Tag Archives: Employee Satisfaction

Do Public Sector Employees Volunteer More Than Private Sector Employees?

I have a confession to make right off the bat — I wrote the headline for this post specifically to counter Betteridge’s law of headlines. If you’re familiar with it, then you’ve already realized that the answer to the question posed is yes.

From the research:

The models showed that government employees volunteered more in general, and participated in a wider range of organizations. However, when the data is examined more closely, the models suggested that these initial big differences are driven primarily by volunteering in two specific types of organizations: educational institutions and political groups. As expected, having children in the household predicted involvement in educational institutions. Other factors such as education, income, health, and formal and informal connectedness explained the higher participation in other venues, but even controlling for all these factors, government employees were still significantly more likely to volunteer in educational and political institutions.

I find it interesting that even when controlling for things that we might think have be confounding, the effect still holds. More than that, though, is the sample. The researchers mention that people older than 60 were oversampled, but that they also too steps to account for this. However, it’s noteworthy that the years from which these data are pulled are quite “old.” In fact, they pulled data from 2008 and even in 2002! Of course, given limited access to data, I can understand this, but when taking this into account, I’m inclined to think that if the researchers were to duplicate the study with more recent data, they’d find an even bigger effect. Consider this:

According to an AP-GfK poll of 1,044 adults, three out of ten (29 percent) Americans under the age of 30 agreed that citizens have a “very important obligation” to volunteer, a significant increase from the 19 percent who said the same thing in a 1984 survey conducted by NORC at the University of Chicago.

There’s also the idea that millennials prefer a career that “matters” over a career solely motivated by money.

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Let’s assume for a second that public sector employees and private sector employees have the same motivations and that they’re equally likely to volunteer. This isn’t true given the research I’ve included above, but stay with me for a second. Let’s also assume that education, socioeconomic status, and all the other possible confounding variables are equal. Meaning, let’s assume that there’s no difference between a public sector employee and a private sector employee except for the number of hours they work each week. It’s no secret that working in some (many?) private sector jobs, 40-hour workweeks (or less) are the exception rather than the norm. So I wonder, maybe public sector employees volunteering more than their counterparts is a question of availability. If pubic sector employees work only 40 hours in a week, while their private sector counterparts are working 50- or 55-hour workweeks, it stands to reason that public sector employees may be more likely to volunteer simply because they have more time to volunteer. Food for thought.

ResearchBlogging.orgErtas, N. (2014). Public Service Motivation Theory and Voluntary Organizations: Do Government Employees Volunteer More? Nonprofit and Voluntary Sector Quarterly, 43 (2), 254-271 DOI: 10.1177/0899764012459254

Do Public Salaries Increase Performance?

With the recent news regarding Jill Abramson and the New York Times, I wanted to take a closer look at the academic literature to see if I could find something about public salaries. There’s certainly been a lot written about whether she was fired or she quit or whether it had to do with secretive salaries or her gender. I’m not writing this post to debate any of that because I consider myself grossly uninformed on what may or may not have happened, but I am writing this post to talk about pay secrecy.

The research showed that pay secrecy adversely affected individual task performance. Meaning, the absence of public salaries led to a worse performance. Why? Pay for performance. That is, because the salaries weren’t public, workers didn’t have a perception that an increase in performance would lead to better pay.

There were a couple other important pieces that I wanted to highlight.

1. The best workers were more sensitive when it came to the perception of link between pay and performance.

This certainly makes sense as those folks who are working the ‘hardest’ would want to know that they’re being appropriately compensated for their hard work. An implication from this point is that organizations that don’t have public salaries might have a harder time retaining their top talent. We can tie this back to the situation between the New York Times and Abramson. Again, I wouldn’t say I’m informed of the situation, but from what I understand, Abramson was rather high up in the NYT hierarchy, which indicates to me that it was fair to consider her “top talent.”

2. If public salaries isn’t an option, partial pay openness could mitigate the negative effects of pay secrecy.

It might be that a firm or organization isn’t yet comfortable with releasing all data about salaries, so an intermediary step could see them gently open up the salaries by talking about ranges. This point reminded me about government salaries that often have ranges for each level that an employee reaches. One may not know exactly what their co-worker makes, but if one knows that their co-worker has reached a certain level, one would know that one’s co-worker’s salary is in a certain range.

Just before ending this post, I wanted to circle back to the point about pay for performance. In this study, the task that participants completed was a “computer matching game.” Based on what’s been written about pay for performance, this is the right kind of task to test these sorts of hypotheses. However, when it comes to more creative tasks, the pay for performance model doesn’t always fit the best. Tying this back to the situation with Abramson and the NYT — it’s not clear to me whether the “pay for performance” model fits best. Having never worked at a newspaper or publishing outlet, I don’t exactly know the role of an Executive Editor, but from what I’ve been able to read through Google searches, it sounds more like creative tasks.

ResearchBlogging.orgBelogolovsky, E., & Bamberger, P. (2014). Signaling in secret: Pay for performance and the incentive and sorting effects of pay secrecy Academy of Management Journal DOI: 10.5465/amj.2012.0937

Labor is the Superior of Capital, and Deserves Much the Higher Consideration

Do you recognize those words? Scholars (and/or) American history buffs just might. They were spoken by one Abraham Lincoln on December 3rd, 1861, as part of his first State of the Union address. The quote comes from very near to the end of the speech; the beginning of the third last paragraph. The sentence on its own is worth pondering, but let’s put it in context:

Now there is no such relation between capital and labor as assumed, nor is there any such thing as a free man being fixed for life in the condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration. Capital has its rights, which are as worthy of protection as any other rights. Nor is it denied that there is, and probably always will be, a relation between labor and capital producing mutual benefits. The error is in assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them.

As is clear, Lincoln is referring to what was a major problem at the time — slavery. While those words were initially spoken with regard to slavery, I think that they have a broader application. That is, labor really is the superior of capital and not just in the context of slavery. Without labor, there’d be no capital. Labor is the backbone of any economy — local or global. As a result, it’s frustrating to see how poorly mismanaged the workforce can be.

From a business standpoint, I can understand why managers would want to crimp on labor, both in the number of employees and their However, I see this as extremely short-sighted. Whatever short-term gains are made from this strategy, they’re lost in the longer term when one has to replace the employee because they’ve either quit or because they’re overworked (and needed time off because of stress and/or fatigue).

I wonder if treating labor as if it’s another “expense” or “liability” is endemic to the culture of work in America. If we revisit the chart about vacation from this past summer, we see that just about every country on that list is in Europe and from what we know about the culture of many European countries, there’s an air of slowness that you just don’t find in America. Maybe it’s that European businesses have already learned this lesson of treating the workforce like an expense and realizing that it’s just easier to pay up front. How different would business look like in the US if the workweek went from 40 to 30 and the number of mandatory paid vacation days went from 0 to 20? Even if the US workweek went from 40 to 37.5 as is the case in Canada, how different would things be, then?

This focus on the short-term seems to be in more places than one. It’s even present in the way public companies are structured — they have to report their earnings every quarter. That is, every 90 days — 90! — a company gives a report to their shareholders (and the public) about their earnings. Predominantly, people are looking to see whether a company “beat” estimates. If (when?) a company doesn’t meet estimates, the stock price usually takes a tumble. But what if this incessant push to meet estimates and focus on these 90-day windows doesn’t allow for an appropriate longer term strategy? What if this 90-day crunch is preventing a company from pursuing a strategy that would make it far more sustainable in the long run and if they attempted to pursue that strategy, their stock price would plummet?

I don’t have all the answers to these questions, but I believe the beginning of the answer starts with labor. Companies that honor and respect their workforce tend to perform better.

If You Want to Be Happy, Spend Your Bonus On Your Coworkers

We’re getting closer to the end of the year and for many firms and organizations that means it’s time to think about bonuses. Many people rely on these bonuses to get them through the holidays with all the extra spending (gifts, kids, travel, etc.). How would you react if your company made a slight change to your bonuses this year. Instead of receiving your usual 1% or 10% bonus, depending on your industry, what if your boss said you had to donate that money to a charity or that you had to spend that money on your fellow coworkers?

I’d imagine that you probably wouldn’t be too happy, am I right? That bonus you were looking forward to at the end of the year is “yours” and you should get to spend it on you and your family. Except, research shows that’s not the case. In fact, the research indicates that spending the money on someone other than yourself actually leads to greater happiness. More than that, it can lead to your improved performance at work.

In the first experiment, researchers gave charity vouchers to the experimental groups and instructed them to donate to a charity. The control group received nothing. The results:

Participants who received a $50 USD charity voucher reported being significantly happier, whereas happiness levels were unchanged for those in the control and $25 USD conditions.

In the second experiment, researchers gave members of a sports team money with which to spend on a teammate. They also gave money to the team members (of a different team) and told them to spend it on themselves. The results [Emphasis added]:

Prosocial bonus teams performed better than personal bonus teams. . . In the prosocial bonuses condition, sports teams showed a large, but statistically marginally significant increase in performance. Meanwhile, in the personal bonuses condition, there was no evidence for improved performance.

Another way to demonstrate the effectiveness of these interventions is to calculate the return on investment for prosocial and personal bonuses. On sports teams, every $10 people spent on themselves led to a two percent decrease in winning percentage, whereas every $10 spent prosocially led to an 11% increase in winning percentage.

In the third experiment, the researchers used sales teams at a pharmaceutical company. Sales teams were split up into two conditions: spending money on themselves or spending money on a coworker. The results [Emphasis added]:

Prosocial bonus teams performed better than personal bonus teams. In the prosocial bonuses condition, sales teams showed a large and significant increase in performance. Meanwhile, in the personal bonuses condition, there was no evidence for a performance improvement.

Once again, it is possible to conceptualize the effectiveness of these interventions by calculating the return on investment for prosocial and personal bonuses. On sales teams, for every $10 USD given to a team member to spend on herself, the firm gets just $3 USD back – a net loss; because sales do not increase with personal bonuses, personal bonuses are wasted money. In sharp contrast, for every $10 USD given to a team member to spend prosocially, the firm reaps $52 USD.

The research, while not extensive, adds to the growing body of evidence that prosocial behaviour can reap positive results for those who engage in it. As the researchers wrote in the discussion section, future research is needed, but this study does give managers another tool with which to improve the performance of their teams and increase the well-being (i.e. happiness) of their employees.

ResearchBlogging.org
Anik L, Aknin LB, Norton MI, Dunn EW, & Quoidbach J (2013). Prosocial Bonuses Increase Employee Satisfaction and Team Performance. PLOS ONE DOI: 10.1371/journal.pone.0075509