behavioral economics corporate social responsibility

Some business leaders explain that “being good is good for business,” a kind of corporate karma if you like. As I understand it, being good as a business generates value for shareholders and stakeholders by improving an organization’s social impact. Being good as a business is also good for employee engagement and productivity.

As a doctor, I can tell you that corporate social responsibility (CSR) aligns with models in behavioral economics that assume people are motivated by more than “pure” self-interest. This is where the idea of combining your CSR program with your employee health and wellbeing program comes to life, in modern science.

Altruism is a key motivator for being a good (corporate) citizen, often taking the form of volunteer work or charitable donations. Altruistic behavior also has important public health applications, with blood and organ donation being prime examples. In addition, research by MIT professor Sandy Pentland and colleagues indicates that incentives benefitting our friends can be several times more effective than standard, individually targeted incentives.

What these concepts tell us is that CSR, health promotion and teamwork can mutually reinforce one another to the benefit of an organization, its employees, and society. Rewarding employees’ efforts with gifts that support a local food bank can motivate their engagement in a wellness program. Social network incentives, where employee teams or the group as a whole benefits from individual participants’ good work, can drive both team cohesion and improved health.

As one example, government employees of Reykjavik City recently participated in a wellness program over a span of three weeks. As employees completed health-improving activities for diet, exercise and stress reduction, they earned altruistic rewards for their achievements. With more than 500,000 activities completed, Reykjavik City was able to donate more than 229,000 liters of clean water to UNICEF – enough for drinking and sanitation for 31 children for a year.

Fortunately, the very drivers that motivate us to do well for ourselves can also help us do good for others. For a program that combines wellness with CSR, the benefits can come back in the form of a healthier and more engaged workforce, as well as a positive impact on society.

So, yes, being good is good for business. But maybe the best thing of all is that you can do good by doing well too.