Modelling of Social Key Performance Indicators of Corporate Sustainability Performance

Abstract

Corporate social performance is discussed in this paper. The aim of this article is to propose indicators of social performance in the context of corporate sustainability. Relevance of the proposal has been verified through a questionnaire that focused on large manufacturing companies in the Czech Republic. Using statistical methods, it was found that a basic set of sixteen indicators can be replaced by six key performance indicators -Percentage of employees covered by collective agreement, Wage discrimination, Occupational diseases, Violations of ethical code, Expenditures on identifying and ensuring customer satisfaction and Percentage of products and services assessed for their influence on health and safety of customers. These results aim to contribute to both academy and corporate practitioners, who want to improve corporate social performance and through the use of key performance indicators to support transparency and sustainability of their business. This study, however, has some limitations. The key performance indicators are designed specifically for large manufacturing companies of group 27.1 CZ-NACE.

Priority Stakeholders’ Perception: Social Responsibility Indicators

“…The first step of the principal component analysis for component extraction was to assess the suitability of indicators for the analysis. This evaluation was performed using two criteria: Kaiser-Meyer-Olkin measure of sampling adequacy and Bartlett's test [42,120]. Kaiser's sample adequacy measure, the eigenvalue, assesses the adequacy of indicators by comparing the paired and partial correlation coefficients and assigns values between zero and one to them [3,42,[121][122][123].…”

“…The suggested minimum threshold for this test is 0.7 [3,121,126,127]. Cronbach's alpha and the Kaiser-Meyer-Olkin measure of sampling adequacy must be directly related [42,121,123].…”

“…Social responsibility performance is measured by the impact of organizations' activities on their stakeholders [42][43][44][45]. Stakeholders are the beneficiaries of organizational actions and have specific interests in them.…”

“…Organizations use voluntary disclosure of social responsibility information to manage their performance. Such disclosure informs stakeholders of the impacts of the organization on the social system in which it operates [5,18,29,42,56]. There are several initiatives by entities to guide disclosure by organizations.…”

“…In addition, the frequency of assessments should be defined to evaluate the performance of organizations. The costs of obtaining and monitoring information should not exceed the benefits generated [18,42]. On the other hand, performance evaluation should not consider the predominant approach of analyzing the most widespread and therefore comparable standardized economic and financial indicators alone [42,56].…”