Use or Lose: The Subtle Effect of Corporate Social Responsibility on Workers’ Psychological Capital

Increasing uncertainty in the labor markets requires a rethinking of future-proof and sustainable workforce management. Previous micro-CSR research has found that employees' perceived Corporate Social Responsibility (PCSR) influences positive behaviors and attitudes. However, there is a lack of awareness of the subtle influences of CSR as a contextual corporate factor on the psychological state of individual beneficiaries beyond the directly intended effects. We draw on social exchange and deontic justice theories to analyze the relationship between PCSR and employees’ Psychological Capital (PsyCap). We also account for the under-researched nuances of CSR by distinguishing between perceptions of internally and externally oriented CSR. At a time when employees are increasingly demanding, we examine the moderating influence of their level of psychological entitlement (PE). Survey data from 1,079 employees in over 400 firms in Germany confirm the significant effect of PCSR on PsyCap, which PE moderates significantly. Contrary to our hypothesis, perceptions of externally oriented CSR influence PsyCap more than internally oriented CSR. Our results do not only contribute a part to closing research gaps. We provide practitioners with the awareness to actively use the positive side effects of CSR. Otherwise, companies lose out on the subtle, less obvious benefits associated with CSR activities.