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10.13007/435

Ideas for Leaders #435

Ways to Encourage Employees to Help EachOther

Key Concept

A cooperative culture featuring generous employeeshelping each other is a key success factor forinnovative and effective organizations. The twomechanisms for such generosity is the pay-it-forwardapproach, where someone who has been helped helpsanother person, and reputation rewarding, in whichemployees with a reputation for helping others arerewarded with help when they need it. New researchfrom the University of Michigan’s Ross School ofBusiness shows that both mechanisms are effective,but paying it forward will have a longer lasting impacton the organization.

Idea Summary

In a world of business in which cooperation is oftenthe key to success, many companies overlook thedamage that infighting, extreme competition orknowledge hoarding by employees can cause to sales,profits and effectiveness. At the opposite end of thescale are the organizations that encourage andfacilitate employee cooperation and generosity.Employees look for ways to help each other — anapproach known as generalized reciprocity: beinghelped and in turn helping others.

There are two types of generalized reciprocity. One is‘reputation rewarding’ — in this case, someone whohas a reputation as being helpful to others is going toreceive more help from others than someone whodoes not have a helpful reputation. This can lead tosome strategic generosity: you help others to buildyour reputation and ensure that you will be helpedyourself in the future.

The second type of generalized reciprocity is ‘pay itforward’ — the concept of pay it forward is thatsomeone helps you, and you in turn help a thirdperson.

Both mechanisms can be effective. An importantdrawback to reputation rewarding, however, is that aperson’s reputation is ephemeral. If it’s been some

ShareAuthors

Baker, Wayne E.Bulkley, Nathaniel

Institutions

University of Michigan Ross School ofBusiness

Source

Ross School of Business Working Paper

Idea conceived

April 2014

Idea posted

September 2014

DOI number

Subject

Knowledge ManagementHR ManagementOrganizational EffectivenessPerformance ManagementTeam Building and TeamworkNetworkingOrganizational Behaviour

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person’s reputation is ephemeral. If it’s been sometime since the person has assisted someone, theassistance becomes forgotten in the workplace and,rather quickly, the person is relegated to the ‘unhelpfulcolleague’ category.

A further drawback is that reputation rewarding isbased on keeping track of your fellow employeesbehaviour (that is, whether or not they are beinggenerous). With pay it forward, what counts is yourown experience, which is simpler and more salientthan keeping tracking of what others have done.

That said, the research shows that the two types ofgeneralized reciprocity work well together. Pay itforward, motivated by the ‘positive effect’ of gratituderather than by self-interest and strategicconsideration, does have a longer and more lastingimpact in building a generosity-driven culture.Nevertheless, the cycles among employees ofreputation rewarding and of paying it forward lead toa sustained virtuous cycle of cooperation.

Business Application

To enable and energize this virtuous cycle ofcooperation among employees, companies need toput in place practices and systems that spark bothmechanisms.

Create opportunities to establish and make visible thenorms in your company for asking for help, giving helpand reciprocating help. Scheduling regular employeemeetings similar to IDEO’s, ‘brainstorming’ and‘Monday morning’ meetings for example, can help setthe stage for reciprocity.

Also, reward and/or recognize employees who havehelped others. This can be as simple as publicizing actsof generosity or expressions of gratitude in a companynewsletter, or ending meetings with an invitation tothose in the room to express any appreciation for helpthey have received.

More formal programs, such as Southwest Airlines‘agent of the month’ award given to those who havehelped others succeed, are also effective. A peer-to-peer bonus system encourages helpful behaviour byallowing employees to recognize their peers. Google,for example, rewards those who has helped someonewith a token payment, plus an additional payment thatmust be paid forward to recognize a third person, thusincorporating a pay-it-forward component to thesystem.

For large corporations, the challenge of encouraginghelpful behaviour is compounded by a dispersedworkforce. These barriers of distance — as well as theorganizational silos common in large corporations —can be surmounted thanks to company-sponsoredonline communities in which your employees canshare knowledge and respond to requests for help. Oilgiant ConocoPhillips believes its knowledge sharingcommunities has saved the company up to $100million. While ConocoPhillips offers somecompensation for participation in the communities,employees also use the system voluntarily.

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Monetary rewards, such as ConocoPhillips’ variablecompensation or Google’s token payments, canencourage and recognize generosity, but through themechanisms of paying it forward and reputationrewarding, the greatest motivation for employees tooffer help is internal. The job of organizations is tofacilitate such generosity in any way possible.

© Copyright IEDP Ideas for Leaders 2014

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Further Reading

Paying It Forward Versus Rewarding Reputation:Mechanisms of Generalized Reciprocity. Wayne E.Baker & Nathaniel Bulkley. Organization Science(June 2014).

How Paying It Forward Can Help Your Company.Will Yakowicz. Inc. Magazine (7th July 2014).

The Paying It Forward Payoff. Gretchen Gavett,Harvard Business Review Blog (30th June 2014).

Further Relevant Resources

Wayne Baker’s profile at Michigan Ross School of Business

Nathaniel Bulkley’s profile on LinkedIn

Michigan Ross School of Business’ Executive Education profile atIEDP

Reciprocity Ring® group activity, a Center for PositiveOrganizations Partner Product