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Asia-Pacific Social Science Review | Vol. 21 No. 3 | September 2021
Copyright © 2021 by De La Salle University
RESEARCH ARTICLE
Corporate Social Responsibility and Work
Engagement: Mediating Roles of Compassion and
Psychological Ownership
Muhammad Ali1, Talat Islam1*, Khalid Mahmood1, Fouzia Hadi Ali1 and Basharat Raza2
1University of the Punjab, Lahore, Pakistan
2National College of Business Administration and Economics, Lahore, Pakistan
*talatislam@yahoo.com
Abstract: Employee work engagement has become a great challenge for today’s HR managers globally as hardly 13% of
employees are engaged in their work. Therefore, this study investigates the mechanism between corporate social responsibility
(CSR) and employee work engagement considering compassion at work and psychological ownership as mediators. We
collected data from 251 employees working in the life insurance company using a self-administered questionnaire through
convenience sampling. We applied structural equation modeling using AMOS version 24 to test the hypotheses. The results
reveal a signicant direct association between CSR and employee work engagement. Further, compassion at work and
psychological ownership were found to partially mediate the association between CSR and employee work engagement.
Our study highlights the signicance of CSR to increase employee work engagement by experiencing compassion at work
and psychological ownership. This research contributes to the existing literature on CSR and micro organizational behavior
literature from the social identity perspective. Furthermore, to the best of our knowledge, compassion at work and psychological
ownership have not been examined as mediators between CSR and employee work engagement.
Keywords: corporate social responsibility, compassion at work, psychological ownership, employee work engagement
Corporate social responsibility (CSR) impact
overall sustainability by contributing economic
management, social management, and environmental
management (Cazeri et al., 2018). More specifically,
organizations express their commitment to society in
the form of CSR by exhibiting positive attitudes and
acts either locally or globally (Ashley, 2005). This
is because businesses have moral responsibilities
(beyond what is imposed by law) to care for overall
sustainability. Sustainability refers to the “avoidance of
the depletion of natural resources in order to maintain
an ecological balance” (Dahlsrud, 2008). Such actions
protect and develop a society which sparks the concept
of CSR.
The concept of CSR has largely been studied from
an organizational perspective. For example, how it
may affect organizational financial performance, that
is, supply-chain risks (Abner & Ferrer, 2019; Lee &
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Park, 2009), or how it may impact the organization’s
customers, that is, customer satisfaction and loyalty
(Lee et al., 2012; Puriwat & Tripopsakul, 2018).
However, literature is scant about how CSR impacts
organizational employees’ job-related outcomes
(Islam et al., 2016). It has become important to
consider employees because they are the real assets
for the organizations and are a source of competitive
advantage. In this perspective, Boulouta and Pitelis
(2014) suggested that businesses must include CSR as
a strategy because the integration of the organization’s
business strategy as CSR contributes towards overall
organizational effectiveness.
Empirical studies examining the effect of CSR
on employees’ job-related outcomes suggested job
performance (Shin et al., 2016), personal initiative,
job satisfaction, voice and helping behavior (Ali et
al., 2020; Raub & Blunschi, 2014), organizational
identification, and pro-environmental behavior
(Cheema et al., 2020) as its positive consequences.
Amongst these, work engagement remained a
neglected variable that further needs to shed light
(Farrukh et al., 2020; Lu et al., 2020). Employees’
work engagement has become a worldwide issue for
managers worldwide (Islam & Tariq, 2018). A global
survey on employee work engagement has revealed
that only 13% of employees are actively engaged with
their work (Gallup, 2013). This means that almost 87%
of the employees are not enthusiastically engaged in
their routine tasks. Lim (2002) found that employees
usually waste two hours per day talking with co-
workers and internet surfing other than scheduled
lunch breaks, which accumulate a loss of $400-450bn
per annum (Gallup, 2013). Boye and Slora (1993) also
revealed that above 60% of employees admitted to time
theft, which costs US$177 billion annually to United
States companies (McGee & Fillon, 1995). Similarly,
employees spend a significant portion of the day at the
workplace but staying disengaged with the work can
reduce their productivity, which may negatively affect
the employee’s well-being and ultimately resulting in
a social problem (Rupp et al., 2018).
Literature has suggested that organizations
providing a learning culture, leadership, and support
may engage their employees in work. However, the
same is not working for the organizations; therefore,
this study suggests that CSRs may help employees
engage in their work. In addition, considering the
future calls of Wang et al. (2015) and Chaudhary
(2019), there is a need to study mediating variables
that explain the association between CSR and
employee work engagement. This study considers
compassion and psychological ownership as mediating
variables. Chaudhary (2019) identified psychological
availability, safety and mindfulness, whereas Lu et
al. (2020) identified organizational justice and job
satisfaction as mediating variables between CSR and
work engagement.
This study extends previous studies to answer
when and why CSR fosters employee work engagement
(Glavas, 2016). In this regard, Chaudhry (2019)
suggested that various mediating variables can
explain the association between CSR and employee
work engagement. More specifically, Farrukh
et al. (2020) suggested that future researchers
examine the explanatory role of psychological
ownership and compassion between CSR and
employee work engagement, specifically in the context
of developing economies (e.g., Pakistan). Therefore,
this study investigates psychological ownership and
compassion as explanatory variables through which
CSR activities can increase employees’ work
engagement.
The mediating mechanism can further be supported
with social identity theory (SIT; Tajfel, 1974, 1975)
that the favorable assessment of an organization is
associated with positive employees’ work attitudes
(e.g., Maignan & Ferrell, 2001). For instance,
Shin et al. (2016) argued that CSR could affect
employees’ adoption of socially responsible behavior
within organizations (i.e., compassion at work and
psychological ownership). Compassion at work
is noticing the pain of organizational members,
empathizing with their pain, and acting to display
warmth, affection, and kindness to alleviate that pain
(Dutton et al., 2010. Whereas, psychological ownership
is the feelings of possession among employees for their
organization (e.g., “This is my organization”; Pierce
et al., 1991). Applying SIT, when employees identify
that their organization owns the society and feels the
pain for its betterment, they responds with compassion
and psychological ownership and perform their work
enthusiastically (i.e., work engagement).
This study contributes to the existing literature
in four ways. First, we investigated the association
of perceived CSR with employee work engagement,
which allows us to unfold CSR’s significance to
increase employee work engagement in the workplace
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as employees are the key internal stakeholders of the
organization. Second, the research on CSR perception
and psychological ownership is scarce; we introduce
psychological ownership as a potential employee-level
CSR outcome in the existing literature. Third, drawing
on social identity theory, we suggest compassion
at work and psychological ownership as mediators
explaining the linkage between CSR and work
engagement (see Figure 1). Therefore, we contribute
to the existing literature by developing and testing this
unique perspective. Fourth, this study aims to increase
the generalizability of current findings on CSR and
employee work engagement relationship by using a
diverse sample from a developing economy of South
Asia.
Literature Review and Hypotheses
Development
Corporate Social Responsibility (CSR)
CSR’s concept remained a researchers’ choice for
a decade and is defined in almost 37 different ways
(Dahlsrud, 2008), which indicates that CSR has not yet
any single definition despite diverse literature (Glavas
& Kelley, 2014). For instance, according to Turker
(2009a), CSR is a “corporate behaviors that aim to
affect stakeholders positively and that go beyond its
economic interests” (p. 189. According to Sarkar and
Searcy (2016, p. 1433), “CSR implies that firms must
foremost assume their core economic responsibility
and voluntarily go beyond legal minimums so that
they are ethical in all of their activities and that
they take into account the impact of their actions
on stakeholders in society, while simultaneously
contributing to global sustainability.” Farid et al. (2019)
viewed CSR from different perspectives as “context-
specific organizational action and policy that takes
into account stakeholders’ expectations and the triple
bottom line of economic, social, and environmental
performance” (p.3). The definitions, as mentioned
above, have identified CSR as a multidimensional
construct that considers various stakeholders. Thus,
this study followed the stakeholder approach by
considering government, employees, customers, and
social stakeholders such as the natural environment,
future generations, non-governmental organizations,
and society to cover the holistic view of CSR as
suggested by Turker (2009b).
CSR has implications for the psychological and
behavioral outcomes of the employees (Baldo, 2013).
Employees usually participate in day-to-day activities
related to CSR, observe the results, and develop their
perception regarding the entire organizational CSR
approach. The role of employees is vital to define
the extent to which organizations are socially liable.
Aguinis and Glavas (2012) noted that employees
should be involved in participating and facilitating the
CSR programs to allow the organization to execute
the CSR events as primary stakeholders successfully.
Likewise, if employees might get aware of these CSR
activities, their perception of CSR might directly
and strongly influence their reaction toward CSR
initiatives (Gangone & Gănescu, 2014). Findings of
existing research have revealed that organizational
attractiveness is also increased through favorable
evaluation of CSR initiatives by the employees (Tsai
et al., 2014).
Employee Work Engagement
Employee work engagement is defined as
“harnessing of the organization members’ selves
to their work roles; in engagement people employ
and express themselves physically cognitively and
emotionally during role performances” (Kahn,
1990, p. 694). According to Mone et al. (2018, p. 4),
employee work engagement is “the condition of an
employee who feels involved, committed, passionate,
and empowered and demonstrates those feelings in
his work behavior.” Organizations need to develop
the relationship between employer and employee
through various factors that boost employee work
engagement, such as working environment, bonuses,
adequate work-life balance, job satisfaction, appraisal,
successful communication, and career progression,
to improve employee work engagement (Robinson,
2010). This study used employee work engagement
as a measure of employee attitude, which influences
the different valued outcomes in the organizations,
such as enhanced economic performance (Galant
& Cadez, 2017), increased job satisfaction, reduced
turnover intentions (Lu et al., 2016), enhanced affective
commitment (Nazir & Islam, 2017), and improved job
performance (Ismail et al., 2019).
However, the current study adopted Kahn’s (1990)
definition of employee work engagement because
numerous features like the cognitive, physical, and
emotional aspects provide an accurate description of
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employee work engagement. If employees are well
engaged, then they contribute to the company’s growth
and perform their job excellently by understanding the
company’s values and goals.
CSR and Employee Work Engagement
Organizations are facing a challenge to retain and
engage talented employees (Keller & Meaney, 2017).
Existing studies have found more job satisfaction
amongst the employees working in companies that
fulfill their ethical and social responsibilities (Glavas
& Kelley, 2014). In contrast, studies have also reported
disillusionment, hopelessness, and frustration among
employees due to unethical organizational behavior
(Andersson, 1996). The ethical temperament of an
organization can be signified through involvement
in CSR, which reflects the trustworthiness of that
organization (Hansen et al., 2011). The significance
of stakeholders for an organization is signaled to the
employees through organizational involvement in CSR
(Rupp et al., 2018). Drawing on the SIT, employees’
higher-order needs such as meaningful existence and
belongingness can be presumably satisfied through
CSR by caring for the external stakeholders, that is,
customers, environment, government and society, and
internal stakeholders, including employees (Rupp et al.,
2006). Therefore, as an additional engagement source,
CSR increases the experienced meaningfulness among
employees when their morality and relational needs are
catered through CSR (Aguinis & Glavas, 2019). CSR
can be used as a tactic to motivate employees toward
a greater purpose (Rosso et al., 2010). Similarly, a
consciousness of organizational identity is increased,
and their self-concept is improved among employees
when they know that they serve a greater purpose
(Grant et al., 2008).
Employee work engagement might increase when
the organization’s CSR practices resonate with their
feeling of accountability for personal actions (Afsar
et al., 2020). This CSR- employee work engagement
linkage might be explained through the lens of social
learning theory (Bandura, 1977). It is argued that role
models enhance the learning of norms and behavioral
expectations. Employees tend to show intentions to
be involved in actions that can make life better for
everyone and feel responsible. When organizations act
as global citizens and role models, they take various
CSR initiatives to improve society’s environment
and uplift. The employees will follow the behaviors
of leaders and management in their actions in the
organizations, where socially responsible actions
are emphasized, valued, and regarded as normative
standards of conduct, and hence become more
engaged. Employees’ positive attitudes heighten when
an organization displays genuine concerns for the
environment and society. This may result in increased
engagement levels due to enhanced employees’ purpose
at work and a sense of meaningfulness (Klimkiewicz
& Oltra, 2017).
Engaged employees exert effort to achieve the
organization’s mission, goals, objectives, and good
corporate reputation because they are enthusiastic,
energetic, and fully absorbed in work (Harter et al.,
2002). The perception of CSR programs and actions of
an organization for taking care of the society and planet
result in strong identification of employees with the
organization. The employees may engage in behaviors
aligned with the organizational goals due to increased
intrinsic motivation through this perception of pride,
prestige, and value (Klimkiewicz & Oltra, 2017).
They bring their true selves to increase organizational
effectiveness because they want to maintain this
reputation and image. Hence, employees are likely
to display greater engagement and bring more energy
when they perceive organizational involvement in CSR
initiatives as favorable (Afsar et al., 2020).
The studies investigating the association between
CSR and employee work engagement are still at the
early stages, particularly in developing economies such
as Pakistan. Self-determination theory influenced the
intrinsic motivation of engagement and was confirmed
as a predictor of employee work engagement (Wang
et al., 2017). Contrarily, a study on Portugal’s private-
sector employees revealed that the dimensions of
employee work engagement were insignificantly
predicted by the external and internal CSR (Ferreira
& de Oliveira, 2014). The previous studies have also
found a positive association of CSR with employees’
attitudes similar to employee work engagement, such
as job satisfaction (Duarte et al., 2019; Singhapakdi
et al., 2019) and organizational commitment (Rodrigo
et al., 2019), which provide additional support for an
association of CSR with employee work engagement.
Accordingly, we hypothesized that:
H1: CSR has a positive and significant influence
on employee work engagement.
3
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The Mediating Role of Compassion at Work
Compassion has a long association with
sociology, medicine, and religion. Still, organizational
psychologists have recently paid attention to
compassion from the organizational context in the
micro-OB literature, whereas macro-OB literature has
predominantly discussed CSR for decades (Frost et al.,
2006). The role of compassion is pivotal to lessening
co-workers’ pain in organizational life (Dutton et
al., 2002). Researchers have agreed that compassion
involves caring for others through behavior and
communication and sympathetic awareness of others’
pain and sorrow (Moon et al., 2014). Kornfield (2009)
defined compassion as “the heart’s response to sorrow”
(p. 326). According to Kanov et al. (2004), compassion
is a relational process that comprises feeling the pain
of colleagues, sympathizing with a person suffering
from the pain, and eliminating that pain. Moon et al.
(2014) also defined “compassion as a response to the
suffering of another that involves an individual seeing
with the eyes of others, hearing with the ears of others,
feeling with the heart of others, and taking action in
a way which reveals his or her compassion” (p. 52).
The research has revealed that the organization’s
actions make sense of the employees, which affects
their attitudes and behaviors in the workplace
(Cropanzano et al., 2001). The various attitudinal and
behavioral responses of employees are evoked by the
CSR perception (Rupp et al., 2006). Organizational
members have extra favorable identity association
with an organization, which positively evaluates their
organization because of CSR based on the social identity
perspective, which develops intrinsic motivation
among members to increase their involvement in
discretionary actions like compassion (Zedeck,, 2011).
Based on the social identity theory, intrinsic motivation
to develop organizational identity is further triggered
by the CSR perception among employees (Ellemers et
al., 2004). SIT explains that categorizing individuals
into groups, and people cognitively identify others and
themselves (Tajfel, 1975). Employees want to become
a member of those groups having a positive identity to
increase their respected imaginings and are interested
in showing their organization’s identity (Ellemers et
al., 2004). Employees would become a member of
the in-group at the expense of the out-group based on
social categorization. This identification with their
organization results in prosocial behaviors within the
organization, such as compassion (Dutton et al., 2010).
The past research has confirmed that employees’
work attitudes are affected by their favorable evaluation
of the organization based on the social identity theory
(Maignan & Ferrell, 2001). Hence, corporate reputation
is improved through CSR (Maignan & Ferrell, 2004).
Individuals exhibit positive attitudes and behaviors
in the workplace, such as compassion, because they
feel proud to identify with their organization due to
CSR engagement (Dutton et al., 1994). Contrarily,
employees become hesitant to identify themselves
with the organization and even leave the organization
when they perceive an organization as an uncaring
place and find non-social support from colleagues
(Ellemers et al., 2004). Employees are more likely
to become members of the out-group and leave the
in-group when members’ identity and organizational
identity are undermined due to a negative perception
of the organization (Tajfel & Turner, 1979). Thus, the
tendency to be involved in voluntary behaviors in the
workplace will decrease, such as compassion (Meyer &
Allen, 1997). Therefore, we expect that CSR perception
drives compassion at work among employees.
The previous studies reveal that CSR activities
with various employee outcomes such as affective
organizational commitment and creativity are mediated
by compassion at work (Abdelmotaleb et al., 2018).
Moreover, social identity theory (Tajfel, 1974) proposes
that a firm’s CSR-specific activities lead to increased
motivation to maintain a positive corporate social
reputation and pride among employees, profoundly
influencing their helping and caring behavior (Dutton
et al., 2010). This caring and helping behavior (a
reflection of compassion), due to its other-oriented
nature, leads employees to work together for the sake
of collective benefits and hence enhances employee
engagement (Nazir & Islam, 2020). Based on the
arguments mentioned above, we can hypothesize that:
H2: Compassion at work mediates the positive
association between CSR and employee work
engagement.
The Mediating Role of Psychological Ownership
As noted by Etzioni (1991), ownership is a
“dual creation, part attitude, part object, part in the
mind, part real” (p. 466). According to Pierce et al.
(2003), legal ownership differs from psychological
ownership. For example, psychological ownership
is generally featured as a self-derived perception of
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the individual, while legal ownership is endorsed by
the law and recognized by others. The others do not
formally recognize psychological ownership, and
it is the individual in which boundaries related to
ownership are determined and feelings of ownership
are manifested. Psychological ownership “relates to
employees’ feelings of possession to the organization
as a whole; e.g., this is my organization” (Van
Dyne & Pierce, 2004, p. 442). The previous studies
have found various factors that may increase the
psychological ownership of employees. For instance,
transformational leadership positively predicts
psychological ownership (Avey et al., 2009), which
in turn negatively related to their intention to quit
(Bernhard & O’Driscoll, 2011), and positively
predicted employee job attitudes, including job
satisfaction and organizational commitment (Bernhard
& O’Driscoll, 2011), and organizational citizenship
behaviors (Park et al., 2013). Liu et al. (2012) found
participative decision-making as a strong predictor of
psychological ownership among employees. Studies
have also found that employee participation strongly
influences their psychological ownership in profit-
sharing schemes or stock ownership (Chi & Han,
2008). Employee autonomy also positively affects
psychological ownership, which, in turn, partially
mediated the association of psychological ownership
with organizational commitment and job satisfaction
(Mayhew et al., 2007).
The respective organizations’ social standing is
vital for the employees to evaluate their self-worth
(Aberson et al., 2000). Employees would become
more identified with their organizations when they
perceive that employing organizations have attractive
and distinctive practices, characteristics, attributes,
and values in contrast to competitive organizations
(Dutton et al., 1994). When organizations enforce
the policies and practices that protect stakeholders’
interests, it may enhance employees’ self-concept and
self-esteem (El Akremi et al., 2018). This responsible
and distinctive behavior of an organization increases
employees’ pride, and they also respect and value the
fulfillment of the organization’s responsibility toward
the society in front of other stakeholders. The tendency
to become identified with the organization among
employees might diminish when organizations do
not fulfill their social obligations because nowadays,
stakeholders in general and particular in society, are
well aware of the environmental and social problems
(Cheema et al., 2020). Studies have also found that
when employees believe that their organizations fulfill
all their stakeholders’ obligations and are genuinely
responsible (i.e., CSR), they identify themselves
with their organizations (Farooq et al., 2017). Hence,
perceiving themselves as members of the socially
responsible organization, employees’ organizational
ownership may be enhanced (Korschun et al.,
2014). Therefore, we argue that the perception of
CSR increases the psychological ownership of the
organization among employees.
Psychological ownership comprises cognitive and
affective elements (Pierce & Newstrom, 2003), which
satisfice social and genetic human motives (Pierce
et al., 2001). Thus, psychological ownership serves
belongingness, efficacy, and self-identity needs (Dai et
al., 2020) and is mostly seen as encouraging employees
towards tasks (Brown et al., 2014). The need for
efficacy and belongingness drives the individual from
identifying with a group or organization. Collective
belongingness enhances the feelings of safety among
the individual as a member of the group. Self-efficacy
increases employees’ self-identity, and the level
of uncertainty is also decreased that an individual
attributes to oneself due to self-categorization
(Ashforth et al., 2008). Hence, employees facilitate the
company to attain its value and objectives by engaging
in their work. In a most recent study, Dai et al. (2020)
noted that psychological ownership positively affects
employees’ work engagement. However, Sieger et
al. (2011) suggested examining the mediating role of
psychological ownership. Therefore, drawing upon
SIT, we hypothesize.
H3: Psychological ownership mediates the
positive association between CSR and
employee work engagement.
Methods
Sample and Procedure
We collected data from the employees working
in a large life insurance company located in Lahore,
Pakistan. The company consists of 8,000 direct
employees and are involved in various CSR initiatives.
We visited the regional office of the company and had
a meeting with the regional manager. The manager was
explained the objectives of the study, and permission
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was obtained. As we used simple random sampling
to select a sample of 480 employees (as we followed
the criteria of Jackson (2003) for having 20 responses
against each item, i.e., 24*20 = 480), therefore, the
regional manager, after contacting with their HR
department shared the email IDs of selected 480
employees (these include branch managers, assistant
branch managers, team manager, senior relationship
officers, and relationship officers).
We approached 480 employees via email, where
the link to Google form (i.e., questionnaire) was
shared with them. The questionnaire is comprised of
three parts. First, a cover letter was shared with the
information that “the employees’ responses would
be kept confidential and would only be used for the
research.” The second part contains the information
regarding demographical variables (e.g., age, gender,
qualification, and work experience). The third part
of the questionnaire is comprised of 24 questions for
CSR, compassion, psychological ownership, and work
engagement.
The demographical statistics show that 23% of the
participants were female, whereas the rest were males.
Moreover, 36% of the participants had ages between
26–30 years, 29% had an age between 31–35 years,
24% had an age between 20–25 years, and 12% of the
respondents had an age above 35 years. With respect to
qualification, 52.6% of the participants hold a master’s
degree compared to 31% who possess a bachelor’s
degree. Only 16.7% of participants hold research-
based degrees equivalent to Masters in Philosophy
or above. Moreover, 31% of the participants have
work experience between 1–3 years, 28% have work
experience above five years, 23% of participants have
work experience below one year, and 18% have work
experience between 3–5 years.
Measures
Corporate Social Responsibility (CSR)
The perceived CSR was measured using the 6-item
scale developed by Turker (2009b) with scales anchors
ranging from “1=strongly disagree to 5=strongly
agree.” A sample item is “This organization contributes
to campaigns and projects that promote the well-being
of the society.” The alpha reliability for this scale was
0.84.
Psychological Ownership
The six-items scale developed by Van Dyne
and Pierce (2004) was used to assess psychological
ownership. A sample item includes “I feel a very high
degree of personal ownership for this organization.”
The anchors ranged from “1=never to 5=always.” The
alpha reliability for this scale was 0.91.
Compassion at Work
Lilius et al.’s (2008) 3-item scale was used to
measure compassion. A sample item includes “How
frequently you experienced compassion on the job?”.
The anchors ranged from “1=never to 5=always.”
Alpha reliability for this scale was 0.74.
Employee Work Engagement
Employee work engagement was measured
by using Schaufeli et al.’s (2006) 9-items scale on
Corporate
Social
Responsibility
Work
Engagement
Compassion
Psychological
Ownership
Figure 1. Conceptual Model
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three subdimensions, namely, vigor, absorption, and
dedication. A sample item gauging vigor includes,
“At my work, I feel bursting with energy.” A sample
item assessing dedication includes, “My job inspires
me.” A sample item assessing absorption includes “I
feel happy when I am working intensely.” The anchors
ranged from “1=never to 5=always”. Alpha reliability
for this scale was 0.86.
Control Variables
We control employees’ demographic characteristics,
including gender, age, education, and job experience,
because previous studies have shown that these
variables might influence our variables (CSR and
employee work engagement). Females show more
favorable concerns toward CSR than males (Brammer
& Millington, 2005). Farrukh et al. (2020) also found a
strong association between CSR and women than men.
Research demonstrated that CSR has a low positive
effect on employee satisfaction among younger relative
to older employees (Wisse et al., 2018). Because
more educated employees may be more aware of the
organization’s social responsibility initiatives, educated
employees are more informed of the organizational
responsibilities toward the society, which demonstrates
that education level affects CSR perception (Hansen et
al., 2011). Job tenure within a particular organization
also influences employee behaviors (Chapman et al.,
2005).
Analyses Strategy
SPSS was used to analyze the data. Moreover,
to test the proposed conceptual model, AMOS 24
was used. Initially, the goodness of measures was
established using confirmatory factor analysis (CFA).
Common method variance was evaluated through
Harman’s single-factor analysis. For testing the
conceptual model, all the items in the structural model
appeared to be distinct and fit well with the variables
for which they were developed. Lastly, based on the
analysis through structural equation modeling, the
multiple parallel mediation model was tested.
Results
Primary analysis
We applied structural equation modeling to test the
hypotheses; therefore, the data were first examined for
its basic assumptions (e.g., missing values, outliers,
and normality). The data for the study were collected
through Google Forms, where responding to each
question was mandatory; therefore, no missing values
were identified. The 480 responses were examined
for outliers where we followed Kline (2005) to apply
Mahalanobis distance at P < 0.000, and 13 responses
were excluded from the final study (Islam et al., 2021
; Ahmad et al., 2020). Finally, we followed Byrne’s
(2010) instructions, and the values of kurtosis and
skewness were noted well within the limits of ±3 &
±1, respectively; hence, data were normally distributed
(Islam et al., 2020).
Common Method Variance
The results of Harman’s single factor analysis
(Podsakoff et al., 2003) show that the percentage
of single-factor variance was around 39%, which is
below the traditional value of 50% (Mattila & Enz,
2002). This shows that all the variables were distinct
from each other.
Descriptive Statistics and Correlations Matrix
The values of descriptive results and correlation
are presented in Table 1. The results revealed that
respondents agree regarding their perception of CSR
(M = 3.75), compassion (M = 3.97), psychological
ownership (M = 3.86), and employee work engagement
(M = 4.00). We also noted a positive correlation of CSR
with compassion (r = 0.49, P < 0.01), psychological
ownership (r = 0.64, P < 0.01), and employee work
engagement (r = 0.58, P < 0.01). Similarly, compassion
(r = 0.66, P < 0.01) and psychological ownership (r =
0.52, P < 0.01) also positively correlate with employee
work engagement.
Measurement Model Evaluation
We applied structural equation modeling (SEM)
to access the uni-dimensionality and structural
model. Uni-dimensionality was examined through
confirmatory factor analysis because we used adapted
scales. We used the ≥ 0.50 as the standard value for
factor loading (Hair et al., 2018) and Chi-Square/
Degree of Freedom (X2/df ≤ 3.0), Tucker-Lewis Index
(TLI ≥ 0.90), Comparative Fit Index (CFI ≥ 0.90),
Root Mean Square Error of Approximation (RMSEA ≤
0.08) (Islam et al., 2019; Bagozzi & Yi, 1988; Browne
& Cudeck, 1993; Hu & Bentler, 1999). Given that, the
measurement model (uni-dimensionality) was noted as
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fit, that is, X2/df = 459.66/247=1.86, TLI = 0.920, CFI
= 0.929, and RMSEA = 0.059.
Further, to assess the psychometric properties of
the constructs, discriminant and convergent validities
were computed. We followed Fornell and Larcker
(1981) for average variance extracted (AVE ≥ 0.50)
and composite reliability (CR > 0.70). So, Table 2
shows that AVE and CR values meet these criteria,
and convergent validity is satisfied. The reliability of
the scale is good because CR values are higher than
0.70 of all study variables (Fornell & Larcker, 1981).
The authors also assert that the discriminant validity
will be considered good the values of maximum shared
variance (MSV) and average shared variance (ASV)
are less than the value of AVE (Hair et al., 2018). The
discriminant validity is also satisfied, and the values
shown in Table 2 met this criterion.
Hypotheses Testing
Table 3 represents the values of standardized
regression evaluated through the structural model. We
run the model at 2000 bootstraps with 95% confidence
to access the upper and lower boundary. First, we
noted a significant direct effect of perceived CSR
on employee work engagement (β = 0.18, P < 0.01),
compassion (β = 0.49, P < 0.01), and psychological
ownership (β = 0.64, P < 0.01). These results are
according to the suggested hypothesis; therefore, H1
is accepted. Second, we identified a significant indirect
effect of perceived CSR on employee work engagement
Table 1
Descriptive and Correlation Statistics
Variables M SD 1 2 3 4 5 6 7 8
1 Age – – –
2 Gender – – 0.29** –
3 Qualification – – 0.09 -0.14* –
4Experience – – 0.62** 0.23** 0.11 –
5Corporate Social
Responsibility 3.75 0.79 0.08 0.08 -0.08 -0.09 (0.84)
6Psychological
Ownership 3.86 0.87 0.20** 0.16* -0.13 0.02 0.64** (0.91)
7Employee Work
Engagement 4.00 0.64 0.14* 0.13* -0.15* -0.04 0.58** 0.66** (0.81)
8Compassion 3.97 0.74 0.04 0.16** 0.04 -0.09 0.49** 0.52** 0.66** (0.74)
Note: ** P < 0.01, * P < 0.05
Table 2
Goodness of Measures
Variables AV E CR MSV ASV
CSR 0.554 0.882 0.40 0.32
Compassion 0.704 0.934 0.42 0.36
Psychological Ownership 0.482 0.892 0.43 0.40
Work Engagement 0.662 0.855 0.43 0.31
Note: “AVE = Average Variance Extracted, CR = Composite Reliability, MSV = Maximum Shared Value,
LASV = Average Shared Square Variance”
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through compassion (β = 0.20, P < 0.01, LL = 0.131,
UL = 0.274) with no zero values in upper and lower
boundaries. Similarly, we identified a significant
indirect effect of perceived CSR on employee work
engagement through psychological ownership (β =
0.22, P < 0.01, LL = 0.167, UL = 0.358) with no zero
values in upper and lower boundaries. These results
support suggested hypotheses H2 and H3, respectively.
Discussion
This study’s primary objective is to investigate
the influence of perceived CSR on employee work
engagement through compassion at work and
psychological ownership as mediators. The findings
are in accordance with our expectations that CSR is the
strong predictor of employee work engagement, and
through both paths as well. We found that compassion
at work and psychological ownership work partially
mediate the indirect association between CSR and
employee work engagement. These findings are
consistent with previous studies by suggesting that
employee work engagement increases in response
to CSR perception because CSR serves as a driving
force for employees to be engaged in their work
(Chaudhary, 2019). Lu et al. (2020) also confirmed
a positive linkage between CSR and employee work
engagement via mediating effects of procedural justice
and distributive justice. Farrukh et al. (2020) developed
a model based on the social exchange theory and theory
of engagement, which links CSR with employee work
engagement. They confirmed the association between
these constructs, and this association was stronger in
women than men. Based on the social identity theory,
we suggest that when organizations behave ethically
and show concern for stakeholders, it increases the
sense of pride and level of organizational identity
among employees, which results in improved employee
work engagement. CSR also fulfills the individual
needs for self-enhancement and enhances the self-
concept, which fosters employee work engagement.
Self-determination theory was also a predictor of
employee work engagement (Wang et al., 2017).
We also noted a strong positive relationship of
CSR activities with compassion and psychological
ownership. The positive relationship of CSR perception
with compassion at work implies that CSR actions
showing concerns for others such as the environment,
future generations, and society provoke the benevolent
signal to employees that their organization is concerned
about other people, and employees reciprocate
by showing concerns for others in the workplace.
Employees are involved in discretionary behaviors
such as compassion at work, feel others’ pain, and
try to eliminate that pain through communication and
behavior. Similarly, the positive impact of CSR on
psychological ownership implies that CSR activities
related to the protection of the natural environment,
creating a better life for future generations, supporting
the NGOs working in problematic areas, and overall
participation in the projects for the well-being of society
Table 3
Hypotheses Testing Through Bootstraps
Relations βSE PBootstraps @ 95%
LLCI ULCI
CSR→Employee Engagement 0.18 0.047 0.00
CSR→Compassion 0.49 0.052 0.00
CSR→Psychological Ownership 0.64 0.054 0.00
Compassion→Employee engagement 0.41 0.041 0.00
Psychological ownership→Employee Engagement 0.35 0.039 0.00
Indirect effects
CSR→CompassionàEmployee Engagement 0.20 0.00 0.131 0.274
CSR→Psychological ownership→Employee Engagement 0.22 0.00 0.167 0.358
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provoke a positive reaction among the employees and
non-employees as well (Farooq et al. 2014). This
organizational investment in community development
results in improved corporate reputation (Brammer
& Millington, 2005). Therefore, organizational
involvement in CSR activities increases the sense
of belongingness among employees. They have no
legal ownership in the organization, but CSR actions
cultivate an enhanced sense of belongingness in the
form of psychological ownership, and employees feel
like the organization’s owners.
The concept of CSR is still in its fancy in developing
countries, even though it has become a modern concept
(Farooq et al., 2014). The strong association of
CSR with psychological ownership and compassion
indicates that people from South Asia acknowledge
the CSR initiatives towards various stakeholders, such
as community development, environment, and future
generations, compared to the studies conducted in the
Western context. A possible justification could be the
generally high level of CSR in the Western countries
in contrast to South Asia (Krishnamurthy et al., 2007),
which reflect that socially responsible companies
successfully develop a positive image in the mind of
people. This results in an increased overall corporate
reputation (Farooq et al., 2014).
Based on the social identity theory, we suggest
that when organizations behave ethically and show
concern for stakeholders, employees experience
more compassion at work from their supervisor and
colleagues, which results in improved employee work
engagement. CSR also fulfills the individual needs
for self-enhancement and improves employees’ self-
concept, which fosters employee work engagement.
This increased sense of belongingness among
employees results in increased engagement in the
workplace. As a result, they feel more energetic,
enthusiastic, and get involved in work activities. When
employees are more engaged in their work, they may
ultimately contribute toward achieving organizational
goals that increase organizational effectiveness, such
as a firm’s value, competitiveness, and financial
performance.
Theoretical Implications and Contribution
Our study advances the existing literature on
CSR and employee work engagement in many ways.
First, this research increases our understanding of the
linkage between CSR and employee work engagement
by developing and testing the multiple mediation
mechanism. This study discussed important and
desired employee outcomes from the organizational
perspective, such as psychological ownership,
compassion at work, and employee work engagement.
This study further extends the theory that CSR strongly
predicts psychological ownership, compassion at work,
and employee work engagement. The previous studies
in Pakistan have used the social exchange perspective
and theory of engagement (Cheema et al., 2020; Farooq
et al., 2014; Story & Castanheira, 2019) to explain the
relationship between CSR and employee outcomes,
that is, employee work engagement. This study used
the social identity theory to develop and demonstrate
the underlying mechanism that provides useful insights
for using a social identity framework to understand the
CSR and employee level outcomes relationship.
Second, this study extends existing research
by developing and testing an underlying mediation
mechanism to strengthen further our understanding of
how CSR fosters employee work engagement because
scant studies discussed the intervening mechanism
between these constructs (Chaudhary, 2019). The
focus of previous studies was on investigating the
direct association between CSR and employee work
engagement (e.g., Al Amri et al., 2019); further studies
were required to understand the mechanism that
explains the process of how CSR impact the micro-
level or employee outcomes (Wang et al., 2015).
Third, previous studies have discussed various
employee-level outcomes of CSR such as well-being
(Su & Swanson, 2019), intentions to quit (Ouakouak
et al., 2019), innovative work behavior (Afridi et al.,
2020), creativity (Tong et al., 2019), organizational
commitment and job satisfaction (Story & Castanheira,
2019), pride and embeddedness (Ng et al., 2019).
As one of the positive organizational behaviors,
psychological ownership is receiving increasing
attention within organizations, and it is an important
predictor of employees’ attitudes, behaviors, and
performance (Avey et al., 2009; Park et al., 2013). To
the best of our knowledge, psychological ownership
has not been discussed in the CSR literature earlier. We
introduce psychological ownership as an employee-
level consequence of CSR in CSR and OB’s existing
research, which explains the CSR- employee work
engagement linkage.
Fourth, the previous studies have been conducted
in the Western context, underscoring the need for
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evidence from emerging economies to confirm
relationships’ nature. South Asian companies have
not embraced the concept of CSR and its potential to
improve the company’s bottom line and individual-
level outcomes due to a lack of empirical evidence
(Chaudhary, 2019). This study provides evidence
regarding CSR’s effectiveness to improve employee-
level outcomes in the context of a developing economy,
that is, Pakistan from South Asia. This study also
increases the generalizability of existing studies on
CSR and employee work engagement conducted in
the Western context.
Fifth, the studies on CSR conducted in Pakistan
have focused on various companies such as oil and gas,
electronics, banking, and manufacturing (Farrukh et al.,
2020), pharmaceutical (Lu et al., 2020), hotels (Afridi
et al., 2020; Cheema et al., 2020), and organizations
involved in various business including education,
real estate management, and construction (John et
al., 2017). This study investigated CSR in the unique
context of the insurance industry of Pakistan.
Managerial Implications
This research suggests several implications
for managers. First, it has become a challenge
for organizations to retain and engage talented
employees. Managers can use CSR activities as
a talent management strategy to attract and retain
talented employees. Therefore, organizations need to
incorporate the CSR practice in day-to-day operational
activities, which has implications for the different
organizational processes such as employee initiatives,
recruitment and selection, training and development,
and performance management (Morgeson et al.,
2013). Second, the disengagement of employees is
causing severe financial losses for the organizations.
Hence, organizations can use CSR to improve
employee outcomes such as psychological ownership
and compassion at work, which, in turn, increases
employee work engagement. CSR initiatives can
increase engagement in their work instead of wasting
time surfing and discussing with co-workers. Employee
work engagement can lead to superior individual
performance, which results in improved departmental
and organizational performance. Therefore, CSR can
improve the organization’s financial performance
and minimize the losses faced by the organizations
due to employee disengagement. The company’s
improved financial performance can protect the
interests of internal stakeholders such as shareholders
and employees and external stakeholders, including
customers, government, NGOs, and society. Third, the
sustainability of the business organizations is defined
by economic performance, and now organizations
have to focus on the triple bottom line, including
environmental and social performance, along with
financial performance. If business organizations
focus on CSR, it can lead to improved economic
conditions of organization and society and better
natural environment and social conditions, which
all are necessary for the prosperity of any society
or country. Fourth, organizations need to develop a
mechanism to communicate the CSR initiatives inside
the organization to create awareness of the employees
regarding CSR (Peterson, 2004), instead of only
communicating with the external stakeholders.
Limitations and Future Direction
Despite the several theoretical and practical
implications, this study also has limitations. First,
this study used CSR measures focusing on external
stakeholders such as society, natural environment, and
future generations rather than internal stakeholders,
that is, employees. Second, this study adopted a cross-
sectional design which does not explain the causality
between the variables. Future studies should collect
data through a longitudinal approach. Third, this study
focused on a large insurance company from Pakistan’s
insurance sector; the applications of finding in other
industries require fine-tuning. Fourth, future studies
can investigate the thriving at work, perceived insider
status, and creative-self efficacy as mediators to further
explain the underlying mechanism between CSR and
employee outcomes. Fifth, we also suggest a cross-
cultural comparison to enhance the generalizability
of the findings.
Declaration of ownership:
This report is our original work.
Conflict of interest:
None.
Ethical clearance:
This study was approved by our institution.
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