What are Compulsory CSR Commitment Policies and Their Effectiveness and Pitfalls

What are Compulsory CSR Commitments and How They Work in Corporates

In many multinational companies such as Goldman Sachs, SAP, and P&G, employees are expected to spend time on Corporate Social Responsibility activities and in turn, they are rewarded or penalized based on whether they have undertaken the necessary commitments with regards to CSR activities.

This is the so-called Compulsory CSR Commitment policy wherein employees need to spend time in visiting villages, communities, and other places and stay with residents there or engage with the communities.

Employees are provided time off from their daily work and they are also graded in their appraisals based on the feedback from their CSR visits.

The idea behind this policy is to ensure that employees and organizations do not merely pay lip service to CSR and instead, they walk the Talk and Put Their Money where their Mouth is by living the experience.

Moreover, given that their grades on the appraisal depend on how much time they spent and the quality of their CSR work, employees are incentivized to take their CSR commitments seriously and to make such commitments a success.

Indeed, this policy has become so popular that many Indian firms are also adopting such measures to ensure that employees and in turn, the organizations can take CSR seriously.

Moreover, with the Indian government making it mandatory for corporates to spend a percentage of their budget on CSR activities, the appeal of such policies is becoming more alluring.

Compulsory CSR Commitments Should not Turn to Green Washing and Photo Ops

Having said that, some management experts question the efficacy and effectiveness of such policies.

They point to the fact that mandatory CSR commitments are another form of “Green Washing” or the term used to refer to the practice of superficial commitments to so-called Green Causes whereas in reality, nothing much changes on the ground.

In other words, the criticism against mandatory CSR commitments and such policies is that neither the organizations nor the employees put their heart and soul into the CSR commitments and instead, all that they seek to achieve is compliance to CSR commitments for the former and grades in appraisals for the latter.

Indeed, by forcing employees to spend time in villages and communities, the chances for such visits to become Photo Op sessions and occasions for Media Coverage is high.

As we have seen during the Swatch Bharat campaign promoted by the Government of India, the celebrities who participated in such activities did so for the media and the social media attention more than out of any long term commitment towards the cause.

Therefore, the criticism against the Mandatory CSR commitments is on similar lines and most of the employees who undertake such commitments are often seen completely forgetting about such commitments in the rest of the year and only when it is time to dock their time, do they engage with the communities there.

This is the Five Star Activism trend that some experts often decry and hence, there are serious doubts about the efficacy and effectiveness of such policies.

How Such Policies Can be Made Effective by the Corporates

On the other hand, it is our contention that such policies have the potential to become effective provided the organizations and the HR managers take some steps for greater engagement.

For instance, corporates can ask their employees to make multiple visits in a year to the villages and communities and have a system of follow-up and feedback that they can institutionalize so that there is continuity.

In addition, the corporates can also ensure that employees maintain contacts with their chosen communities throughout the year and not only during the time that they have to spend.

Apart from that, the Senior Leadership can show the way by Leading by Example and ensuring that the corporates Wear Their Heart on their Sleeves and not merely pay lip service or indulge in Green Washing.

Moreover, the HR managers can conduct sessions and workshops for the employees to be motivate them and by inviting leading Social Activists to such meetings, they can also inspire the employees as well.

Most importantly, each employee can be given choices as to the type of activities that they are willing to do instead of foisting and forcing them to engage in a particular activity.

Further, employees can be divided into teams where there are members from across the horizontal and vertical hierarchy so that such occasions help them in bonding with each other and the communities they are engaging with.

Employees can also be made to record diaries and keep journals during their CSR engagements so that they can refer back to such entries and rediscover some things about themselves and the communities.

Last, the corporates must not excessively penalize the employees during the appraisals for poor engagement and instead, their grades can be made coterminous with the yearlong commitments and how well they have gained an understanding of CSR.

Conclusion

As can be seen from the discussion so far, Mandatory CSR Policies can backfire as well as lead to genuine change in the way corporates take their social commitments seriously.

Moreover, mandatory CSR policies can lead to bonds between the employees and the communities that can last a lifetime and in addition, corporates can sustain such communities and nurture them.

The key to the effectiveness and efficacy of such policies is the managerial commitment and the executive buy in that are most required to make such policies work.

To conclude, it is our contention that sustained, longer term, heartfelt engagement to CSR can be actualised through the Mandatory CSR Commitments Policies.


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The article is Written By “Prachi Juneja” and Reviewed By Management Study Guide Content Team. MSG Content Team comprises experienced Faculty Member, Professionals and Subject Matter Experts. We are a ISO 2001:2015 Certified Education Provider. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.


Corporate Social Responsibility