10 Steps of Integrating CSR Into HR Management - Human resource professionals are highly tuned to considering Corporate Social Responsibility (CSR) from both a values-based and a business - case perspective. They work in a business function that readily identifies both the business benefits and the people benefits of fostering CSR alignment and integration. However, there is little guidance available to human resource leaders who wish to advance CSR within the firm.
This article provides some basic steps or starting point for managers mapping out their strategic approach. It can serve as a checklist for advanced managers who are well on the path, and it can provide a roadmap for the manager who is committed to make a difference in this way and is at the beginning of their journey. Ideally these steps would be followed more or less sequentially; however in practice this is often not possible and indeed, some managers may have already implemented certain components. The basic steps of integrating CSR into human resource management have been described below.
Step 1: Vision, mission, values and CSR strategy development
Successful CSR requires a clearly articulated vision, mission and values. The HR practitioner could initiate or support the development, or upgrade, of a vision, mission and values foundation if one does not exist or does not explicitly address CSR. The foundation needs to incorporate elements of corporate social responsibility or sustainability in order for it to foster alignment. Where a CSR ethic has not yet taken hold, the HR manager could champion the need and opportunity for a vision, mission and set of values and show how it can add ROI to the organization, why this could be both a good business strategy and a good people strategy. The manager can bring the opportunities to the attention of the senior executive and the board on what it means, and why it makes good business sense. These are the first steps to building CSR into the company’s DNA and into the organization’s operating and strategic framework.
Once the vision, mission and values framework is defined, the firm is ready to undertake the development of its CSR strategy. This paper will not delve into the components of CSR strategy development, as that is a significant topic of its own. The role of the human resource manager at this phase is central to all other steps: it is critical that the human resource function be represented at the table in the development of the CSR business plan and strategic direction. They have an important “people perspective” to contribute and will be involved in implementing key measures. Particularly in those firms where CSR is housed in the human resource department, the HR manager has a key role in CSR strategy development. HR is a strategic partner in the organization and as such, can help drive the formulation of the CSR strategy.
Step 2: Employee codes of conduct
The HR function is typically responsible for drafting and implementing employee codes of conduct. As such, HR managers hold the pen on the principles contained i n the employee codes. Since a number of recent high profile corporate frauds, boards of directors have become very concerned about the ethical culture within their organizations, looking for 100% sign- off on and compliance with codes of conduct which articulate their ethical values. This is an ideal home for the expression of an organization’s commitment to socially and environmentally- based decision - making as it is one of the rare documents which all employees are bound by and come into contact with. As such it is a key tool for cultural integration of CSR norms. It is important to avoid rhetoric and undefined terms such as “sustainability” and “CSR”, but to clearly enunciate the conduct standards expected of employees.
Step 3: Workforce planning and recruitment
Workforce planning consists of analyzing present workforce competencies; identification of competencies needed in the future; comparison of the present workforce to future needs to identify competency gaps and surpluses; the preparation of plans for building the workforce needed in the future; and an evaluation process to assure that the workforce competency model remains valid and that objectives are being met. For a CSR oriented company, this consists of evaluating the need for skill sets and competencies central to the emergent sustainability economy – an economy of resource and energy scarcity, human and environmental security constraints, changing societal norms and government expectations. Companies need to identify their key CSR competencies and gaps in the context of these structural changes. Referred to by many as the “green economy”, regardless of its title, the marketplace is undergoing a systemic transformation that will require new competencies and skills. (Unpublished paper: Sustainability Labor Market Trends by Strandberg, 2009.) The Co-operators Group Ltd., for example, is upgrading its eight competencies (accountability and ownership; time and deadline management, practical problem solving and judgment, communication, coaching and working with others) to reflect their corporate sustainability commitments and values.
A related exercise, talent management, which refers to the process of developing and integrating new workers, developing and keeping current workers and attracting highly skilled workers to work for the company, needs to consider alignment with the company’s CSR vision and goals to ensure talent is developed with the appropriate focus. Often in the area of talent management and recruitment, leading CSR companies develop an employer brand that incorporates their CSR perspective into the employee value proposition. More and more firms are profiling their CSR ethics in their recruitment branding and marketing programs, promoting the benefits of working within a values -based culture. Employee volunteer programs and community involvement are oft - cited company values expressed by employees, and found within employee value proposition and internal brand development efforts. Campus recruitment programs are ideal environments for CSR oriented recruitment, as is online recruiting where technology savvy employees search for work. In this environment, recruitment interviews include questions on ethics and CSR; the offer letter reinforces the corporate culture; and early employee contact reinforces the CSR brand.
Step 4: Orientation, training and competency development
During the orientation process employees should be given a thorough overview of the clear line of sig ht between the company’s vision, mission and core CSR values and goals. To ensure maximum alignment and early employee ‘buy- in’ to the strategic CSR direction of the organization, this general orientation should be deemed mandatory for all levels of new employees. New employees need to be provided information about CSR policies and commitments, the key CSR issues the company faces and the key stakeholders with which the firm engages. How the company measures its CSR performance, the annual sustainability or CSR report, and where they can find further company information on CSR are important elements of new employee orientation programs. New hires should receive a copy of the core values.
Once inducted, employees should be provided CSR training on an annual or other regular basis. Employees will either have direct CSR responsibilities (e.g. energy manager) or indirect CSR responsibilities (e.g. payroll clerk). Those with direct responsibilities will receive technical and specialized training in CSR while those with indirect responsibilities should receive training in top priority CSR issues of a more general nature. Either way, it should be job - relevant as with health and safety training for factory workers to strategic sustainability issues for executive management and the Board.
Step 5: Compensation and performance management
Next to recruitment and competency development, compensation and performance management are central to the HR function. HR is involved in setting performance standards and expectations and monitoring results to performance objectives. At Vancity Credit Union their Statement of Values and Commitments which articulate their CSR principles is incorporated as a key area of accountability in all executive role descriptions rather than as an added attachment at the end of each role description.
Going forward they are expanded beyond their three stated values of innovation, integrity and responsibility, translating them to goals i n the annual performance plans of all executives to be cascaded down to each of their managers and employees. They believe that by integrating their three corporate values and CSR - oriented Statement of Values and Commitments into their business planning, objectives, and executive role accountabilities, they will continue to sustain and ingrain their differentiator in all that they do. (Personal communication with Susan Karda, Manger, Organization Development & Learning, Vancity, Feb. 25, 2009).
Step 6: Change management and corporate culture
Human resource practitioners are the keepers of the flame when it comes to corporate culture, team building and change management processes. Growing and adapting to the changing marketplace necessitates that firms pursue significant behavioral shifts from time to time. Sometimes organizations require the outside assistance of change management professionals to help them identify an appropriate strategy when they are attempting to create significant behavioral change, but in the end, culture shift can only be achieved and sustained if it is driven and sponsored effectively internally.
Mindsets and behavioral change come about through role modeling, building awareness and generating desire (what is in it for me?) and conviction, developing knowledge and ability and reinforcement through incentive programs. Culture change requires setting the tone at the top – where executives and management demonstrate and model the organization’s values – and then creating alignment throughout the organization with the values you espouse to live. The values need to be reflected in all processes starting with how you attract and recruit employees, to decision- making and rewards and incentive programs, etc.
Step 7: Employee involvement and participation
As mentioned earlier, employees are among the key stakeholders for the development of any CSR strategy or program. A critical first step in mission, vision, values and strategy development is to understand the key concerns, priorities and perspectives of all key stakeholders, particularly employees. It is a truism that employees consulted and engaged in the development of new programs and approaches are likelier to follow through with their implementation. Often companies consult and engage their employees in the development and delivery of their community involvement and charitable donations programs; however, what is called for here is more substantive than this.
Employee engagement has been acknowledged as a key driver of shareholder value in a firm and is becoming a key metric for monitoring corporate performance by Board and management. Research by Towers Perrin in 2007 revealed that an organization’s reputation for social responsibility was one of the top 10 engagement drivers, along with senior management’s interest in employee well- being, opportunities to improve skills and capabilities and input into decision- making. (Cited in European Alliance for CSR, 2008, p. 11). Hewitt Associates, a global HR consulting firm, is developing a suite of CSR questions to probe employee CSR perceptions for their 2009 employee engagement survey with the intent to include CSR questions in their engagement surveys going forward.
Step 8: CSR Policy and Program Development
HR is also in a position to drive policy development and program implementation in HR areas that directly support CSR values. Wellness, diversity, work- life balance and flex -time policies are CSR programs directly within the HR manager’s purview. In organizations committed to reducing their carbon footprint HR practitioners can develop programs enabling employees to use alternative transportation to get to work (e.g. providing showers, secure bike lock- ups, parking spots for van pools and co - op or hybrid cars, bus passes, e tc.) and work remotely, including other forms of headquartering and “hoteling”, teleworking, etc.
Wellness programs can become a platform for engaging employees in discussions about “personal sustainability” and provide support for employees in the areas of stress management, spirituality at work, health and fitness, healthy lifestyles, etc. Employee volunteering programs are also within the HR mandate, and can help build out the employee value proposition and employer brand while concurrently delivering on the firm’s CSR goals for community engagement and investment. A related policy could be the development of an unpaid leave program for employees to pursue personal projects aligned with company values. Successful wellness, carbon reduction and employee volunteer programs require management support, role - modeling and ongoing communications – which, if in place become further vehicles to fostering employee awareness of, and engagement in, the firm’s CSR approach.
Step 9: Employee Communications
Every CSR strategy requires the development and implementation of an employee communication program to convey the corporate direction, objectives, innovation and performance on its CSR efforts. Intranets, websites, blogs, wikis, social networking sites, podcasting, videos, forums, town hall meetings, regular team briefings, webcasts, voicemails, print and electronic newsletters and other forms of social media need to be deployed to bring the CSR message to the workforce – in ways that are attuned to the communication channels of the employee, which are changing rapidly in this age of web 2.0.
It is important to note that employee engagement is dependent on communication of board, CEO and senior management commitment, in the absence of which employees will become cynical and unmotivated. Lack of CSR commitment at senior levels could lead to disgruntled and frustrated employees finding unmonitored, anonymous social networking sites to express their dissatisfaction. It is important to close this potential gap with clear communication and walking the walk on the part of senior executives. The Co- operators, for example, launched their 2008–2010 Sustainability Strategy with a CEO speech and CEO video to all staff.
Step 10: Measurement, Reporting – and celebrating successes along the way!
As what gets measured gets managed, it is vital that both CSR performance and employee CSR engagement be actively measured and reported to executive, the board of directors and publicly. Typically this is done in the form of an annual CSR report. Increasingly, many of these reports are disclosing employee engagement scores, including employee response to such questions as:
“I am aware of and understand our CSR Strategy.”
“I believe the firm acts in alignment with its CSR values and policy.”
“I believe the firm is making progress towards implementing its CSR Strategy.”
“Our CSR Strategy makes me feel proud to be working at the firm.”
“I feel comfortable raising CSR issues in the workplace.”
“I believe our organization is a champion of sustainability amongst the public.”
Other human capital metrics, such as turnover, health and safety, employee development and diversity, for example, can be additional metrics which reveal the firm’s CSR commitment and the degree to which it walks its talk.
In designing your CSR report again it is important to consult employees on what to report and it is important that the report be received and approved by the board of directors for public release. It is only under these conditions can the HR professional be assured that these metrics and the firm’s CSR performance are taken seriously.
finally, but no less importantly, don’t forget to celebrate the successes large and small along the way. From pats on the back to profile articles on the company intranet, to celebratory events, ensure people are congratulated and achievements celebrated on an informal and formal basis. To fully realize your CSR objectives, including the integration of CSR into “the way business is done around here”, it is important to honor the small wins and major milestones achieved on the journey.
Regardless of the point of view, all agree that effective HR leadership on CSR integration requires Board, CEO and executive commitment to be successful. Indeed, the roadmap is predicated on the assumption of this top level commitment. However, more and more organizations are committing to sustainability and to embedding CSR into “all that we do”, so it is hoped that 10 basic steps of Integrating CSR Into Human Resource Management provide some guidance as to how to go about doing this.
The firm of the future is expected to have undergone significant transformation such that CSR no longer becomes managed as a separate deliverable, but is part of the experience of being an employee in an organization that lives its values. For human resource professionals embarking on CSR or deepening their CSR experience, this roadmap can help them understand their role in sustainability and CSR and how they can foster an environment that embeds a CSR ethic in “the way we do business around here”.
This article provides some basic steps or starting point for managers mapping out their strategic approach. It can serve as a checklist for advanced managers who are well on the path, and it can provide a roadmap for the manager who is committed to make a difference in this way and is at the beginning of their journey. Ideally these steps would be followed more or less sequentially; however in practice this is often not possible and indeed, some managers may have already implemented certain components. The basic steps of integrating CSR into human resource management have been described below.
Step 1: Vision, mission, values and CSR strategy development
Successful CSR requires a clearly articulated vision, mission and values. The HR practitioner could initiate or support the development, or upgrade, of a vision, mission and values foundation if one does not exist or does not explicitly address CSR. The foundation needs to incorporate elements of corporate social responsibility or sustainability in order for it to foster alignment. Where a CSR ethic has not yet taken hold, the HR manager could champion the need and opportunity for a vision, mission and set of values and show how it can add ROI to the organization, why this could be both a good business strategy and a good people strategy. The manager can bring the opportunities to the attention of the senior executive and the board on what it means, and why it makes good business sense. These are the first steps to building CSR into the company’s DNA and into the organization’s operating and strategic framework.
Once the vision, mission and values framework is defined, the firm is ready to undertake the development of its CSR strategy. This paper will not delve into the components of CSR strategy development, as that is a significant topic of its own. The role of the human resource manager at this phase is central to all other steps: it is critical that the human resource function be represented at the table in the development of the CSR business plan and strategic direction. They have an important “people perspective” to contribute and will be involved in implementing key measures. Particularly in those firms where CSR is housed in the human resource department, the HR manager has a key role in CSR strategy development. HR is a strategic partner in the organization and as such, can help drive the formulation of the CSR strategy.
Step 2: Employee codes of conduct
The HR function is typically responsible for drafting and implementing employee codes of conduct. As such, HR managers hold the pen on the principles contained i n the employee codes. Since a number of recent high profile corporate frauds, boards of directors have become very concerned about the ethical culture within their organizations, looking for 100% sign- off on and compliance with codes of conduct which articulate their ethical values. This is an ideal home for the expression of an organization’s commitment to socially and environmentally- based decision - making as it is one of the rare documents which all employees are bound by and come into contact with. As such it is a key tool for cultural integration of CSR norms. It is important to avoid rhetoric and undefined terms such as “sustainability” and “CSR”, but to clearly enunciate the conduct standards expected of employees.
Step 3: Workforce planning and recruitment
Workforce planning consists of analyzing present workforce competencies; identification of competencies needed in the future; comparison of the present workforce to future needs to identify competency gaps and surpluses; the preparation of plans for building the workforce needed in the future; and an evaluation process to assure that the workforce competency model remains valid and that objectives are being met. For a CSR oriented company, this consists of evaluating the need for skill sets and competencies central to the emergent sustainability economy – an economy of resource and energy scarcity, human and environmental security constraints, changing societal norms and government expectations. Companies need to identify their key CSR competencies and gaps in the context of these structural changes. Referred to by many as the “green economy”, regardless of its title, the marketplace is undergoing a systemic transformation that will require new competencies and skills. (Unpublished paper: Sustainability Labor Market Trends by Strandberg, 2009.) The Co-operators Group Ltd., for example, is upgrading its eight competencies (accountability and ownership; time and deadline management, practical problem solving and judgment, communication, coaching and working with others) to reflect their corporate sustainability commitments and values.
A related exercise, talent management, which refers to the process of developing and integrating new workers, developing and keeping current workers and attracting highly skilled workers to work for the company, needs to consider alignment with the company’s CSR vision and goals to ensure talent is developed with the appropriate focus. Often in the area of talent management and recruitment, leading CSR companies develop an employer brand that incorporates their CSR perspective into the employee value proposition. More and more firms are profiling their CSR ethics in their recruitment branding and marketing programs, promoting the benefits of working within a values -based culture. Employee volunteer programs and community involvement are oft - cited company values expressed by employees, and found within employee value proposition and internal brand development efforts. Campus recruitment programs are ideal environments for CSR oriented recruitment, as is online recruiting where technology savvy employees search for work. In this environment, recruitment interviews include questions on ethics and CSR; the offer letter reinforces the corporate culture; and early employee contact reinforces the CSR brand.
Step 4: Orientation, training and competency development
During the orientation process employees should be given a thorough overview of the clear line of sig ht between the company’s vision, mission and core CSR values and goals. To ensure maximum alignment and early employee ‘buy- in’ to the strategic CSR direction of the organization, this general orientation should be deemed mandatory for all levels of new employees. New employees need to be provided information about CSR policies and commitments, the key CSR issues the company faces and the key stakeholders with which the firm engages. How the company measures its CSR performance, the annual sustainability or CSR report, and where they can find further company information on CSR are important elements of new employee orientation programs. New hires should receive a copy of the core values.
Once inducted, employees should be provided CSR training on an annual or other regular basis. Employees will either have direct CSR responsibilities (e.g. energy manager) or indirect CSR responsibilities (e.g. payroll clerk). Those with direct responsibilities will receive technical and specialized training in CSR while those with indirect responsibilities should receive training in top priority CSR issues of a more general nature. Either way, it should be job - relevant as with health and safety training for factory workers to strategic sustainability issues for executive management and the Board.
Step 5: Compensation and performance management
Next to recruitment and competency development, compensation and performance management are central to the HR function. HR is involved in setting performance standards and expectations and monitoring results to performance objectives. At Vancity Credit Union their Statement of Values and Commitments which articulate their CSR principles is incorporated as a key area of accountability in all executive role descriptions rather than as an added attachment at the end of each role description.
Going forward they are expanded beyond their three stated values of innovation, integrity and responsibility, translating them to goals i n the annual performance plans of all executives to be cascaded down to each of their managers and employees. They believe that by integrating their three corporate values and CSR - oriented Statement of Values and Commitments into their business planning, objectives, and executive role accountabilities, they will continue to sustain and ingrain their differentiator in all that they do. (Personal communication with Susan Karda, Manger, Organization Development & Learning, Vancity, Feb. 25, 2009).
Step 6: Change management and corporate culture
Human resource practitioners are the keepers of the flame when it comes to corporate culture, team building and change management processes. Growing and adapting to the changing marketplace necessitates that firms pursue significant behavioral shifts from time to time. Sometimes organizations require the outside assistance of change management professionals to help them identify an appropriate strategy when they are attempting to create significant behavioral change, but in the end, culture shift can only be achieved and sustained if it is driven and sponsored effectively internally.
Mindsets and behavioral change come about through role modeling, building awareness and generating desire (what is in it for me?) and conviction, developing knowledge and ability and reinforcement through incentive programs. Culture change requires setting the tone at the top – where executives and management demonstrate and model the organization’s values – and then creating alignment throughout the organization with the values you espouse to live. The values need to be reflected in all processes starting with how you attract and recruit employees, to decision- making and rewards and incentive programs, etc.
Step 7: Employee involvement and participation
As mentioned earlier, employees are among the key stakeholders for the development of any CSR strategy or program. A critical first step in mission, vision, values and strategy development is to understand the key concerns, priorities and perspectives of all key stakeholders, particularly employees. It is a truism that employees consulted and engaged in the development of new programs and approaches are likelier to follow through with their implementation. Often companies consult and engage their employees in the development and delivery of their community involvement and charitable donations programs; however, what is called for here is more substantive than this.
Employee engagement has been acknowledged as a key driver of shareholder value in a firm and is becoming a key metric for monitoring corporate performance by Board and management. Research by Towers Perrin in 2007 revealed that an organization’s reputation for social responsibility was one of the top 10 engagement drivers, along with senior management’s interest in employee well- being, opportunities to improve skills and capabilities and input into decision- making. (Cited in European Alliance for CSR, 2008, p. 11). Hewitt Associates, a global HR consulting firm, is developing a suite of CSR questions to probe employee CSR perceptions for their 2009 employee engagement survey with the intent to include CSR questions in their engagement surveys going forward.
Step 8: CSR Policy and Program Development
HR is also in a position to drive policy development and program implementation in HR areas that directly support CSR values. Wellness, diversity, work- life balance and flex -time policies are CSR programs directly within the HR manager’s purview. In organizations committed to reducing their carbon footprint HR practitioners can develop programs enabling employees to use alternative transportation to get to work (e.g. providing showers, secure bike lock- ups, parking spots for van pools and co - op or hybrid cars, bus passes, e tc.) and work remotely, including other forms of headquartering and “hoteling”, teleworking, etc.
Wellness programs can become a platform for engaging employees in discussions about “personal sustainability” and provide support for employees in the areas of stress management, spirituality at work, health and fitness, healthy lifestyles, etc. Employee volunteering programs are also within the HR mandate, and can help build out the employee value proposition and employer brand while concurrently delivering on the firm’s CSR goals for community engagement and investment. A related policy could be the development of an unpaid leave program for employees to pursue personal projects aligned with company values. Successful wellness, carbon reduction and employee volunteer programs require management support, role - modeling and ongoing communications – which, if in place become further vehicles to fostering employee awareness of, and engagement in, the firm’s CSR approach.
Step 9: Employee Communications
Every CSR strategy requires the development and implementation of an employee communication program to convey the corporate direction, objectives, innovation and performance on its CSR efforts. Intranets, websites, blogs, wikis, social networking sites, podcasting, videos, forums, town hall meetings, regular team briefings, webcasts, voicemails, print and electronic newsletters and other forms of social media need to be deployed to bring the CSR message to the workforce – in ways that are attuned to the communication channels of the employee, which are changing rapidly in this age of web 2.0.
It is important to note that employee engagement is dependent on communication of board, CEO and senior management commitment, in the absence of which employees will become cynical and unmotivated. Lack of CSR commitment at senior levels could lead to disgruntled and frustrated employees finding unmonitored, anonymous social networking sites to express their dissatisfaction. It is important to close this potential gap with clear communication and walking the walk on the part of senior executives. The Co- operators, for example, launched their 2008–2010 Sustainability Strategy with a CEO speech and CEO video to all staff.
Step 10: Measurement, Reporting – and celebrating successes along the way!
As what gets measured gets managed, it is vital that both CSR performance and employee CSR engagement be actively measured and reported to executive, the board of directors and publicly. Typically this is done in the form of an annual CSR report. Increasingly, many of these reports are disclosing employee engagement scores, including employee response to such questions as:
“I am aware of and understand our CSR Strategy.”
“I believe the firm acts in alignment with its CSR values and policy.”
“I believe the firm is making progress towards implementing its CSR Strategy.”
“Our CSR Strategy makes me feel proud to be working at the firm.”
“I feel comfortable raising CSR issues in the workplace.”
“I believe our organization is a champion of sustainability amongst the public.”
Other human capital metrics, such as turnover, health and safety, employee development and diversity, for example, can be additional metrics which reveal the firm’s CSR commitment and the degree to which it walks its talk.
In designing your CSR report again it is important to consult employees on what to report and it is important that the report be received and approved by the board of directors for public release. It is only under these conditions can the HR professional be assured that these metrics and the firm’s CSR performance are taken seriously.
finally, but no less importantly, don’t forget to celebrate the successes large and small along the way. From pats on the back to profile articles on the company intranet, to celebratory events, ensure people are congratulated and achievements celebrated on an informal and formal basis. To fully realize your CSR objectives, including the integration of CSR into “the way business is done around here”, it is important to honor the small wins and major milestones achieved on the journey.
Regardless of the point of view, all agree that effective HR leadership on CSR integration requires Board, CEO and executive commitment to be successful. Indeed, the roadmap is predicated on the assumption of this top level commitment. However, more and more organizations are committing to sustainability and to embedding CSR into “all that we do”, so it is hoped that 10 basic steps of Integrating CSR Into Human Resource Management provide some guidance as to how to go about doing this.
The firm of the future is expected to have undergone significant transformation such that CSR no longer becomes managed as a separate deliverable, but is part of the experience of being an employee in an organization that lives its values. For human resource professionals embarking on CSR or deepening their CSR experience, this roadmap can help them understand their role in sustainability and CSR and how they can foster an environment that embeds a CSR ethic in “the way we do business around here”.