Motivating Employees with Goal-Based Prosocial Rewards

49 Pages Posted: 16 Jan 2018 Last revised: 7 Oct 2021

See all articles by Leslie Berger

Leslie Berger

Wilfrid Laurier University - School of Business & Economics

Lan Guo

Wilfrid Laurier University

Adam Presslee

University of Waterloo - School of Accounting and Finance

Date Written: October 7, 2021

Abstract

A recent trend in organizations is to motivate employees with goal-based prosocial rewards, whereby employees must donate their reward to charities upon goal attainment. We conduct two experiments to examine the motivational effects of goal-based prosocial rewards versus cash rewards. We develop our hypotheses based on affective valuation theory, which posits that when valuing outcomes by affect rather than calculation, individuals are largely insensitive to changes in probability of the outcomes. Results of both experiments support our hypotheses. In Experiment 1, we find that individuals use more of an affective (calculative) approach when evaluating goal-based prosocial (cash) rewards. In Experiment 2, we find that goal-based prosocial rewards motivate greater effort than cash rewards when individuals are assigned either a stretch or an easy goal but not when they are assigned a difficult but attainable goal. Collectively, these findings contribute to the understanding of when goal-based affect-rich rewards such as prosocial rewards can be more motivating than traditional cash rewards.

Keywords: affective valuation; calculative valuation; cash reward; effort; goal difficulty; prosocial reward.

Suggested Citation

Berger, Leslie and Guo, Lan and Presslee, Adam, Motivating Employees with Goal-Based Prosocial Rewards (October 7, 2021). 2018 Canadian Academic Accounting Association (CAAA) Annual Conference, Available at SSRN: https://ssrn.com/abstract=3102576 or http://dx.doi.org/10.2139/ssrn.3102576

Leslie Berger

Wilfrid Laurier University - School of Business & Economics ( email )

Waterloo, Ontario N2L 3C5
CANADA

Lan Guo

Wilfrid Laurier University ( email )

75 University Ave W
Waterloo, Ontario N2L 3C5
Canada

Adam Presslee (Contact Author)

University of Waterloo - School of Accounting and Finance ( email )

Waterloo, ON
Canada

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