Impact Of CSR Activities On Employees Work With Special Reference To Indian Banking Industry

April 2019

Ms. Priyanka Kamble
PGDM Student
Dr. V N Bedekar Institute of Management Studies
priyankakamblemoon@gmail.com

Mr. Jaideep Joshi
PGDM Student
Dr. V N Bedekar Institute of Management Studies
jdjoshi7979@gmail.com

Prof Kanchan Akshay
Assistant Professor
Dr. V N Bedekar Institute of Management Studies
khinduja87@gmail.com

Abstract : Corporate social responsibility is a notion where organizations take the responsibility of their activities for the society which includes their customers, employees, shareholders, social groups and environment at large. This commitment of the organizations towards its society is taken to improve their quality of life and make it better. CSR is an accepted and a persistent part of any organization. Employees are actively involved in the activities which not only serves the society but also give them a feeling of belongingness towards their workplace. This paper would examine the perception of employees towards the activities performed by their organization. It would also help the organizations know on what kind of leadership is required and how they can inculcate this sensitivity of giving in their employees through the culture of the organizations.

Keywords: Organization culture, Employee Perception, CSR  

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Credits : Freepik.com

Introduction

Corporate social responsibility (CSR) has gained more interest in the past decade, however CSR is not a static concept—it is a moving and an evolving goal. According to Kennedy, there is no concrete definition of CSR; however, it is not a replacement for the governmental role and responsibility in meeting challenges of sustainable development. Social Responsibility of business refers to what a business does over and above the statutory requirement for the benefit of the society. The word “responsibility” emphasizes that the business has some ethical obligations towards the society. The concept of Corporate Social Responsibility (CSR) has wider scope.

According to World Business Council for Sustainable Development (WBCSD), 1999 “ Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the work force and their families as well as of the local community and society at large.”

Corporate Social Responsibility is a notion whereby financial institutions not only consider their profitability and growth but also the interests of society and the environment by taking responsibility for the impact of their activities on stakeholders, employees, shareholders, customers, suppliers and civil society represented by NGOs. Besides the private sector, the Government is also ensuring that the public sector companies participate actively in CSR initiatives. The Ministry of Corporate Affairs (MCA) under Section 135 and Schedule VII of the Companies Act, 2013, has notified that organizations with at least 5 crore net profit or Rs 1000 crore turnover or Rs 500 crore net worth will have to spend 2% of their 3 years annual net profit on conducting CSR activities. Nowadays management concerns managing financial and nonfinancial results with awareness of risk and maintenance of transparency. Accordingly, Corporate Social Responsibility (CSR) has had meet significance of corporate budgetary execution.

The concept of Corporate Social Responsibility is not a new but its focal point changes with the changing requirements of business and altering social needs. CSR activity is getting in more demand in today’s dynamic world. CSR helps to built and develop good relations within employees and all other stakeholders of the organization.

The CSR in Indian Banking Sector is meant to address the financial inclusion, provide financial services to the unbanked or unexploited areas of the country, the socio-economic development of the country by focusing on the activities like poverty eradication, health and medical care, rural area development, self employment training and financial literacy trainings, infrastructure development, education, environmental protection and many more.

This research paper tries to focus on the CSR activities which are performed by the bank and its implications on culture of the organization thus affecting employees. An intensive review of literature is carried out which have shown strong relation between CSR activities and employee behaviour at work. Thus through this paper we would extend the research to find out the perception of employees about the CSR activities carried by their bank and also if it has any impact on the culture of the organization.

Literature Review

The study of CSR in Banking industry has been a sensitive issue in terms of understanding the role of banks in developing relationship with its stake holders. Stakeholders are directly involved in day to day business activities in Banking processes. The internal stakeholders such as employees have always been an important component to understand the overall contribution of banks into community development. Hence this study is carried out to focus on those aspects of Banking CSR practices and work culture.

David Saul (2012) analysed that CSR needs to be embedded at the heart of a company's ethos, rather than viewed as a mere add-on. Instead, it should clearly state the way the company operates across its internal and external customers and should truly be empowered to get involved in relevant initiatives. This might involve giving time to staff apart from their daily routine, on top of their usual holiday allowances, so that they can support a chosen charity or good cause. Ensuring a good and comprehensive CSR policy followed by a business can not only enable companies to percolate or filter itself from other business firms and make a genuine difference to society, but also deliver a tangible benefit to the firm.

Li Sun examined that employees in socially responsible companies are excellent in productive performance compared to their peers than in less socially responsible companies. It is also revealed that socially responsible companies have or incur higher labour cost.

As Bob Stiller, founder of Green Mountain Coffee Roasters learned that people are motivated and more willing to go the extra mile to make the company successful when there’s a higher good cause associated with it. It’s no longer just a job. Work becomes meaningful and this makes company more competitive.

Olivia Vande Griek (2017) published that employees think if their employer is “doing the right thing,” it seems they are more likely to “do the right thing” themselves. When organizations implement best practices in CSR, employees are more likely to engage in cooperative behaviours towards their co-workers and the organization, like going out of their way to help their teammate. Similarly, CSR promotes higher-quality and closer relationships between employees.

Glavas Ante (2009) examined that employees who perceive higher levels of CSR will report higher levels of engagement, high-quality connections and creative involvement.  He noticed that social responsibility can be more important than financial success in determining how much employees identify with their workplace. Feeling positively about their organization’s CSR initiative has been shown to increase employee’s retention with their current employer, and their overall commitment to the organization. This mostly leads to positive attitudes, including how much employees like their organization, make personal sacrifices for the organization, and see their own future and success tied to the organization’s success.

Rosso et al. (2010) proposed CSR as a pathway through which employees can find meaning because they feel that they are contributing to the good cause. Moreover, Grant et al. (2008) found that the contribution to the good cause makes an employee feel good about themselves, thus improving their own self-concept resulting in greater organizational identification. According to Grant it shows ones real self or authencity is an antecedent to engagement

CSR is also relevant for a study on engaging the whole self because it is tied to one’s self-concept—as Korschun et al. (2014) explain, CSR “reflects a core belief rather than an attitude about a particular social issue.

As it can be noticed from the exhaustive review undertaken, a lot of work is done on employee contribution & CSR and how can CSR activity result in increasing the profitability of the organization but every conclusion ends to an argument & question like would there be a positive impact of CSR activities on employee work & employee performance? Or will the culture of the organization change the perception of employees about CSR activities. This research will help to explore the beneficial impact of CSR activities on employee performance. It will provide a clear picture of how future CSR activities to be streamlined to achieve better productivity and positive motivation among employees.

Research Methodology

Objectives of the study

• To study the perception of employees towards the CSR activities performed by the bank.


• To study the impact of CSR activities on the culture of the organisation.

Hypotheses

• H00: Employees perceive a positive image about CSR activities performed by a bank
• H01: Employees do not perceive a positive image about CSR activities performed by a bank
• H02: CSR activities form a strong part of organisation culture
• H22: CSR activities do not form a strong part of organisation culture

Data Collection: Primary Research

Sampling Plan: The sample for survey would be taken on the following basis.

Sample Frame:Name, Age, Organization Name (Bank)

Sample Unit: Bankers

Statistical Tool:IBM SPSS Statistics

Sampling Method:Simple Random Sampling (SRS)

Sample Size: 52 respondents

Data Analysis & Interpretation

Statistical Hypothesis Methods Used:

Sample Independent T test

The Independent Samples t Test compares the means of two independent groups in order to determine whether there is statistical evidence that the associated population means are significantly different. The Independent Samples t Test is a parametric test.

The Independent Samples t Test is commonly used to test the following:

• Statistical differences between the means of two groups
• Statistical differences between the means of two interventions
• Statistical differences between the means of two change scores

Data

Interpretation

Here significant value is 0.214 and 0.198 which is greater than 0.05 therefore the Null Hypothesis is accepted, which means overall satisfaction is independent on gender.

(Ho: µ1=µ2 i.e. Overall Satisfaction is almost same on gender.)

ANOVA Test of Hypothesis

ANOVA is widely used by researchers to investigate the underlying relationship between a dependent variable and various independent variables.

It is used when there are multiple sample. It is statistical tool which is used to analyses the variations among the data and calculate the inequality among the population mean.

It helps to examine ‘n’ number of factors influencing the dependent variables.

Data

Here significant value is 0.214 which is greater than 0.05 therefore there is an acceptance of Null Hypothesis

That means Perception towards CSR activities performed by Banks is independent on Gender, and mostly the employees are satisfied with the CSR.

Therefore, Objective 1 is satisfied.

(Ho: µ1=µ2 i.e. CSR activities performed by Banks is mostly same on Gender)

Data

Interpretation

Here significant value is 0.911 which is much greater than 0.05 therefore the Null Hypothesis is accepted which means CSR has a Positive Impact on culture of organization, and mostly the employees of the bank are actively involved in the activities.

(Ho: µ1=µ2 i.e. CSR activities carried out by Bank is mostly same on Culture of Organization by Gender)

Findings of the study

• It is found that more than 70% of bank employees feel that their organizations are more sensitized on social commitments and try to create a friendly environment by indulging themselves in CSR activities.


• It also seems that more than 50% of bank employees feel that CSR are more of responsibility role. They feel belongingness as well as caring approach towards society than a burden.


• 67% of employees feel that culture helps in promoting social awareness in the organization


• More than 50% of bank employees feel that CSR activities are part and parcel of their work routine than a disturbance.


• It is also found that more than 44% of bank employees feel that it is complicated to implement radical innovations formed by the senior authorities of banking industry.


• More than 50% of bank employees feel satisfied by their CSR activities performed by their bank.

Recommendations

• CSR activities have become an integral part of organizations today and boost the employees; hence organizations can encourage more employee participation and engagement through these activities.


• Bank should have good working environment with good work culture which inculcates the feeling of giving and will also motivate other employees to participate in CSR activities. It is also seen that if the employer work's for a good cause then the employees get influenced by their employers.


• Bank should have systematic approach while scheduling CSR activities, so that employees will enjoy their work routine along with CSR activities.


• Leadership plays an important role in forming the culture of the workplace hence the top management should be in constant contact with the employees so that the root cause may be solved while implementing the CSR activity.

References

• Corporate Social Responsibility By Andrew Crane , Dirk Matten , Laura Spence


• Corporate Social Responsibility By C . V. Baxi


• The Times Of India ,Article Indian Banks Beyond CSR, June 16,2008


• Bauer, R., K. Koedijk and R. Otten: 2005, ‹International Evidence on Ethical Mutual Fund Performance and Investment Style’, Journal of Banking and Finance29, 1751–1767. doi: 10.1016/j.jbankfin.2004.06.035.CrossRefGoogle Scholar


• Bello, Z. Y.: 2005, ‹Socially Responsible Investing and Portfolio Diversification’, Journal of Financial Research28, 41–57.doi: 10.1111/j.1475-6803.2005.00113.x.CrossRefGoogle Scholar


• Boot, A. W. A. and A. V. Thakor: 1997, ‹Financial System Architecture’, Review of Financial Studies10, 693–733. doi: 10.1093/rfs/10.3.693.CrossRefGoogle Scholar


• Denis, D. J.: 2004, ‹Entrepreneurial Finance: An Overview of the Issues and Evidence’, Journal of Corporate Finance10, 301–326. doi: 10.1016/S0929-1199(03)00059-2.CrossRefGoogle Scholar


• Greenbaum, S. I. and A. V. Thakor: 2007, Contemporary Financial Intermediation, 2nd Edition (Elsevier, Amsterdam).Google Scholar


• Mahabir Narwal, (2007) "CSR Initiatives of Indian Banking Industry", Social Responsibility Journal, Vol. 3 Iss: 4, pp.49 – 60


• Research paper: Employee engagement - how human capital management can drive business returns Solange Le Jeune, ESG Analyst 25 Oct 2012


• The Impact of Employee Engagement previously published in the Kenexa Research Institute’s 2008 Work Trends Annual Report.

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