Revenue Drift, Incentives, and Effort Allocation in Social Enterprises

Theodor Vladasel (), Simon C. Parker (), Randolph Sloof and Mirjam C. van Praag ()
Additional contact information
Theodor Vladasel: Pompeu Fabra University
Simon C. Parker: Western University, Canada
Mirjam C. van Praag: Copenhagen Business School

No 15716, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Revenue drift, where insufficient attention is given to economic, relative to social, goals, threatens social enterprise performance and survival. We argue that financial incentives can address this problem by redirecting employee attention to commercial tasks and attracting workers less inclined to fixate on social tasks. In an online experiment with varying incentive levels, monetary rewards succeed in directing worker effort to commercial tasks; high-powered incentives attract less prosocial employees, but low-powered incentives do not alter workforce composition. Social enterprises combining monetary rewards with a social mission not only attract more workers, but are also able to guard against revenue drift.

Keywords: social enterprise; experiment; multitasking; incentives; prosociality (search for similar items in EconPapers)
JEL-codes: D22 J33 L21 L31 (search for similar items in EconPapers)
Pages: 96 pages
Date: 2022-11
New Economics Papers: this item is included in nep-exp, nep-hrm and nep-lma
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Published - published in: Journal of Economics & Management Strategy, 2024, 33 (3), 630 - 651

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Journal Article: Revenue drift, incentives, and effort allocation in social enterprises (2024)
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