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

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: January 15, 2018

Abstract

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

Berger, Leslie and Guo, Lan and Presslee, Adam, Better to Give than to Receive: The Positive Effect of Prosocial Rewards on Goal Commitment and Performance (January 15, 2018). 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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