Better to Give than to Receive: The Positive Effect of Prosocial Rewards on Goal Commitment and Performance
26 Pages Posted: 16 Jan 2018 Last revised: 31 Mar 2018
Date Written: January 15, 2018
In recent years the use of prosocial rewards in employee incentive contracts, where employees must give their reward to a charity or coworker, has become common. We use an experiment to examine a setting where individuals are assigned a performance goal and rewarded with either cash or prosocial rewards for goal attainment. We hypothesize and find that prosocial rewards result in higher goal commitment than cash rewards and that prosocial rewards positively affect performance through their positive effect on goal commitment. Moreover, consistent with theory, we find that individuals attach greater psychological importance to goal attainment when pursuing prosocial rewards than when pursuing cash rewards. These results suggest that firms may experience higher organizational performance if they incorporate prosocial rewards into employee incentive contracts.
Keywords: cash, goal commitment, performance, prosocial rewards
Suggested Citation: Suggested Citation