Is bribery the best you got?

Is bribery the best you got?

“I was offered a wonderful job promoting ocean restoration!” my beaming Georgetown student, Lisa, tells me. Before I shriek my congratulations, she deflates. “It would be a 30 percent pay cut, so I doubt I can take it.”

Lisa was considering a move from a corporate to a nonprofit marketing director position. Why would the nonprofit version of the job pay substantially less than the for-profit version? This question has irked economists for decades.

Economic theory states that the market equalizes pay across similar jobs. Yet, nonprofits staff up easily while for-profits have to pay significantly more to do the same. One study found that nonprofit jobs pay, on average, 37 percent less than comparable for-profit jobs. Why are nonprofits blithely exempt from market forces?

The troubling reason some jobs pay well

Researchers have finally uncovered the reason, or at least a key reason, for-profit businesses pay more than nonprofits. The fancy academic term is “labor donative hypothesis.” I prefer, however, my non-fancy term: bribery.

Lisa doesn’t like her for-profit job but might keep doing it for money. Paying someone to do what they don’t want to do is the definition of bribery. Why in the world does Lisa need to be bribed to stay? The answer is societal purpose. Lisa explained it this way:

“Last year I hit all my key performance indicators and got my full bonus. We sold 23 percent more fish [yes, this really was the product she marketed] year over year…The morning after I was recognized for my performance, I went for a run. A pesky question haunted me at every step. ‘So what? So what? So what?’ The only evidence of my ‘success’ in the broader world was that our competitors sold less… It turns out my greatest workplace accomplishment leaves me feeling like I’ve accomplished nothing.”

Still, Lisa might keep her job because it pays well. Many do. Bribery works, at least in terms of filling positions. In fact, so many corporate workers exact premium wages, e.g., bribes, that they’re the force pushing for-profit wages well above nonprofit wages.

Cornell University professor Robert Frank conducted research where he asked MBA students to rate the social responsibility of 141 jobs. Similar to the wage gap between nonprofit and for-profit sectors quoted above, the 11 most socially responsible jobs, which included environmental consultant, shelter coordinator and teacher, paid 39 percent less than the four least socially responsible jobs, which were stockbroker, salesman, trader and tax specialist.

Similarly, Vanessa Burbano from Columbia University conducted a study showing that prospective workers were willing to accept lower wages, 44 percent lower in one group, if they were aware of the employer’s social responsibility.

In other words, it’s not simply whether a job is in the nonprofit or for-profit sector that changes employee willingness to perform it for a certain wage. Regardless of the sector, job seekers demand more pay from less socially responsible jobs.

I’m not saying societal purpose is always a job consideration. A taxi driver recently told me “Work allows me to survive. There is no other reason for it.” For him and many others, the purpose of work is to have overhead shelter and a full refrigerator to go home to. Even for those who seek workplace societal purpose, it’s only one of many considerations in employment decisions. Autonomy, recognition, opportunities for growth and a mess of other factors influence their bargaining.

I am saying, however, that Lisa’s story is so common that it could be affecting your team right now. It might pain some of your employees that their toil doesn’t improve a world that troubles them with every shooting they see on the news and homeless child on their commute. Like Lisa, they might be fantasizing of a job that reduces crime or feeds homeless children as they sit across from you in meetings. In fact, the news for corporate managers is worse. Both Frank and Burbano’s research suggest that the most productive workers are the most likely leave traditional corporate employment for socially responsible jobs.

Although her employer offered a hefty raise for her to stay, Lisa took the nonprofit job saying “I can find a way to live cheaply. I can’t find a way to get excited about a job that doesn’t contribute.” This is the limitation of cash. While bribing can get people to show up for work, it can’t motivate them to perform. (For more on this, see my prior post.)

What can you do?

If you manage workers who appear interested only in extracting money from their employer and are easily distracted by opportunities elsewhere, don’t blame yourself. They are acting like the bribed beings the labor market has reduced them to. You can, nevertheless, improve their relationship to work.

You can give employees the opportunity for societal impact through work, similar to what nonprofits offer. Lisa might have stayed with her employer had she been able to market fish in a way that also promoted sustainable fishing or educated the public on ocean conservation. Indeed, I’ve helped several companies collect data indicating that employees who participate in societal impact activities have lower turnover.

Offering employees the opportunity to make a societal impact through their everyday work is not as absurd as it sounds — at least not any longer. It’s a practice called job purposing that is showing promise in workplaces from FedEx to HP to LinkedIn. Job purposing is also not just for highly educated purpose-oriented workers. While my cabbie, and many others, might not be able to envision job purposing, they will value it when they experience it.

In conclusion, if you manage corporate workers, you might be complicit in bribing them to forego work with a fulfilling societal purpose. Nevertheless, you have a choice: To perpetuate capitalism’s systemic bribery or to job purpose.

This post was originally published on LinkedIn on the post date and reposted here in January 2018 when this site launched.

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