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Abstract
The current paper extends the CSR literature empirically by investigating the linkage between CSR and job satisfaction and employee retention. Besides, the paper cites the impact of the Covid-19 pandemic on the employment industry. The pandemic has seen many employees working contracts terminated, suspended, or even forced to survive on half salary. In addition, the research paper tries to depict how companies are struggling to retain their high-performing employees without stretching on their finances. The onset of the pandemic affected the employees both at workplaces and homes. The companies find themselves struggling to convince the employees to stay on half their salaries. The paper finally highlights the employees intention to stay despite the suspended employment contract. Data was collected from 500 questionnaires filled by employees working in Romanian companies from different industries. The results showed that CSR initiatives positively influenced employees satisfaction. The findings reveal some important actions about how to boost employees satisfaction through CSR practices. Directions for future research are discussed.
Introduction
Human resource management (HRM) has always been one of the most outstanding research areas in the business segment. Employee welfare has always been the number one concern in most workplaces, especially during this time of the COVID-19 pandemic. Covid 19 pandemic has seen employees layoffs with the lucky once forced to survive on half salaries. However, when speaking of HRM, it is of crucial importance to understand that employee satisfaction serves as a major variable in all theoretical frameworks related to the issue. Hence, any idea of a conceptual model implemented into an organization is inevitably influenced by human capital to a certain extent. However, when speaking of the situation from an opposite perspective, it is rather difficult to define the extent to which the working framework impacts the employees.
One of the most widespread frameworks integrated into the working environment is the Corporate Social Responsibility (CSR) model. According to the researchers, the latter stands for the organizations actions aimed at positive outcomes beyond its sphere of interest, contributing to society in general (Tamvada, 2020). Thus, the following commitment implies a wider range of responsibilities for both the human capital and top management, as it encompasses a range is sustainable interventions in the working process. Considering this assumption, the research employee may be outlined: employee CSR attribution considerably influences the overall level of job satisfaction and employee retention. Companies are struggling to retain most of their high-performing and proficient employees. The employees have always ensured business continuity for a long time. Besides, those employees were often used to luxuries lifestyle and find it difficult to adapt to half salary which cannot meet their primary needs. Unfortunately, some of the employees succumbed to coronavirus pandemic, and the companies resolve to turnover of employees for replacement. Most of the businesses are running on a tight budget due to poor economy and low profits. The turnover has led to the loss of valuable knowledge and experience, which requires time to acquire.
This article is structured as follows: First, we discuss the literature related to CSR, the relationship between employee satisfaction and CSR, and the research approaches taken to it. We also pass through the employee retention concept, highlighting the related models, the notion of turnover rate, and the related literature to build our hypothesis. We then identify our study method used to test our hypotheses and present the results. Finally, we discuss the findings, including limitations and suggestions for future research.
Literature review
The corporate social responsibility
Prior to understanding the idea of interrelation between CSR and job satisfaction, it is important to identify the working definition of Corporate Social Responsibility, as the definition helps outline some of the major variables. Hence, according to the researchers, the notion of CSR is frequently regarded similarly within organizations, whereas the theoretical foundation for its implementation varies significantly (Frynas & Yamahaki, 2019). Hence, while some leaders perceive CSR as a legal endeavor driven by corporative regulations, others associate the idea with collective ethical consciousness and even charitable activity. However, for the sake of rationality, the following literature review will be focused on Blowfield and Frynass definition that claims CSR to be an umbrella term for concepts and theories aimed at companies responsibility recognition in terms of social impact, environment, and sustainability (Frynas & Yamahaki, 2019). The other variables, in their turn, may be either promoted or dismissed within the organization.
CSR has significant effects on an organizational image. Most organizations are often concerned about their growth and competitiveness in the marketplace and are constantly seeking a positive image among the concerned stakeholders (Brands & Gavin, 2020, p. 45). Furthermore, the strength of a brand always increases with the incorporation of the CSR approach. Besides, it is an important tool in attracting potential customers. CSR policies have helped several businesses to keep their market position and gain a competitive advantage in the business world (Brands & Gavin, 2020, p. 43). In addition, CSR has been used by companies to build reputations along with enhancing their brand image, especially in relation to their stakeholders. CSR is an important approach in any business setup globally.
Relationship between CSR and job satisfaction
A variety of job satisfaction definitions exist that are characterized by a variety of factors that contribute to the notion. For example, Locke perceives job satisfaction as the employees positive frame of mind after the assessment of his or her working experience (Pang & Lu, 2018). Another interpretation stated that job satisfaction might be considered as an extent to which people feel content with their working conditions (Yuh & Choi, 2017). The criteria for job satisfaction are generally divided into internal and external, where the former stands for the individuals expectations from the workplace.
Job satisfaction carries significant importance to companies as it helps save on operational costs. When employees are satisfied, the companys productivity level will be boosted, reducing employee absenteeism. In addition, employee productivity is increased, and lower voluntary turnover is experienced. Job satisfaction causes reduced long-term human resource costs.
Considering the definitions mentioned above, it may be outlined that everything that takes place within the working environment affects employees contentment. Thus, in order to understand the role of CSR in ones job satisfaction, it is necessary to dwell on the relationship between theories relevant to certain working environments and their influence on the overall job satisfaction levels. When speaking of the stakeholder theory, the overall level of job satisfaction tends to be affected due to the fact that employees are perceived as stakeholders, therefore, play a significant role in the organizations management patterns (Appiah, 2019).
Institutional theory, being focused on the adherence to social norms and institutions, contributes to the levels of job satisfaction by providing a structured approach to the employees scope of responsibilities (Van Wijk et al., 2019). Legitimacy theory, driven by the principle of justifying the organizations actions as socially acceptable and non-harmful, tends to improve the patterns of communication between the employee and the company, resulting in employee satisfaction modification (Fatma et al., 2019; Gallardo-Vázquez et al., 2019). Another CSR-related theory, known as the resource-based view, contributes to the perception of job performance because employees are considered as a major strategic resource in terms of management (Ahmed et al., 2018).
Agency theory is also crucial in terms of job satisfaction, as it outlines managers as the agents of any action, providing them with distinct objectives (Zogning, 2017). Considering the fact that that job description plays a pivotal role in satisfaction and performance, the managerial framework presented on the basis of agent theory considerably impacts the employees perception of the environment (Evans & Tourish, 2017). Finally, the major idea behind resource-dependent theory provides companies with the ability to cooperate with external organizations rather than limit their own resources, eventually leading to the minimized conflict risks on the team (Wang et al., 2020). Hence, having taken the following information into consideration, it may be concluded that the scholarly data justifies the assumption that CSR-related frameworks affect the employees job satisfaction regardless of the theoretical foundation chosen.
Several CSR practices can be used to boost an employees satisfaction. CSR provides employees with a sense of purpose by tying their culture to the business (Gutierrez, 2016, p. 78). Furthermore, employees who have a clear and motivating goal feel as if they have ownership in their success, therefore boosting their confidence. In addition, CSR makes employees identify with the organization (Gutierrez, 2016, p. 65). The employees get a sense of belonging, which promotes their satisfaction and retention (Jamali & El Dirani, n.d., p. 69). Finally, CSR programs can be used to empower the employees to be actively involved in the business engagements, which will feed directly into satisfaction.
CSR and Employee Performance
CSR is considered a sophisticated concept, which may work efficiently only once all the variables co-exist in a unified working environment. Hence, according to Carrolls CSR pyramid, the model includes legal, ethical, economic, and discretionary categories (Lu et al., 2020). That is, when securing a successful business, top managers are to make sure that the economic goals crucial for the enterprises existence are achieved without violating neither legal nor ethical considerations. Predictably, some researchers began to question the idea of employee performance in the context of CSR model implementation (Kucharska & Kowalczyk, 2019; Asante Boadi et al., 2020). However, despite the assumption that CSR may negatively impact the performance, the results have shown the opposite, claiming internal expectations and value to be highly important for the CSR-performance paradigm (Kim & Kim, 2020). Hence, it is now important to realize the extent to which employee performance may be positively affected by the CSR model.
It is necessary to dwell on the notion of job security as one of the major performance enhancers. For example, the recent COVID-19 pandemic outbreak has drawn much attention on the matter of how CSR may contribute to job security and satisfaction (Bae et al., 2021). Thus, one of the studies aimed at discovering the CSRs influence on the employees psychological capital in terms of COVID-19 quarantine (Mao et al., 2020). The results of the survey claim positive results in terms of influence on employees hope, resilience, and optimism. Moreover, the notion of CRS presupposes the teams orientation for long-term performance, which generally provides employees with a higher level of security and, consequently, performance (Trivellas et al., 2019). COVID-19 has affected CSR practices both positively and negatively. The pandemic has led businesses to shift toward more genuine and authentic CSR initiatives. Besides, CSR has significantly represented a great context to examine how institutional factors influence businesses (COVID-19: Analysis of extending the coronavirus job retention scheme, 2020, p. 78). Businesses ethical practices significantly shifted due to the coronavirus pandemic (P D. & DSilva, 2020, p. 54). Some companies, especially those making masks and personal protective equipment, tried profiteering from the crisis, bridging their commitment to CSR. The pandemic has also affected the companies marketing and marketing philosophy (McWilliams et al., 2019, p. 64). However, the pandemic has also led some businesses to venture into the production of ventilators, hand sanitizers, and even personal protection equipment with a more approach to CSR. Other companies have changed their operating hours to accommodate the pandemic effects (McWilliams et al., 2019, p. 90). Besides, the pandemic has led to the development of strong bonds between the consumer and the business brands. The COVID-19 pandemic has significantly given companies great opportunities to actively engage with their CSR agendas and strategies. When speaking of other CSR aspects in performance, it is necessary to outline that the model could be combined with other initiatives in order to secure employee performance. According to the scholarly evidence, the conceptual framework between CSR implementation and employees may be mediated through endeavors such as green practices and social exchange (Paillé & Meija-Morelos, 2019; Suganthi, 2019). Taking the aforementioned literature into consideration, it may be concluded that CSR-related models positively influence employee performance when perceived seriously by the management.
Moreover, when speaking of the employees performance, it is necessary to dwell on the financial motivation behind the process. Considering the complexity of the CSR integration in the environment, it would be safe to assume that it requires much financial investment in order to succeed. Moreover, there is a common belief that the companys sustainable development is not profitable in the long run (Bae et al., 2021). However, considering the research data presented over the past years, it becomes evident that CSR implementation secures extremely positive financial outcomes for the company and, consequently, employees (Cho et al., 2019; Sinthupundaja et al., 2019; Awaysheh et al., 2020; Galdeano et al., 2019). These benefits include higher credibility rates in the market and headhunting the best employees to the firm. As a result, the overall implementation of CSR in the workplace creates all the necessary conditions for higher job satisfaction rates. However, it is important to understand that such economic benefit is only achievable when combined with the active promotion of non-economic CSR variables.
The Role of HRM in Employee Retention
Gaining loyal customers in any business is essential for a healthy organization, but what about retaining loyal employees, especially those top performers who show full commitment toward achieving organizational goals. Beer (1992) reported that the growing competition around the world had alerted the company leaders about the importance of retaining knowledgeable and skillful employees to serve customers. Those dedicated workers are the critical elements in getting the customers satisfied; they create the organizational value and set the business on the lane of success.
However, with the COVID-19 pandemic, several businesses faced challenges in retaining their employees. In addition, the pandemic has crushed the business economy, and the human resource professionals have the task of keeping everything in perspective (OECD, 2020, p. 64). Businesses are forced to organize mental health and wellness programs to solve the stress issues among employees (OECD, 2020, p. 74). In addition, the pandemic has affected the employees communication since most people are working remotely, and the human resource professionals are constantly looking for the right remote working tools to monitor them and ensure they never leave.
So, overlooking employees contentment is so risky and ends up with the inaptitude to maintain worthy staff members and to lose valuable customers. Although companies strive to find out the best possible marketing strategy to ameliorate clients fulfillment of needs and wants, shreds of evidence have shown how serious is the impact of employees fidelity on customers loyalty and organizational profitability and success (Ineson, Benke, & Laszlo, 2013). Consequently, taking care of the human resources in the company is a serious concern.
Lindgren (2008) identified the major activities of the HRM. They involve recruiting the right personnel, listing their job description, performing training programs and developing their employees skills, dealing with staff complaints, employee recognition and compensation, and of course, making sure that company rules and regulations are being applied. So that, the HR departments primary responsibility is to look after the human resources available in the company, respond to their needs and value their contributions toward making a successful and reputable company.
This is not all; the HR responsibility encompasses educating employees on their mandatory benefits such as social security, unpaid family or medical leave, workers compensations, and others. Besides are the voluntary settlements, listing of them the retirement plans and family care. Managing those benefits helps attract eligible candidates and lowers the organizational turnover (Mathis & Jackson, 2006).
Motivating staff members fall within the typical duties of the HR department. Employee development and training are two possible motivational strategies pursued together with job enrichment to amplify the staff performance and give them a sense of empowerment (Dessler, 2012).
The Importance of Retention
Looking for a competitive advantage always remains a priority for the corporate level in companies that fail to keep an eye on the employee turnover rate and notice how serious the impact of losing competent employees on organizations profitability.
Heinrich Roth (2008) said: There is a clear link between successful staff retention strategies and the performance of a company.
Common sense tells about the harmful effect of talented employees departures on the business life cycle. Leaving workforces to take with them all the skills, knowledge, experiences, and proficiency acquired throughout the years of performance.
CSR plays an important role in influencing an employees intention to stay. Employees often prefer to work where they get recognized and feel useful (Rasche et al., 2017, p. 76). CSR creates a conducive environment which leads to strong bonds and close relationships between employees. Besides, CSR creates a positive feeling to employees about their organization which further improves their commitment and loyalty to the organization (Rasche et al., 2017, p. 87). CSR brings better employee engagement and performance, resulting in increased creativity and boosts in the confidence of the employees, positively affecting their intention to stay.
Employee Retention Models
Sultana Nazia&Bushra Begum (2013) stated that a company must exert an effort to retain its employees by providing a supportive work environment that assists in satisfying the employees needs and reducing the considerable costs associated with employee turnover. For this reason, different retention strategies were addressed to help organizations retain their proficient performers.
Following are three important models of employee retention.
The first one is called the Zinger model developed by the Canadian expert in employee engagement, David Zinger. This model reveals engaging employees in various organizational activities can boost their performance to achieve the desired results.
In addition, it shows that employees alignment with physical, spiritual, and emotional energy in the organization contributes to the employees wellbeing, career development, and customers satisfaction.
In other words, a strategy of work connections and commitments ends up with meaningful results, and this is vital to employee retention.
The second model is the Employee Retention connections model (ERC). It focuses mainly on three employee retention drivers: the first one consists of work stimulation by assigning more duties for the employees while empowering them to take the required decisions when needed. This model also recognizes the importance of motivation in retaining employees. Leaders are asked to act as role models in the organization, inspire and influence employees creativity and adopt an open door strategy coupled with an open-minded vision that reveals the organizational morals. As per the ERC model, appreciating onal contribution within the company and celebrating the teamwork success boost the employees performance and make them hard workers.
The third model, entitled the integrated system for retaining employees, adds to the companys values through its five-sectioned approach: it begins with the analysis of the prevailed organizational retention culture considering both its positive and negative aspects. Next, the focus is mainly on how to engage employees and support them to achieve and succeed. The third segment considers the methods of implementing a powerful leadership style through training and guidance. The fourth section is concerned with the competency progress and career path development ending with the implementation of a recognition and reward system that pushes the employees to perform at their best.
Every manager has a different way of implementing the employee retention models; however, esteem should always be the base of their application. Organizations can have a waiting list of applicants once their workplace is that hard-to-leave, and this becomes attractive for other candidates (Branham, 2005).
Research and studies recommend the amendment of priorities when it comes to employees wants fulfillment (Gale Group, 2006). Going beyond the conventional needs that involve the basic salary, promotion packages, and compensation programs is a must (Feldman, 2000). Setting training programs (Cunningham, 2002), edification climate (Walker, 2001) as well as career development (Boomer Authority 2009), and friendly environment (Zenger, Ulrich, Smallwood, 2000) all are considered as factors that enhance the workplace long stay of employees.
Turnover Rate
Employee turnover has always been considered a serious problem for businesses, and it is still concealed how much money companies lose over the turnover of employees. However, working hard on retaining employees is not only for the sake of saving money but also to avoid the leakage of talented workers.
Causes of Management Turnover
The employee turnover could be caused by several factors. Listing several ones will include the following:
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Compensation and benefits: studies addressing the relationship between employee turnover and employee compensation affirm that good pay is predicted to motivate the long stay of employees in the organization (Gomez-Meija and Balkin 1992; Milkovich and Newman 1993). The salary is not the sole aspect involved; other benefit packages occupy a great role in pushing the workforce toward staying or leaving their companies (Heneman, 1985).
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Leadership and Supervision: the superior-subordinate relationship has a lot to do with employees intention to stay. Communication skills are significant in strengthening or weakening the employees loyalty to their company. How smooth is the exchange of information, to what extent are workers engaged in decision-making, and how supportive are the managers in the workplace? All these factors have a direct impact on employee turnover (Dansereau, Graen, and Haga 1975, Graen and Scandura, 1986).
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Career development and promotion: sticking to financial compensations to motivate the workforce is not enough. Investing in human resources is a must. Giving them more duties and tasks that stimulate their challenging spirit and coming up with fair promotion opportunities has proven to effectively retain employees and decrease their turnovers. So that, lack of career planning and development is classified among the leading causes of high employee turnover Muskan Khan, 2013).
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Peer-group relations: Morale turned to be stronger when colleagues are friends, and this gives the worker a sense of belonging to the company, which has a great effect on the inner satisfaction of the concerned employee; being satisfied within the social circle of peers developed at work encourages the long stay of the employee as explained by Ibid (1986).
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Labor Unions: those unions whose mission is mainly to defend employees rights and enhance the security of working conditions among performers has a powerful, influential function in lowering the worker turnover rate (Kuo-Shun Sun 2011).
Cost of employees turnover
When the employee quits the organization, staffing and financial expenses arise. Calculating the costs that arise with employees turnover begins with addressing the exit interviews, going after the expenses incurred for the recruiting process, and the following routine of interviewing and selecting the candidates that best suit the positions requirements (Vu, 2008).
In other words, replacing those who left and training the new workers to meet the productivity level demanded in the organization are time-consuming and costly processes for the human resource department (Cattle and Tigyu, 2009).
Ensuring that the company has the right number of workers at the right places with the right skills is a pivotal function for the HR department noting that, staff shortages may alter the companys level of performance due to the load placed on the lingering workforce.
When an organization faces a problem of high turnover, it affects its productivity and impacts the overall employees morale. Such state of affairs pushes the human resources department for proceeding with an effective strategy of boosting the work environment to reduce the negative outcomes of this problem.
Procedures and methodology
This paper will investigate the impact of CSR initiatives on job satisfaction and employee retention. Additionally, we will be looking for the root cause (s) of the high employee turnover at the Romanian companies, discussing the strategys effectiveness and its impact on employees retention. Stated otherwise, it is to figure out the importance of employees satisfaction. These findings will undoubtedly help in revealing the smartest course of action to be adopted by the management to retain the proficient and well-experienced workers permitting thus a healthy running of the business.
Following are the research questions highlighting the areas of concern.
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Is there any positive correlation between CSR practices and employees satisfaction?
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Is there a positive relationship between the employees salaries and their plane of satisfaction?
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Is there a constructive correlation that links job satisfaction to employees intent to quit in Romanian companies?
Hypotheses
The proposed hypothesis generated through the research questions would be as followed:
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H0: CSR attribution considerably influences the overall level of employees satisfaction
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H1: CSR attribution has no influence on the overall level of employees satisfaction
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H2: The level of employees contentment in Romanian companies has no influence on their retention
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H3: The level of employees contentment in Romanian companies has a direct influence on their retention
Sample
This studys data came from 47 companies belonging to different industries operating in Romania that have been involved in CSR initiatives in recent years, with a total of 512employees. Questionnaires have been distributed online to a total of 720 employees. A list of contact emails was obtained from a major research firm in Romania. We got 500 employee responses (71.1 % response rate). Participants have participated, excluding trainees, newcomer employees, and Human Resource executives. In order to ensure confidence in the reliability of the responses, no requests for employee names or positions were made. The appendix will provide an idea about the questions that were tackled so that quantitative model research is used in this article. The survey helps in carrying out the statistical analysis of the variables that are involved in this paper. This relies on the numerical information and data as reported by several respondents. A quantitative analysis using the SPSS system has been performed throughout the study where correlations between different variables were intended, and descriptive figures were examined. The questionnaire consists of mainly three divisions:
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The demographic aspects
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The employment conditions
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The existing organizational and functioning atmosphere
Selected variables
In this paper, the recognized independent variables are the demographic features, including age, gender, monthly income levels, and employees industry allocation. The dependent variables are employee satisfaction and CSR attribution.
Since previous research has shown that a firms size and industry characteristics have a major effect on its output (Zhang, & Li, 2009), we included control variables for organizational performance in our research model. Employees tenure (in years) and educational level were included (Riketta, 2008) control variables for job satisfaction.
The relationships between the dependent and independent variables have assisted in the evaluation and consideration of the study results. Research variables were measured using a four-point Likert scale (with scores ranging from 1 = extremely dissatisfied to 4 = extremely satisfied).
Research Methods
This research work has been carried out to investigate the impact of CSR attribution on job satisfaction and employee retention. The data was collected from a sample of 512 respondents who were working in different organizations from various industries. The data collection method used was a questionnaire. Data was collected during the Covid-19 period. In order to analyze the data, first of all, the demographic profile of respondents was analyzed, the correlation between the variables was evaluated. In the end, the impact of CSR was investigated using linear regression. The data analysis was done in IBM SPSS.
Findings
Demographic profile of respondents
This section represents the frequency distribution and graphical representation of the respondents. The demographic facto
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