Behavioral Effects of Sustainability‐Oriented Incentive Systems

Abstract

Companies increasingly extend their existing incentive systems by integrating several sustainable performance indicators. Although these ‘sustainability‐oriented’ incentive systems clearly highlight which business objectives should be attained, little is known about the effects that these incentive systems have on employee behavior. Based on signaling theory, social identity theory and a person–organization fit (PO‐fit) perspective, we assume positive relations between sustainability‐oriented incentive systems and employee attraction, motivation and cooperation. Furthermore, we examine whether these relations are moderated by personal attitudes toward corporate sustainability activities as well as the underlying mechanisms at the moderation (mediated moderation). Our experimental results (with students as future employees) do not give support for a general positive relation between sustainability‐oriented incentive systems and employee behavior. However, our data show that a person's attitude toward corporate sustainability activities moderates the link between sustainability‐oriented incentive systems and employee behavior. Additionally, we find PO‐fit perceptions to mediate the interaction effects. Copyright © 2015 John Wiley & Sons, Ltd and ERP Environment

The Impact of Indirect Corporate Social Performance Signals on Firm Value: Evidence from an Event Study

“…Our findings also add to prior work on CSP signalling (Corazza et al ., ; Huber and Hirsch, ; Jones et al ., ; Zerbini, in press) by shedding light on how the valence and content of indirect CSP signals affect the magnitude of shareholders' responses to CSP‐related information. We found that negative indirect CSP signals caused larger changes in firm value than positive indirect CSP signals.…”

“…Given the existence of information asymmetries about the level of a firm's CSP, signalling theory provides a useful framework to explore the influence of CSP on firm performance (for a discussion, see Connelly et al ., ; Zerbini, in press), and has thus often been used in the CSR literature (Corazza et al ., ; Huber and Hirsch, ; Jones et al ., ). This theory is concerned with understanding how two parties resolve information asymmetries about what one party (e.g.…”

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“…They conclude that narrow strategies are not viable, and both institutional and internal forces need to come into play, in particular positive attitudes on behalf of senior management. Huber and Hirsch () studied sustainability‐oriented incentive systems in relation to employee behaviour, specifically attraction, motivation and cooperation. Their research found that employee attitude towards sustainability moderates the link between incentive systems and behaviour, which suggests strategic human resource management implications to ensure strong person‐organization fit.…”