Original title: Effects of Executive Sustainability Compensation on Nonexecutive Employee Behavior
Some companies give executives bonuses linked to sustainability targets. In an online experiment, employees who were told about those bonuses were more likely to make sustainable choices. Information about leaders’ tone did not have a statistically significantA research result that meets a set standard for being unlikely to arise from chance alone. effect. The result suggests that sharing how executive bonuses are tied to sustainability may influence choices across the company.
Imagine a family deciding whether to sort its rubbish for recycling. It can be hard to know whether the effort matters or whether anyone else is taking the goal seriously. In this paper, hearing that the people in charge receive bonuses for meeting sustainability goals is like learning that the family’s leaders are rewarded for recycling; employees then become more likely to make sustainable choices.
Companies often want employees—not just executives—to make more sustainable choices. The experiment suggests that clearly communicating executives’ sustainability-linked bonuses may encourage those choices, while information about leadership tone did not have a statistically significant effect.
The abstract describes an online experiment but does not report its sample, the specific choices employees made, or how long any effect lasted. It does not establish whether the result applies in real workplaces or whether communicating these bonuses changes behavior over time.
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Effects of Executive Sustainability Compensation on Nonexecutive Employee Behavior — Natalie Rupp — Business Strategy and the Environment — doi:10.1002/bse.71630
Abstract licence: CC BY
Explanation generated by Synthesis from the abstract — it is not the original paper.