees and maintain an internal wage distribution with reasonable wage gaps (Barroso Tanoira, 2008; Bennett, 2018; Rodrigo & Arenas, 2008; Tangngisalu et al, 2020). One with the dependent variable representing the wage level of unskilled workers and the other with the internal wage gap as the dependent variable In both cases, we used the formal declaration of a CSR program as a selection variable (endogenous treatment). Our results show that the declaration of a CSR system positively affects the wage level of unskilled workers but increases the magnitude of internal wage gaps within the firm. We conclude by presenting the limitations to the scope of the study and discuss future research opportunities
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