Paying It Forward versus Rewarding Reputation: Mechanisms of Generalized Reciprocity

Abstract

Generalized reciprocity is a widely recognized but little studied component of social capital in organizations. We develop a causal model of the multiple mechanisms that sustain generalized reciprocity in an organization, drawing together disparate literatures in the social, organizational, and biological sciences. We conduct the first-ever critical test of two key mechanisms: paying it forward versus rewarding reputation. These are fundamentally different grammars of organizing, either of which could sustain a system of generalized reciprocity. In an organization, paying it forward is a type of organizational citizenship behavior (OCB) that occurs when members of an organization help third parties because they themselves were helped. Rewarding reputation is a type of OCB that occurs when peers monitor one another, helping those who help others and refusing to help those who do not. Using behavioral data collected from members of two organizational groups over a three-month period, we found that reputational effects were strongest in the short term but decayed thereafter. Paying it forward had stronger and more lasting effects. Dominant theories assume that rewarding reputation is the main cause of generalized reciprocity, but our analysis demonstrates that generalized reciprocity in an organization occurs for multiple reasons. We use the empirical findings to develop propositions about the mechanisms of generalized reciprocity in organizations and link these to management practices. Our study contributes to social exchange theory, macro-level prosocial behavior, OCB, positive organizational scholarship, and management.

Keywords: Prosocial, reciprocity, organizational citizenship, positive emotions, reputation

JEL Classification: D23, Z00