The Hidden Cost of Using CSR to Motivate Workers

Abstract

This paper experimentally investigates whether firms should use both prosocial incentives and monetary incentives to motivate workers. We conduct a real-effort experiment on a data entry job. It is found that prosocial incentives will likely reduce work quality. When worker’s compensation does not include prosocial incentives, making the compensation conditional on the quality of work performed greatly enhanced the work quality. However, when worker’s compensation includes prosocial incentive, making the compensation conditional on the work quality no longer improve work quality. This suggests that prosocial incentive induces some workers to work less professionally.