Corporate social performance (CSP) is increasingly viewed as an important business outcome by researchers, investors, and society as a whole. Furthermore, empirical research indicates that CSP is positively related to corporate financial performance. These considerations lead to the question of whether CEO pay is properly structured to provide incentive to the CEO to improve firm CSP. In a sample of 313 firms, the authors found that a short-term CEO pay focus was negatively related to CSP, whereas a long-term focus was positively related to CSP. Implications of these results for future research and CEO pay design are presented.

Research to date has identified CEO pay structure as an important factor in the environmental and social performance of the organization but has not considered how pay may influence these sustainability efforts at the middle‐management level. We address this void with an experimental manipulation of direct and indirect pay incentives for an environmental sustainability project and production cost savings project. Counter to our predictions, investment in sustainability versus cost savings is significantly lower when incentives for both projects are equivalent, and investment is only comparable when incentives for the sustainability project are superior. Further investigation using qualitative data attributes this to differences in the salient social norms that individuals hold and an apparent undervaluing of the indirect incentive derived through sustainability's contribution to cost savings. The results shed light on primary ways in which human resource management practices may be used to embed support for sustainability initiatives throughout the organization.

Purpose – Organizational sustainability has become a priority on many corporate agendas. How to integrate sustainability efforts throughout the organization, however, remains a challenge. The purpose of this paper is to examine two factors that potentially enhance incentive effects on employee engagement in environmental objectives: explicit organizational values for sustainability and the performance objective’s complementarity with incented financial objectives. Design/methodology/approach – The authors employed a quasi-experimental design in which participants were randomly assigned to one of four conditions, including a status quo condition against which the treatments were contrasted. Participants (n=400) were comprised of a cross-section of US employees from a wide range of occupations and industries. A post hoc qualitative analysis provided additional insights. Findings – Incentive effects were enhanced (i.e. preference for the environmental objective was significantly higher) when the environmental project offered complementary benefits for financial objectives, but not when organization values emphasized sustainability. An entrenched status quo bias for financial performance was discerned among a subset of the sample. Research limitations/implications – Management scholars must pay close attention to the role of implicit norms for financial performance when investigating employee engagement in organizational sustainability efforts. From an applied perspective, framing sustainability objectives to emphasize financial benefits consistent with a financial mission may maximize employee engagement. Originality/value – This study contributes to understanding of organizational sustainability efforts at the individual employee level of analysis, a conspicuously small part of the organizational research surrounding this topic.

Pay for performance is an organizational control mechanism intended to align the interests of employer and employee. We investigated whether employee risk preference interferes with the effects of this ‘control by pay’ on attitudinal and behavioural outcomes. We found that the degree of consistency between risk preference and control by pay affected withdrawal intentions, contingent pay satisfaction and organizational citizenship behaviour, as hypothesized. The results suggest that the use of pay for performance as a control mechanism should take into account employee risk preference, and that this concern should apply broadly in the organization, not just at the executive level.

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