Relation Between Generosity, Business and Work Compensation Models

Abstract

The objective of this paper is to explore the relation between Generosity and business and work compensation models, with a motive, to elaborate on how current system designs and measuring matrices respond to intrinsic values of generosity and philanthropy. It is divided into three parts. In part one, generosity is reviewed in terms of personal attribute. In part two, generosity as a work compensation model is analyzed. Finally in part three, the usage of generosity as a business model is reviewed.

Keywords: Generosity, Return on Investment, Employee utilization, Business designs

Introduction

This literature review represents an overview of literature on Generosity and its relation with business models and work compensation models. It is divided into three parts. In part one, generosity is reviewed in terms of personal attribute. In part two, the usage of generosity as a business model is reviewed. Finally in part three, generosity as a work compensation model is analyzed.

Generosity as an Attribute

When it comes to defining generosity in action, generosity often encompasses a very broad spectrum of human behavior. Researches have correlated generosity with altruism, philanthropy, kindness, social reciprocity style, welfare and even with the field of biology wherein hormones that promote generosity are researched.

Khema (1987) highlighted that generosity also goes beyond the material attribution it is often attributed with. She highlighted that an act of giving one’s time, attention, concern, care and the sharing of one’s skills and abilities also falls under generosity.

As per this, a person’s motive to help others with anything that he has which the other person lacks seems to be considered an act of generosity. A student teaching another student during exams so as to help him can be considered to be a generous outlook towards the life. An employer calling the employee during his hard times or family crisis to check if everything is okay will be counted as a generous act, A software developer making his software open source so that others may benefit from him will be seen as a philanthropic activity, an activity of giving without expecting anything in return.

Khera (2014) suggested generosity in action as a means to develop self-esteem. He emphasized “If you want to build a positive self-esteem quickly, one of the fastest way is to do something for those who cannot repay you in cash or kind.”

Grant (2013) summarized the research of reciprocity styles that people use in social interaction. He stated that there are 3 reciprocity styles, namely, “taker, giver and matcher”. If one is a taker, one helps others strategically when the benefits to self outweighs the personal cost. On the other hand, if one is a giver, one helps others when the benefits to others outweigh the personal cost. Lastly, a matcher is one who helps others when the benefits to both are equitable.

Thus, generosity is seen as a very broad field of human activities and interaction. The effects of this behavior too is searched in great detail in various researches. The most significant of them is the relation of generosity and success.

Grant (2013) research showed that givers tend to be more successful than takers in various industries. According to (Bob Burg, 2007), “Most people just laugh when they hear that the secret to success is giving... Then again, most people are nowhere near as successful as they wish they were.” He showed 5 principles of success based on the philosophy of giving.

“Pay it Forward” and “Gift Economy” are some of the concepts of economic transactions based on generosity theme which are gaining great momentum today. Web communities like https://www.servicespace.org and http://www.movedbylove.org/ show numerous examples of these modes of economic activities in action. (Mehta, 2015) As the founder of ServiceSpace, Nipun Mehta is a well-known “incubator for generosity-driven projects”.

Although much of research has been done on the positive effects of generosity, our society hasn’t fully utilized it when it comes to designing systems based on generosity. We don’t see livelihoods that naturally promote intrinsic human connection and giving values. Even the organizational structures, social hierarchy and status quo are more aligned with those who have a mindset of being go-getters. In fact, a go-getter has become so much a norm that anyone who tries to be a go-giver, is seen as not so serious candidate in the race to success.

Why generosity didn’t evolve in the work compensation models?

The past one and half decade saw a great rise in the number of people opting for MBA post-graduation. It evolved to become a pre-requisite for management positions. This also led to an emerging importance to managing people in a right way. Things became evident that this area cannot be taken lightly. The concepts of work life balance, employee engagement and Maslow’s motivation theory evolved which showed that there were things beyond money that motivated people to do things in a job. People realized that it’s not just the pay check that could lead to satisfaction in the job and productivity on the floor.

It was a good eye opener to the world. Management began changing their outlook to bring more comprehensive packages that touched various motivating factors. Yet we didn’t find the research going on to the track of integrating intrinsic motivations of philanthropy and a sense of giving within the employee-employer transactions. The matrix of return on investment, which has become the backbone of assessing work compensation models, didn’t get any alternatives.

Return on investment

If work compensation models were based on the belief that giving precedes getting, rather than getting leads to giving, we would have seen a world with altogether different measuring units for the human resource managers. When the money is spent on the employees with a motive to expect something tangible in return, it plants a seed of transaction. Even if the company spends on things that were not just beneficial to it, but to the employees as well, the motive of getting something back from them undermines the act of investing in them. The purity of investment diminishes. This is because whether it is explicitly evident or not, people do capture the true motivations of people who help them in the very first instance. It may not always be conscious, but it often reflects in the behavior.

Return on investment is a matrix borrowed from monetary markets. It works wonderful in such markets for decision making. However, its applicability on living beings is something rarely challenged. We never see this matrix being used in human relations other than employment. A husband doesn’t check ROI on his wife. A father doesn’t check for his son. A teacher doesn’t teach pupils seeing the ROI from them. Genuine friendship aren’t based on ROIs.

Yet this very matrix has become the backbone of work compensation models. The main reason for its implementation being never questioned could be attributed to the fear. Companies fear being generous. They doubt that in this dog eat dog world, such outlook can be taken for granted.

Another reason could be simply unavailability of alternative matrices. We don’t know what to implement if don’t implement ROI. Measurement is important to know where we are going. Nevertheless, we do see some areas where ROI can be removed. The companies often forget that not everything needs to be a transaction. Some things are meant to be transformational.

For instance, the Government of India and multiple State Governments across the country provide special casual leaves to employees who wishes to attend a 10 day silent mediation retreat in India. It’s a completely no strings attached, authorized leave, with government expecting nothing in return from employees who complete such courses. There is no ROI check. There is no training output measurements. It’s simply an act of helping employees to live a healthy life. The motive is to bring transformation in employees at personal level, which would eventually overflow to the work life and bring more benefits for both. In fact, the state of Madhya Pradesh has made in compulsory for government school teachers to attend one such course in their initial years of employment.

Tata Steel organizes a 10 day adventure camp for its new management trainees in the first year of their employment. Although these aren’t the core investments, they do have the potential of being the core reasons for motivation. And it is also understood by employees. If this trend follows, we may see such pure investments to increase in number, overshadowing the ROI ones and bringing in new matrices to measure.

Employee utilization

As per dictionary, utilization means “the state of being made use of”. Employee utilization is yet another matrix we see being evolved from the shop floor terminology. On shop floor, a machine is considered useful if it is utilized. An unutilized machine is a space hogging garbage. However, when this logic is applied to human beings, it opens up an unexplored territory.

While for machines, they can only do things they are destined to do. When it comes to people, there is no such thing as a person can do only one set of similar tasks. If it would have been so, creative ideas would have never existed. Another thing is, unlike machines, humans work as teams, groups and mentors. There is a human to human interaction which is an altogether another sphere of biggest usefulness.

If an employer is heavily bent on this matrix, we see employees unhooking themselves from doing anything beyond what they are paid to do. They actually turn into machines, capable of doing only one set of activities. Also such matrix is actually responsible for killing the motivation that arises from paychecks. When a human being understands that relation is based merely on using each other, the return one gets from it, seems to be just the exchange value, nothing more. Sounding similar to the word utilization, is the word usefulness. As per dictionary, it means “the quality of being of practical use”.

What is more important to a company? Is it that an employee should be squeezed to the core from morning to the evening when he is on paid duty so that, like machines, there is no wastage of capacity? Or is it that an employee should be a useful asset to the company, who has a goodwill towards it, and helps it when it is in ill health and needs support?

When someone has a goodwill towards someone, there is nothing they won’t do to see to it that that the subject of goodwill is happy. This is where generosity in action springs up. Generosity in action refers to giving one’s attention, care, time, and skills for the wellbeing of others.

An example of giving one’s time on the lines of generosity is highlighted in the Love machine approach developed by Linden Lab, the company behind the virtual world Second Life. (Grant, 2013) Says “In a high-technology company, many employees aim to protect their time for themselves and guard information closely, instead of sharing their time and knowledge with colleagues. The Love Machine was designed to overcome this tendency by enabling employees to send a Love message when they appreciated help from a colleague. The Love messages were visible to others, rewarding and recognizing giving by linking it to status and reputations.”

Generosity as a business model

When it comes to corporate generosity, most of the researches fall under the community or social responsibility activities of an organisation. The effects of such activities on company’s brand image, public relations, success and market retentions are researched upon. Acts of generosity within the organisation, i.e. the interactions between employer and employee, or employee and employee or employer and third-party suppliers, providers and transport carriers is what this paper aims to talk about. Considering the already existing business models and researches, following few have come close to the subject highlighted here:

Haski-Leventhal (2012) carried out a research on payroll giving. The research stated, “Payroll giving refers to on-going donations made by employees through salary deduction, usually to a charity, which was chosen by their employer, or to one of a few charities they may choose from. “

The finding of the research showed that payroll giving can enhance employee involvement. A Restaurant in Ahmedabad, named Seva Café, serves food to customers with a menu that reads Price 0/- Rs and has this footnote: "Your meal was a gift from someone who came before you. To keep the chain of gifts alive, we invite you to pay it forward for those dine after you." (Seva Cafe: Living is Giving)

They say it is an experiment in “peer to peer” generosity. A similar concept can be seen in the Karma Kitchen restaurant chain, which has scaled to many locations and countries throughout the world. (Karma Kitchen: Growing in Generosity)

Another famous business model on these lines is the living example of an auto-rickshaw driver in Ahmedabad, named Udaybhai Jadav. (Roysam, 2017) stated, “His (rickshaw) meter would perpetually read zero and each surprised passenger, at the end of the ride, would receive an envelope with a greeting card that read ‘Pay from your heart’ explaining that whatever they wish to pay will be used for the subsequent passenger.” For the past 8 years, he has been running his rickshaw in this manner.

From all these examples, we could see that generosity in action has a great potential in the field of business and corporate establishments. It is a viable alternative to the existing economic models. Although the scalability of this model is still an area of research untouched yet, the initial benefits derived from it, is enough of a reason to look further into it.

Conclusion

As Mahatma Gandhi said, “Be the change you wish to see in the world”, we are today at a crossroads in the field of what it means to do work and the changes we make today, we’ll set the trajectory for the future. With advancing technology, it is expected that many new jobs that do not exist today, would become mainstream for current school going kids. The newer norms of working too are evolving. Even with the advent of crypto currencies, the value of money is being challenged. In such evolutionary times, it remains to see how we’ll be shaping the intrinsic values we hold so dear to our hearts. Generosity, philanthropy and what it means to be human is all greatly linked to the matrices, models and system designs we evolve for our future generations. They are the glasses we pass onto our kids to see the world through.

Nevertheless, we have good reasons to be optimistic about our future. From all the business model examples we saw about, we could see that generosity in action has a great potential in the field of business and corporate establishments. It is a viable alternative to the existing economic models. Although the scalability of this model is still an area of research untouched yet, the initial benefits derived from it, is enough of a reason to look further into it.

Evolution of models like the love approach too highlighted that generosity in action as a means of earning is something of great benefit to the humanity. It seems to have a two-fold aim. On the one hand, the person who receives the compensation gets a chance to serve for a higher cause, enabling his greed to reduce, and on the other hand, the person who gives the money gets a chance to do compassionate giving, which in turn reduces his greed. Such model is thus a complete lose-lose situation in terms of greed for both the parties involved. This is complete opposite to currently existing business models wherein the mutual satisfaction or meeting of greed leads to acceptance of a contract or beginning of business. If any such research succeeds, we could leave an altogether better and different world for the future generation.