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Received: 1 December 2017 Revised: 15 January 2018 Accepted: 1 February 2018

DOI: 10.1002/csr.1511

RESEARCH ARTICLE

Boosting employee retention through CSR: A configurational


analysis
Leemen Lee | Li‐Fei Chen

Department of Business Administration, Fu


Jen Catholic University, New Taipei City, Abstract
Taiwan Internal stakeholders' perception of corporate social responsibility (CSR) plays a cru-
Correspondence
cial role for organizations in pursuing innovative, sustainability‐based business
Li‐Fei Chen, Professor, Department of
Business Administration, Fu Jen Catholic models. The majority of research on CSR has examined its effects on organizations'
University, No 510, Zhongzheng Rd, Xinzhung
financial performance or external stakeholders' behavior toward CSR. However, little
Dist., New Taipei City 24205, Taiwan
Email: 075033@mail.fju.edu.tw attention has been devoted to employees' behavior toward CSR. The current study
investigated how organizations' CSR initiatives and the fulfillment of employee job
Funding information needs (existence, relatedness and growth, or ERG) affect employees' job satisfaction
Ministry of Science and Technology, Taiwan
and retention intention. Methodologically, the study applied the fuzzy‐set qualitative
comparative analysis method to capture the integrative effects of explanatory factors
on the outcomes by examining the case of a leading chain department store in Asia.
The results revealed that an organization's efforts on CSR could enhance the fulfill-
ment of employees' ERG needs. Moreover, the perceived CSR initiatives could gener-
ate positive effects on employees' satisfaction and retention intention by fulfilling
employees' ERG needs.

KEY W ORDS

corporate social responsibility (CSR), fuzzy‐set qualitative comparative analysis (fsQCA), job needs,
job satisfaction, retention intention, sustainability business model

1 | I N T RO D U CT I O N and that the relationship between CSR and internal stakeholders has
received relatively little scholarly attention. Bonini, Koller, and Mirvis
Corporate social responsibility (CSR) has received substantial attention (2009) reported that CSR can enhance employee morale and reduce
from scholars and practitioners. CSR is considered a powerful means employee turnover. Peloza (2009) posited that employees play a medi-
of achieving the Sustainable Development Goals (SDGs), particularly ating role in the relationship between CSR and organizational perfor-
when it is employed to address pressing global issues such as climate mance. Peloza (2009) argued that CSR activities can not only
change and peak oil theory. Scholars have suggested that CSR contrib- increase employees' job satisfaction, which contributes to higher pro-
utes to sustainable development (Brammer, Millington, & Rayton, ductivity and lower retention costs, but also make the organization
2007; Kim, Lee, Lee, & Kim, 2010). CSR presents a win–win scenario, more attractive to prospective employees, thus reducing hiring costs.
enabling companies to simultaneously increase their profitability and Studies such as those by Bauman and Skitka (2012), Onkila (2015)
produce social benefits. From the perspective of organizational cul- and Zhu, Hang, Liu, and Lai (2014) have considered CSR to be a source
ture, Vilkė (2014) suggested that CSR‐driven practices nurture trust of employee satisfaction because some CSR actions represent a rare
relationships among stakeholders. In addition, sustainability‐based and unique opportunity to positively alter employees' perception of
business models help companies create a trusting environment for companies and engender positive changes in employees' identification
innovation, which leads to the development of long‐term competitive- in, and commitment to, the organizations. In particular, Zhu et al.
ness. Aguinis and Glavas (2012) found that most CSR studies have (2014) found that employee satisfaction plays both mediating and
focused on issues related to external stakeholders of organizations, moderating roles in the relationship between CSR perception and

948 Copyright © 2018 John Wiley & Sons, Ltd and ERP Environment wileyonlinelibrary.com/journal/csr Corp Soc Resp Env Ma. 2018;25:948–960.
LEE AND CHEN 949

employee loyalty. Similarly, Bauman and Skitka (2012) proposed that analysis (QCA), which does not involve controlling contextual variables
employees' psychological needs serve as underlying mechanisms to isolate the net effect of other variables; instead, QCA entails the
connecting CSR and employees' relationships with their companies. use of Boolean algebra rather than linear regression to analyze the
To understand how internal stakeholders react to CSR, Gond, El interplay between contextual and individual factors, leaving room for
Akremi, Swaen, and Babu (2017) emphasized the micro approach to the co‐occurrence of competing relational paths between explanatory
CSR research. The micro view was adopted for two main reasons. variables and outcomes. Cuadrado‐Ballesteros, Martínez‐Ferrero, and
The first reason is that organizations are formed and operated by indi- García‐Sánchez (2017) adopted the fuzzy‐set QCA (fsQCA) method
viduals. The individuals' needs, traits and roles are not homogeneous; to explore the relationships between board structure and CSR perfor-
therefore, individual reactions to CSR policies may vary (Rupp & mance of 471 companies in USA. The results vividly demonstrated a
Mallory, 2015). The other reason lies in needs theory and the internal non‐linear, complex reality.
marketing perspective. On the basis of needs theory, individuals sup- The majority of studies on CSR have examined its effects on
port CSR initiatives with the main motive of satisfying their personal organizations' financial performance or external stakeholders' behavior
needs (Gond et al., 2017). Similarly, Du, Bhattacharya, and Sen toward CSR. Less attention has been devoted to the micro‐level per-
(2015) argued that employees' expectations, motives, views or atti- spective on internal stakeholders (Du et al., 2015; Gond et al., 2017;
tudes are not homogeneous, and heterogeneity is essential for a Lee et al., 2013). In addition, studies using micro‐level approaches
deeper understanding of employee reactions to CSR. For instance, have primarily explored the net effects of the specific causal paths in
an employee's orientation toward work plays a crucial role in or between the individual and organizational levels. The aim of the
employee needs fulfillment. Wrzesniewski, McCauley, Rozin, and current study was to explore the interactive effect of CSR perceptions
Schwartz (1997) proposed three types of work orientation: work as and needs on employees' outcomes, specifically employees' job satis-
a job, work as a career and work as a calling. They suggested that faction and retention intention. In particular, the study applied the
the view of work as a job is more associated with economic needs fsQCA method to capture the integrative effects of explanatory fac-
and rewards. By contrast, the view of work as a career emphasizes tors on the outcomes by examining the case of a leading chain depart-
developmental needs and professional growth. Finally, the view of ment store in Asia.
work as a calling tends to prioritize individual ideological and ethical
needs.
Research also revealed that organizations' CSR initiatives and 2 | L I T E R A T U R E RE V I E W
employees' perceptions of these initiatives vary, and that the
employees' perceptions are as important as the CSR initiatives them-
2.1 | Employee CSR perceptions as they relate to
selves (Aguinis & Glavas, 2012). An individual's subjective perception
of reality has a considerably stronger effect than do objective factual
employee outcomes
circumstances on the individual's behavior and the aggregated organi- CSR is defined as ‘the responsibility of enterprises for their impacts on
zational outcomes. From an internal marketing perspective, the goals society and outlines what an enterprise should do to meet that
are to attract, motivate, develop and retain qualified employees responsibility’ (European Commission, 2011). Sethi (1975) developed
through good job‐product designs that satisfy employees' needs a three‐tier model to describe the three states of social performance
(Berry & Parasuraman, 1992). Fulfilling employees' needs may enhance of corporations: (i) CSR as an obligation to respond to legal and market
job satisfaction and employee retention; by contrast, violating constraints; (ii) CSR as a responsibility to cope with the norms and
employees' expectations may result in unwanted outcomes such as expectations of society; and (iii) CSR as a state of responsiveness to
job dissatisfaction or quitting the job (Du et al., 2015). proactively engage in addressing social needs. Carroll (1979), Carroll
Despite the existence of an increasing number of CSR studies (1991) has proposed a CSR pyramid model that divides CSR into four
using micro‐level approaches (Du et al., 2015; Gond et al., 2017; dimensions or categories: economic, legal, ethical and discretionary.
Lee, Park, & Lee, 2013; Mueller, Hattrup, Spiess, & Lin‐Hi, 2012), Crilly The economic dimension requires that companies be profitable and
(2013) noted that CSR research requires a multilevel, integrative generate economic benefits for their stakeholders, the legal dimension
approach for analyzing the interaction of individual needs and organi- demands that companies obey the law, the ethical dimension calls on
zational context and capturing the complex nature and multiple paths companies to engage in appropriate practices and not cause harm to
of how individuals with heterogeneous needs react to CSR policies society, and the discretionary dimension invites companies to be
and the implementation of these policies. Crilly (2013) argued that tra- good and philanthropic organizations. Bhattacharya, Sen, and
ditional statistical approaches such as multilevel regression methods – Korschun (2008) further emphasized the internal marketing perspec-
wherein researchers partition objectives into groups and analyze tive, proposing that CSR can be used to attract, motivate and retain
within‐group slopes and intercepts as indicators of moderation and employees. Drumwright (1996) revealed that organizations must
mediation – can estimate variance between levels of analysis and consider CSR as a long‐term process for sustainable value so that
identify the effects of each level. Nevertheless, the multilevel regres- their employees may support the CSR policy and believe in the
sion methods are inadequate for capturing the complex, interactive organizations' commitment to social responsibility, rather than a
effects of the perceptions of CSR practices and the satisfaction of ‘green‐wash’ corporate policy.
individual needs on organizational outcomes. Therefore, Crilly (2013) Social identity theory posits that employees tend to identify with
proposed configurational methods such as qualitative comparative organizations that have a positive reputation in their community and
950 LEE AND CHEN

society (Dutton, Dukerich, & Harquail, 1994; Maignan & Ferrell, 2001; that are perceived negatively by employees, this inevitably leads to
Riordan, Gatewood, & Bill, 1997; Sims & Keon, 1997; Viswesvaran & dissatisfaction, thereby impeding the implementation of such
Ones, 2002). As employees perceive that their organizations are gen- strategies.
uinely engaged in CSR, from the social identity perspective, they will
be proud of their organizations; this, in turn, increases the degree to
which they identify with their organizations (Ashforth & Mael, 1989;
2.2 | Employees' psychological needs
Brammer et al., 2007; Turker, 2009). Social identity theory also Although CSR studies have indicated employees' needs for work
suggests that a good CSR reputation contributes to organizational meaningfulness, a sense of belonging, moral standards and organiza-
outcomes such as job satisfaction and lower employee turnover; these tional justice, Bauman and Skitka (2012) emphasized the importance
positive outcomes are a result of favorable evaluations from external of employees' psychological needs in the relationship between
groups such as local communities, friends and family members employees' CSR perceptions and the corresponding organizational
(Lee et al., 2013; Riordan et al., 1997; Turban & Greening, 1997). outcomes. Bauman and Skitka (2012) identified four basic psycholog-
Aguilera, Rupp, Williams, and Ganapathi (2007) suggested that ical needs: the need for security and safety, need for distinctiveness,
CSR can increase employees' tendency to stay in the organization. need for belongingness and need for a meaningful existence. Du
The rationale is that CSR, which is aimed at fostering meaningful and et al. (2015) further highlighted the heterogeneity of employees' psy-
beneficial connections between the organization and society, can chological needs, which help explain why individuals react to CSR dif-
become a mechanism to enhance the employees' sense of belonging ferently. On the basis of needs theory, developed by Maslow (1943),
to the organization. Aguilera et al. (2007) argued that CSR practices McClelland (1965) and Alderfer (1972), Du et al. (2015) identified
require employees to work together, not only for the organizations three dimensions of job needs: instrumental, relational and ideological.
but also for the betterment of society; thus, employees experience a Discussing CSR activities that effectively address employees' psycho-
more meaningful and collaborative work environment, which leads to logical needs, Grant (2012) highlighted the importance of employee
higher job satisfaction. For employees, a meaningful connection with participation in CSR, such as corporate volunteering programs. Grant
their work and a strong sense of belonging correspond to career or (2012) and Wood (2007) have called for employee‐centered
calling orientations toward work. Another rationale lies in employees' understanding and practices of CSR. They suggested that personal
moral standards. Cropanzano, Goldman, and Folger (2003) emphasized experiences are essential for employees to connect with CSR activi-
that employees seek to work for organizations whose practices are ties; in addition, they recommended that well‐designed corporate
consistent with their moral standards. volunteering programs can provide sustained opportunities for
Rupp, Ganapathi, Aguilera, and Williams (2006) proposed the employees to contribute their skills and time for the betterment of
organizational justice perspective, arguing that employees' CSR per- their society and community, thus enabling them to cultivate a posi-
ceptions could affect employees' job satisfaction, organizational com- tive identification with their companies.
mitment and job outcome. According to Rupp, Shao, Thornton, and Needs theory can be traced back to Maslow (1943), who pre-
Skarlicki (2013), the person‐centric approach emphasizes employees' sented human needs in a hierarchy consisting of five broad categories:
perception of organizational justice. Organizational justice refers to physiological, safety, affiliation, esteem and self‐actualization. Alderfer
how an employee judges the behavior of an organization, especially (1972) extended Maslow's hierarchy of needs by reformulating the
if the employee or other constituencies are perceived as being hierarchy into ERG theory (existence, relatedness and growth). The
mistreated (Greenberg, 1987). If the organization mistreats external existence needs include physiological and material safety needs, the
stakeholders, such as consumers, local communities or the environ- relatedness needs cover the needs of interpersonal safety, social
ment, the perception of injustice will be an impediment to the belongingness and esteem and the growth needs involve self‐esteem
employee's identification with the organization (Rupp et al., 2013). and self‐actualization. To connect ERG theory with CSR, Tuzzolino
Similarly, if the organization fails to treat internal stakeholders such and Armandi (1981) emphasized that organizations must create orga-
as employees fairly and justly, the perception of injustice ensues. Fur- nizational settings that foster the satisfaction of individual needs,
thermore, Rupp et al. (2013) indicated that perceived justice is associ- which will result in higher individual‐related outcomes. In summary,
ated with psychological motives such as the need for control, studies have indicated that the satisfaction of employees' psychologi-
relatedness and meaningful existence. Rupp and Cropanzano (2002) cal needs exerts positive effects on individual‐related outcomes, and a
suggested that a good perception of CSR enhances employees' assess- positive perception of CSR may increase the satisfaction of
ment that they have been treated fairly by their organizations and employees' psychological needs.
results in higher job satisfaction. The aim of the current study was to analyze the connection
Informed by social identity theory and the organizational justice between CSR perceptions and employees' outcomes, with a focus on
perspective that employees value meaningful work, sense of belong- employees' psychological needs. Scholars have indicated the mediat-
ing, morality and fairness, CSR researchers posit a positive connection ing role of employees' psychological needs in the relationship between
between employees' perception of CSR practices and individual‐ the employees' CSR perceptions and individual‐related outcomes.
related outcomes. Zhou, Luo, and Tang (2017) even found an Nevertheless, the relationships between CSR perceptions, psycholog-
exponentially positive effect of employee‐perceived CSR on job ical needs and individual‐related outcomes may contain multiple, coex-
satisfaction and affective commitment. Positive employee perception istent paths. Thus the regression method may limit the findings to the
of CSR strategies is crucial. If an organization develops CSR strategies net effects of specific paths, failing to analyze the multiple paths that
LEE AND CHEN 951

may coexist. QCA involves the assumption that different combinations TABLE 1 Respondent characteristics (N = 389)
of conditions of explanatory variables may lead to the same outcomes Attribute Option Frequency Percentage
(Fiss, 2007; Schneider & Eggert, 2014); therefore, the present study
Gender Male 117 30.1
applied the QCA method to explore the integrative effect of Female 272 69.9
employees' CSR perceptions and ERG needs on individual‐related out- Age Under 30 years old 123 31.6
comes such as job satisfaction and job retention intention. The con- 31–40 years old 103 26.5
41–50 years old 103 26.5
ceptual model applied in this study is presented in Figure 1. 51–60 years old 54 13.9
Above 60 years old 6 1.5
Education level High school (or below) 134 34.4
3 | METHODOLOGY Diploma/junior college 54 13.9
Bachelor degree 190 48.8
Graduate degree 11 2.8
3.1 | Sample and data collection Marital status Unmarried or other 242 62.2
Married without children 36 9.3
Launched in 1987 and currently employing 1800 people, the Case Married with children 111 28.5
Company is the largest department store chain in Taiwan. Seniority years Less than 6 months 20 5.1
Headquartered in Taipei, the company owns eight stores in Taiwan 6 months–less than 1 year 41 10.5
1–3 years 57 14.7
and nine stores in mainland China, generating US$14 billion in revenue 4–5 years 28 7.2
in 2016. The company prioritized CSR and won the Asian CSR Awards 6–10 years 42 10.8
11–15 years 53 13.6
2017, the most prestigious award for CSR in Asia, in both health pro- 16–20 years 89 22.9
motion and social empowerment categories. With the intention to Above 20 years 59 15.2
align its CSR activities with human resource policy and to fulfill Seniority position 1 317 81.5
2 30 7.7
employees' job needs, one branch store located in Taipei, Taiwan,
3 13 3.3
cooperated with the researchers to conduct a survey from December 4 28 7.2
2016 to January 2017. This branch store was chosen because it is the 5 1 0.3

largest and it contributed the most revenue. A total of 480 question- Seniority position: (1) Level 1–Level 3 coordinator; (2) Level 4–Level 5
naires were distributed to the internal employees of the branch store, senior coordinator, Level 6 assistant project manager; (3) Level 3–Level 4
deputy division chief; (4) deputy manager/manager, section manager; (5)
453 were collected, and 64 responses were excluded because their
assistant vice president, (senior) vice president.
answers were ‘too good to be true’ – answering ‘strongly agree’
throughout the questions. This yielded a total of 389 effective
responses. Table 1 presents a summary of the respondents' profiles. with anchors ranging from 1 (‘strongly disagree’) to 5 (‘strongly agree’),
was adopted. A pilot test was conducted to ensure the clarity of the
wording. Additionally, to reduce potential risk of common‐method
3.2 | Measurement variance, respondents' anonymity and confidentiality were maintained
The measures used in this study were developed by referencing the throughout the study; the purpose of the study was also clearly stated
measures of CSR perceptions used by Glavas and Kelley (2014) and in the cover page of the questionnaire (Podsakoff, MacKenzie, Lee, &
Lee et al. (2013), the items of job satisfaction and retention intention Podsakoff, 2003). The reliability of the constructs was tested using
used by Du et al. (2015) and the measures of ERG needs used by Cronbach's alpha coefficients, which ranged from 0.802 to 0.922,
Arnolds and Boshoff (2002) and Du et al. (2015). A team of 11 people demonstrating that the measures for each construct exceed Nunnally's
comprising a human resource director, two facilitators, a CSR team of (1978) threshold value of 0.70. Confirmatory factor analysis was con-
four managers from cross functions assigned by the company and four ducted using AMOS 22.0 to verify the convergent and discriminant
researchers finalized the questionnaire. A five‐point Likert‐type scale, validity of the scales. To indicate the degree of the actual correlations

Employee'
Percetion of Fulfillment of Job Employees'
CSR needs Outcomes
- Economics - Existence need - Job satisfaction
- Labor - Relatedness need - Retention intention
- Consumer - Growth need
- Environment

FIGURE 1 Conceptual model


952 LEE AND CHEN

predicted by a model, Hair, Black, Babin, and Anderson (2010) sug- Pflughoeft (2003), the discriminant validity can be verified if none of
gested fit indices such as the chi‐square ratio statistic (χ2/df), the root the confidence intervals of the paired correlations among the devel-
mean square residual (RMSR), the goodness‐of‐fit index (GFI), the oped latent variables includes the value of 1. Table 3 shows a sum-
comparative fit index (CFI) and the root mean square error of approx- mary of the descriptive statistics, pairwise correlations and validity
imation (RMSEA). The thresholds were suggested as χ /df < 3.00, 2
test of the scales. None of the confidence intervals developed include
RMSR <0.05, GFI > 0.90, CFI > 0.90 and RMSEA <0.08 (Hair et al., the value of 1, providing evidence of discriminant validity.
2010). The fit indices for the measurement model in this study were
χ2/df = 1.969, RMSR = 0.030, GFI = 0.902, CFI = 0.969 and
RMSEA = 0.050, all indicating a satisfactory model fit.
3.3 | fsQCA
Table 2 presents the composite reliability (CR), ranging from 0.806 QCA was originally developed by Ragin (1987) to deal with high levels
to 0.922, and the average variance extracted (AVE), ranging from of causal complexity problems with dichotomous (binary) variables
0.582 to 0.798. This result suggests an adequate convergent validity (Rihoux & Ragin, 2009). The main advantage of QCA is that it allows
(Fornell & Larcker, 1981). According to Torkzadeh, Koufteros, and researchers to work with a small or medium‐sized sample, which

TABLE 2 Scale items and construct evaluation (reliability and validity test)

Standardized Cronbach's
Constructs Items factor loadings alpha CR AVE

CSR perception
Economic My company continues to integrate CSR into its daily business operations. 0.786** 0.851 0.833 0.624
My company establishes appropriate risk control mechanisms. 0.774**
My company requires its suppliers to fulfill CSR. 0.810**
Labor My company aspires to provide the best salary level in this industry 0.754** 0.836 0.841 0.638
My company follows the Labor Standards Act and respects human rights. 0.817**
My company has consultation and communication systems for both 0.823**
employers and employees (such as meetings, staff feedback email,
CSR website, etc.)
Consumer My company exhibits a high regard for customers and maintains industry 0.859** 0.910 0.910 0.770
leading customer service standards.
My company is committed to selling products that follow the laws, rules 0.898**
and regulations to customers.
My company provides correct information about product and marketing 0.876**
activities to customers.
Environment My company continues to conduct environmental friendly activities. 0.863** 0.898 0.900 0.750
My company adopts digital technologies to reduce environmental impact. 0.849**
My company propagates and promotes the concept of environmental 0.885**
protection.
Employees' job needs
Existence The higher my company's operating performance, the better pay I can get. 0.773** 0.869 0.866 0.684
The company gives employees a reasonable and fair salary (including fixed 0.858**
salary, allowances and bonuses, etc.)
The better my job performance, the better salary I can get. 0.847**
Relatedness My immediate supervisor will give me timely supervision and feedback 0.727** 0.869 0.874 0.701
based on my job performance.
The company has strong interdepartmental teamwork in the workplace. 0.894**
My company encourages cross‐team resource sharing and 0.880**
knowledge exchange.
Growth I feel very happy to work at this company every day. 0.882** 0.922 0.922 0.798
I feel a sense of accomplishment from my job. 0.905**
I can make full use of my abilities and skills in my job. 0.892**
Employees' outcomes
Satisfaction Overall, I am pleased with my work. 0.917** 0.918 0.919 0.791
My company is a good place to work. 0.884**
I would recommend this company as a good place to work. 0.866**
Retention intention I can handle my job very well. 0.708** 0.802 0.806 0.582
I plan a long‐term career development in this company. 0.804**
Even if other companies provide similar positions (salary, title, and 0.773**
job content), I will choose to stay in this company.

**p < 0.001; CR, composite reliability; AVE, average variance extracted.
LEE AND CHEN 953

usually suffers from the problem of being too small to draw conclu-

3.943 0.883 0.646** (0.54, 0.74) 0.699** (0.60, 0.78) 0.602** (0.50, 0.70) 0.621** (0.53, 0.71) 0.752** (0.67, 0.83) 0.714** (0.63, 0.79) 0.832** (0.77, 0.89) 0.853** (0.79, 0.90)
sions using traditional quantitative methods (Ragin & Rihoux, 2004).
Ragin (2008) adopted the concept of fuzzy set theory to develop the
Satisfaction fsQCA method, which allows continuous and interval variables in the
models. A fuzzy set is viewed as a continuous variable intentionally
calibrated to indicate degree of membership in a specified set (Ragin,

3.980 0.816 0.689** (0.58, 0.78) 0.797** (0.72, 0.86) 0.664** (0.57, 0.75) 0.707** (0.62, 0.77) 0.820** (0.75, 0.88) 0.785** (0.72, 0.84) 0.810** (0.75, 0.86)
2008). The causal configurations and the outcomes in question need
to be in the form of fuzzy sets with membership values, so as to
Growth need

explain the outcomes by describing the degree to which causal config-


urations are present (Ragin, 2008).
The fsQCA method involves five steps: (i) modeling causal config-
urations and potential outcomes; (ii) calibrating causal configurations
3.816 0.862 0.611** (0.53, 0.69) 0.718** (0.63, 0.79) 0.610** (0.53, 0.69) 0.625** (0.53, 0.71) 0.782** (0.70, 0.84) 0.818** (0.75, 0.88)
Relatedness need

and the outcomes in question; (iii) constructing the truth table; (iv)
analyzing the truth table; and (v) evaluating and interpreting the
results (Leischnig, Henneberg, & Thornton, 2014). Calibration consists
of transforming variables into fuzzy variables. The variables are
assigned values ranging from 0 to 1, according to the degree of mem-
3.799 0.934 0.689** (0.61, 0.76) 0.772** (0.70, 0.84) 0.654** (0.57, 0.73) 0.679** (0.60, 0.75) 0.785** (0.71, 0.85)

bership. After the data have been calibrated, the next step is to con-
Existence need

struct a truth table consisting of all possible combinations of causal


set. For k causal sets, the truth table will contain 2k rows (Hsiao, Chen,
Chang, & Chiu, 2016). Two metrics, consistency and coverage, are
used to measure the parameters of fit. Consistency is the ratio of
the number of cases in which the configuration produces the outcome
3.973 0.957 0.580** (0.47, 0.69) 0.809** (0.73, 0.88) 0.564** (0.46, 0.66) 0.559** (0.45, 0.67)

to the number of cases with the configuration. In general, the higher


the consistency, the stronger the set relationship (Elliott, 2013). Cov-
Environment

erage is the ratio of the number of cases that contain the configura-
tion to the number of cases in which the outcome is present.
Coverage is similar to R‐square in the regression model, representing
4.098 0.839 0.839** (0.78, 0.89) 0.796** (0.72, 0.87) 0.829** (0.77, 0.88)

how much of the outcome can be explained by each solution configu-


**P < 0.001; Confidence intervals of the paired correlations among the latent variables in parentheses.

ration and by the solution as a whole (Woodside, 2013). This study


applied the fsQCA method to capture the integrative effects of
Consumer

explanatory factors on the outcomes by examining the case of a lead-


ing chain department store in Asia.
4.204 0.759 0.870** (0.81, 0.92) 0.790** (0.71, 0.86)

4 | A N A L Y S I S A N D RE S U L T S
Descriptive statistics, correlations, and discriminant validity

Labor

4.1 | Implementation of fsQCA


Before applying the fsQCA method, the raw data need to be trans-
3.818 1.016 0.819** (0.75, 0.88)

formed into set membership scores ranging between 0 (full non‐mem-


bership) and 1 (full membership). The direct calibration method (Ragin,
Economic

2007), which entails using estimates of the log odds of full member-
ship, was used to calibrate the data. Therefore, the three anchors are
the threshold for full membership, the threshold for full non‐member-
4.020 0.831

ship and the crossover point, which must be determined. Generally, a


Mean SD

membership of 0.95 or greater suggests an item that is ‘fully or nearly


fully in’ the set, whereas a membership of 0.05 or lower represents an
item that is ‘fully out or nearly fully out’ of the set. The crossover point
Employees' outcomes

Retention intention

indicates cases that are neither in nor out of the set. In addition, a
Relatedness need
Employees' needs
Existence need

crossover point with a membership score of 0.5 denotes cases with


CSR perception

Growth need
Environment

Satisfaction
Consumer

maximum vagueness (Hsiao et al., 2016). The full membership thresh-


Economic

old and the full non‐membership threshold were set at the 95th per-
TABLE 3

Labor

centile and 5th percentile of the corresponding construct,


respectively. The crossover point was set as the average value of the
954 LEE AND CHEN

TABLE 4 Three anchors to structure calibration for conditions and outcomes

Anchors Threshold for Crossover Threshold for full


Variables full membership point non‐membership

Perception Economics 5 4.02 2.75


of CSR Labor 5 4.02 2.75
Consumer 5 4.02 2.75
Environment 5 4.02 2.75
Fulfillment Existence need 5 3.86 2.44
of needs Relatedness need 5 3.86 2.44
Growth need 5 3.86 2.44
Employees' outcomes Satisfaction 5 3.98 2.67
Retention intention 5 3.94 2.67

construct. Table 4 reports the three anchors for each variable in Configurations S7 and S8 showed the presence of only the
the study. CSR factor of environment (S7) or consumer (S8), with the absence
Once the calibration is complete, the fsQCA algorithm can be of other CSR factors and the absence of two or three ERG factors.
used to generate the truth tables. The truth tables can be refined This implies that, even if employees do not have positive per-
according to the values of consistency and frequency. In this study, ceptions of an organization's CSR practices and if the fulfillment
fs/QCA 2.5 software (Ragin & Davey, 2014) was applied to implement of their relatedness and growth needs is relatively low, the
the analysis of fsQCA. The consistency cutoff for the reduction of employees' job satisfaction may be high as long as they perceive
solutions was set at 0.74 (Woodside, 2013), and the minimum the organization positively in the environment or the consumer
acceptable observation (frequency) threshold was set at 3 (Pappas, aspects of CSR.
Kourouthanassis, Giannakos, & Chrissikopoulos, 2016). In contrast to The raw coverage results provide important information. Raw
parsimonious and intermediate solutions, complex solutions make no coverage indicates the percentage of the outcome that is explained
simplifying assumptions (Hsiao et al., 2016). Therefore, complex by a specific configuration. A higher raw coverage indicates greater
solutions were selected to present the configurations in this study. importance of the specific configuration in relation to other configura-
tions. The raw coverage values of configurations S4–S6 and S12 were
determined to be higher than 0.6 (0.624, 0.625, 0.638 and 0.665,
respectively), whereas the coverage values of all other configurations
4.2 | Configurations predicting employees'
were lower than 0.4. In fact, the four configurations demonstrated the
satisfaction presence of at least five factors of CSR and ERG combined. Hence,
Table 5 presents a summary of the 12 configurations (S1–S12) identi- CSR and ERG factors are shown to play an essential role in achieving
fied to be associated with high employee satisfaction outcomes. The high job satisfaction.
consistency levels of these configurations were between 0.820 and Configurations T1–T7, listed in Table 5, were determined to be the
0.967, higher than the threshold of 0.74, and the coverage of each pathways leading to low job satisfaction. The consistency levels of
pathway was between 0.259 and 0.665. Among the 12 configurations, these configurations were between 0.824 and 0.984, higher than the
eight (S2–S5 and S9–S12) contained all three of the ERG factors, threshold of 0.74, and the coverage of each configuration was
combined with the presence or absence of factors of CSR. In particu- between 0.275 and 0.584. Among Configurations T1–T7 leading to
lar, the presence of all ERG factors, together with CSR perception of low job satisfaction, conditions T1–T3 and T7 suggested that a low
consumer or environment (S10–S12), leads to high employee satisfac- level of fulfillment of growth needs is likely to result in low job satis-
tion. The presence of CSR factors of labor and consumer (S4), or that faction. Specifically, Configurations T1–T3 lacked growth needs and
of economy and environment (S5), coupled with the presence of ERG at least three of the four CSR factors, whereas T7 contained all CSR
needs, also leads to job satisfaction. Notably, the presence of ERG factors with a low level of growth needs. Notably, high raw coverage
needs with an absence of CSR perception can result in job satisfaction, values were observed in Configurations T1 and T3 (0.584 and 0.554,
as shown by S2 (absence of CSR perception of labor and consumer), respectively), which revealed the absence of five or six factors of
S3 (absence of CSR perception of economy and environment) and CSR and ERG needs. This finding supports the notion that negative
S9 (absence of CSR perception of economy and labor). In short, the CSR perception and low fulfillment levels of ERG needs negatively
results indicate, to some extent, considerable positive effects affect employees' outcome.
regarding the fulfillment of ERG needs on job satisfaction. Configurations T4 and T5 contained all ERG factors and two CSR
Configuration S6 included existence needs and all four factors in factors, coupled with the absence of environment (T4) or consumer
CSR perception. By contrast, Configuration S1 lacked all CSR per- (T5). These two configurations indicate the importance of the environ-
ception factors, with the presence of existence needs. This implies ment and consumer factors, and that the lack of these leads to low job
that fulfillment of employees' existence needs can lead to job satisfaction, despite the presence of ERG factors. T6 showed that a
satisfaction for two very different groups of people, one with high low level of fulfillment of relatedness needs, even if all four CSR fac-
perception of CSR practices and the other with low perception of tors and level of fulfillment of the need of existence are high, results
such practices. in low job satisfaction.
LEE AND CHEN 955

4.3 | Configurations predicting employees' retention

Economics Labor Consumer Environment Existence need Relatedness need Growth need Consistency coverage coverage coverage consistency
intention
Solution Solution

0.823

0.790
The complex solutions listed in Table 6 indicate six configurations
0.866 (U1–U6) associated with employees' high retention intention. The

0.833
consistency levels of these configurations were between 0.806 and
0.930, higher than the threshold of 0.74, and the raw coverage value
of each configuration was between 0.276 and 0.655. Among these
Unique

0.013
0.002
0.000
0.007
0.005
0.045
0.006
0.005
0.000
0.001
0.000
0.008
0.023
0.006
0.020
0.003
0.000
0.006
0.008
configurations, five (U1, U2 and U4–U6) contained all ERG factors.
This finding suggests that fulfilling employees' ERG needs can enhance
their retention intention. In addition, the importance of environment
0.318
0.304
0.299
0.624
0.625
0.638
0.265
0.259
0.327
0.371
0.363
0.665
0.584
0.330
0.554
0.286
0.275
0.327
0.329
Raw

as a CSR factor cannot be underestimated, as shown by the three con-


figurations U2, U5 and U6. Notably, Configuration U3 indicated that
high retention intention can be achieved when three CSR factors
0.853
0.952
0.952
0.958
0.956
0.935
0.833
0.820
0.953
0.966
0.967
0.953
0.962
0.917
0.984
0.862
0.863
0.844
0.824
(economy, labor and consumer) and relatedness and growth needs
are low, but the level of fulfillment of existence needs is high. This
result suggests that some employees value the needs of existence
(economic rewards) and downplay the influence of other factors on
their retention intention. U3 had the lowest raw coverage value











(0.276) among the six configurations (U1–U6); hence, it is less impor-


tant than the other configurations. High raw coverage values were
observed in configurations U1, U2 and U6 (0.614, 0.617 and 0.655,
respectively), which contained five factors of CSR perception and
Employees' job needs

ERG needs. This finding suggests a positive role of CSR and ERG









needs in retention intention.


Table 6 also presents configurations V1–V7 associated with low
employee retention intention. The consistency levels of these config-
urations were between 0.788 and 0.954, higher than the threshold










of 0.74, and the raw coverage of each configuration was between


0.264 and 0.558. In general, the findings are consistent with the
reports of previous research that low CSR perception and low
fulfillment of employees' ERG needs lead to low retention intention.







Configurations V1, V2 and V4 indicated that the lack of CSR and


Employees' perception of CSR

ERG factors lead to low retention intention. The raw coverage values
derived for configurations V1 and V4, which lacked five or six factors
● indicates the presence of a condition; ○ indicates the absence of a condition.






of CSR and ERG needs, were high (0.558 and 0.529, respectively).
Configuration V2 was determined to be the same as S1 in that it









included existence needs but lacked all CSR factors. Although Config-
uration S1 may lead to high job satisfaction, Configuration V2 predicts
that the retention intention will be low.








Configuration V3 was determined to be the same as S10, in which


Configurations for employees' satisfaction

Configuration

the CSR perception in the labor aspect is low, whereas the fulfillment
of ERG needs and the environmental perception of CSR are high. This
finding indicates that, despite a high level of job satisfaction, the
S10
S11
S12
no.

Low level of employees' satisfaction T1


T2
T3
T4
T5
T6
T7
High level of employees' satisfaction S1
S2
S3
S4
S5
S6
S7
S8
S9

retention intention could remain low if the perception of CSR in the


labor aspect is low. Configuration V6 is the same as T4 in terms of
the presence or absence of factors. Configuration V6 resulted in low
retention intention, revealing the presence of ERG needs and CSR fac-
tors of labor and consumer, coupled with a low level of the environ-
Employees' satisfaction

mental factor of CSR. This suggests that, if employees feel that the
organization fails to pay attention to the environment, their retention
intention will be low, regardless of their positive evaluation of the
organization's efforts in CSR in other dimensions and in fulfilling
TABLE 5

their ERG needs. Configuration V7, the same as T5 with regard to


the presence or absence of factors, contained the economy and
956 LEE AND CHEN

environmental factors of CSR, as well as all ERG factors except for the

Economics Labor Consumer Environment Existence need Relatedness need Growth need Consistency coverage coverage coverage consistency
consumer factor. This indicates that employees' retention intention

Solution Solution

0.825

0.764
and job satisfaction are to some extent affected by their assessment
of whether the organization values its CSR responsibilities regarding
the customers.

0.844

0.793
Unique

4.4 | Effect of CSR perception on the fulfillment of


0.007
0.005
0.005
0.000
0.002
0.009
0.018
0.003
0.007
0.017
0.003
0.002
0.001
employees' ERG needs
The complex solutions listed in Table 7 reveal 10 configurations
0.614
0.617
0.276
0.318
0.362
0.655
0.558
0.356
0.330
0.529
0.318
0.276
0.264
Raw

(A1–A4, C1–C3 and E1–E3) associated with high fulfillment of


employees' ERG needs. Configurations A1–A4 led to a high fulfillment
of existence needs, whereas C1–C3 and E1–E3 led to a high fulfill-
ment of relatedness and growth needs, respectively. The consistency
0.928
0.930
0.806
0.912
0.929
0.925
0.935
0.875
0.788
0.954
0.834
0.846
0.843
levels of these configurations were between 0.766 and 0.906, higher
than the threshold of 0.74, and the raw coverage value of each config-
uration was between 0.758 and 0.861. The study found that the pres-
ence of the economy factor of CSR perception predicts a high level of
fulfillment of all ERG needs (A1, C1 and E1). Similarly, a high level of





CSR perception in the labor aspect results in a high level of fulfillment


of all ERG needs (A2, C2 and E2), and the presence of the environ-
mental factor engenders positive effects on all ERG needs (A4, C3
and E3). As revealed by Configuration A3, the presence of the
Employees' job needs

consumer factor of CSR perception is associated with a high level of








fulfillment of existence needs.


Ten configurations (B1–B4, D1–D3 and F1–F3) associated with
low fulfillment of employees' ERG needs are listed in Table 7. Config-
urations B1–B4 led to a low fulfillment of existence needs, whereas









D1–D3 and F1–F3 led to a low fulfillment of relatedness and growth


needs, respectively. The consistency levels of these configurations
were between 0.766 and 0.852, higher than the threshold of 0.74,
and the raw coverage value of each configuration was between



0.703 and 0.834. In general, the 10 configurations revealed the


Employees' perception of CSR

absence of CSR factors. Configurations B3, B4 and D1 indicated the


● indicates the presence of a condition; ○ indicates the absence of a condition.

absence of the economy factor of CSR, and configurations B2, B4,





D2 and F1 revealed the absence of the labor factor. The consumer


factor of CSR perception was low in configurations B1 and F2,






whereas the environmental factor was absent from B2, B3, D3 and
Configurations for employees' retention intention

F3. These findings reveal a negative impact of low CSR perception


on the fulfillment of employees' ERG needs.






Configuration

5 | DISCUSSION
no.

High level of retention intention U1


U2
U3
U4
U5
U6
V1
V2
V3
V4
V5
V6
V7

This study advances the understanding of the interactive effect of


employees' psychological needs and perceptions of organizational
Low level of retention intention
Employees' retention intention

CSR practices on their job satisfaction and retention intention. The


findings contribute to the CSR literature in several ways. First, this
study illustrates the application of a configurational approach to ana-
lyze the effect of CSR. Specifically, this study demonstrates the use
of fsQCA as an alternative method in CSR research, which has been
dominated by multiple regression analysis and structural equation
TABLE 6

modeling. This study demonstrates that fsQCA is suitable for


uncovering the multilevel, complex realities associated with CSR,
LEE AND CHEN 957

TABLE 7 Configurations for employees' job needs

Employees' perception of CSR


Configuration Raw Unique Solution Solution
Employees' job needs no. Economics Labor Consumer Environment Consistency coverage coverage coverage consistency
High fulfillment of A1 ● 0.839 0.757 0.014 0.914 0.778
existence need A2 ● 0.906 0.723 0.006
A3 ● 0.812 0.837 0.023
A4 ● 0.831 0.81 0.022
Low fulfillment of B1 ○ 0.758 0.725 0.021 0.857 0.704
existence need B2 ○ ○ 0.765 0.763 0.04
B3 ○ ○ 0.792 0.703 0.011
B4 ○ ○ 0.785 0.737 0.029
High fulfillment of C1 ● 0.789 0.815 0.029 0.930 0.729
relatedness need C2 ● 0.832 0.76 0.014
C3 ● 0.771 0.861 0.054
Low fulfillment of D1 ○ 0.780 0.771 0.057 0.851 0.756
relatedness need D2 ○ 0.852 0.690 0.013
D3 ○ 0.834 0.732 0.035
High fulfillment of growth E1 ● 0.769 0.799 0.026 0.924 0.720
need E2 ● 0.826 0.758 0.015
E3 ● 0.766 0.860 0.059
Low fulfillment of growth F1 ○ 0.769 0.834 0.096 0.883 0.742
need F2 ○ 0.840 0.776 0.008
F3 ○ 0.834 0.728 0.026

● indicates the presence of a condition; ○ indicates the absence of a condition.

employees' psychological needs and the resultant outcomes of job want corporations to be more environmentally responsible (Wang
satisfaction and retention intention. & Juslin, 2011).
Second, the findings of this study echo the reports of previous Fourth, the study findings demonstrate equifinality. Multiple
studies that positive employee perceptions of an organization's CSR configurations to individual‐related outcomes were identified. For
practices and high fulfillment of employees' psychological needs are instance, six configurations (U1–U6) were determined for high
positively associated with individual‐related outcomes (Aguilera retention intention. This demonstrates that individuals perceive
et al., 2007; Bauman & Skitka, 2012; Bonini et al., 2009; Gond CSR factors differently and respond differently to them (Du et al.,
et al., 2017). Configurations S4–S6 and S12, as well as U1–U2 2015; Rupp & Mallory, 2015). Grant (2012) emphasized the need
and U6, had the highest raw coverage values among the S or U for employees to develop personal connections with organizational
configuration groups. These results clearly demonstrate that positive CSR activities. Onkila's (2015) qualitative research on 27 employees
perceptions of CSR practices, coupled with a high level of fulfill- in a Finnish financial service company also found that employees'
ment of ERG needs, lead to high job satisfaction and retention perception of CSR is influenced by their personal values, needs
intention. Based on the findings of the study, to improve and interpretation of the CSR goals and practices of the organization
employees' outcomes, top managers of an organization may adopt (Onkila, 2015). In other words, a bottom‐up, self‐screening mecha-
measures that enhance CSR and the fulfillment of employees' nism for individuals to participate in, or respond to, CSR activities
psychological needs. can be beneficial. The existence of equifinal configurations seemingly
Third, configurations of T4 (the same as V6) and T5 (the same as supports a bottom‐up, individual‐based view of employees' diverse
V7) implied that, for some employees, if their perception of the con- reactions to organizational CSR practices and fulfillment of
sumer or environmental factors of CSR is low, their job satisfaction employees' ERG needs. Therefore, this study suggests that managers
and retention intention will also be low, regardless of the presence must find a balance between the top‐down and bottom‐up
of other factors. The environmental factor of CSR was low in Con- approaches to CSR.
figurations T4 and V6, leading to low job satisfaction and low reten- Fifth, the findings (the 20 configurations denoted A–F) indicate a
tion intention, whereas the ERG factors as well as the labor and strong connection between CSR perception and the fulfillment of ERG
consumer factors were high. Similarly, Configurations T5 and V7, needs. This echoes the justice perspective of CSR, which states that
which led to low job satisfaction or low retention intention, revealed CSR efforts improve fairness among internal and external stakeholders
the absence of the consumer factor of CSR, coupled with the pres- and contribute to the fulfillment of employees' psychological needs.
ence of the ERG factors and economy and environmental factors. Finally, this study contributes psychological ERG factors to CSR
This finding suggests that organizations must pay particular attention research. Because adding one factor to the QCA method increases
to the consumer and environmental factors of CSR, because the two the solution complexity in a geometric progression, this study lim-
factors are necessary for achieving desirable employees' outcomes. ited the number of independent variables to four CSR factors
Our finding is consistent with the results of the study by Wang and three ERG factors. The co‐occurrence of configurations conclu-
and Juslin of the perception of Chinese youth on CSR that, facing sively demonstrates that CSR, and not ERG alone, cannot predict
the mounting environmental crisis in China, Chinese young people outcomes.
958 LEE AND CHEN

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