Abstract
The aim of the essay is to contribute to development of an unitary interpretation of the supply of labour in nonprofit organizations. The paper shows that agents supply their labour on the basis of a mix of motivations, whose composition is influenced by numerous personal, cultural, and vocational factors. Empirical and experimental analyses, and especially research on under-remunerated workers in nonprofit organizations with an explicit social mission, show that volunteers are also driven by self-regarding preferences, while remunerated workers may have preferences that are different from the maximization of immediate or deferred monetary income. It is possible to take account of this pluralism of motivations and agents by modifying the utility function so that it includes all the different types of motivation. The resulting allocation of workers and volunteers among sectors and enterprises can therefore be considered efficient also in the presence of individuals who are not paid or who are systematically paid less than others.
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- 1.
The distinction between the two types of work is not always clear in the literature. Whilst normally considered to be volunteers are persons who work for an organization, or directly for the beneficiary of a service, on a gratuitous basis or with the sole reimbursement of expenses, some international organizations (e.g. ILO and UN) still use the concept of ‘remunerated volunteers’, meaning by this term persons who perform paid work for a nonprofit organization from which they receive remuneration below the market rate. Aside from the difficulty of quantifying ‘market remuneration’, in the most recent literature these workers are generally considered to be remunerated, and are treated as such.
- 2.
Voluntary workers are also often present in public organizations delivering social services, above all when they have a community connotation (see Borzaga 2000).
- 3.
Deliberately excluded from this survey are interpretations according to which these two forms of work are due to a lack of occupational alternatives, because they derive more from casual observation that from research conducted with scientific methods, and are therefore of little interest for the purposes of this study.
- 4.
For more detailed analysis of motivations see the self-determination theory of Gagné and Deci (2005).
- 5.
In order to simplify study of the utility function and restrict the analysis to motivations and incentives, it is assumed here that the cost of effort enters the utility function in a fixed amount and that it reduces the utility in the same way and to the same amount for each worker. It will be aim of future analysis, on the one hand, to verify the sign of the correlation between effort and job satisfaction and, on the other, the determinants of the cost of effort. In regard to the former aspect, it will be assumed that effort is a source not only of costs but also of satisfaction (entering also with a positive sign into the utility function). In regard to the latter consideration, it will be assumed that social preferences and intrinsic motivations may decrease the perception of the cost of effort.
- 6.
Procedural fairness is included in the function as the value received by the workers. It could be broken down, like the other components, into p = the procedural fairness effectively provided in the organization, and m p = importance attributed to fairness by the worker. However, the two factors are often evaluated jointly because it is difficult, especially from an empirical point of view, to split the fairness component between its objective value and the weight assigned to it by the worker. One may therefore assume that the worker expresses with p p a subjective evaluation of the process-regarding aspects.
- 7.
Although the theoretical explanation assumes that workers must be offered a mix of incentives, it mainly refers to a mix of intrinsic and extrinsic incentives. Instead, by assuming that other- and process-regarding preferences enter the utility function in an additional way, the model stresses that the greater the importance of social preferences and the provision of fairness and altruistic behaviours on the job (i.e. the higher m o o and p p ), the greater the workers’ final utility. But the utility is not equal to zero when the treatment is unfair or the job does not influence the well-being of others, when self-regarding aspects are sufficiently high. It should be instead assumed that inequality and organizational egoism decrease the utility of workers (i.e. m o o + p p becomes negative) and the final utility decreases, also with the risk of diminishing the worker’s reserve utility.
- 8.
In a different assumption of the model (for a detailed study of the utility function, see Depedri 2007) and as also found by empirical analyses on social cooperatives and nonprofit organizations (see Borzaga and Depedri 2005), the utility function also includes minimal requested levels of intrinsic and extrinsic incentives. In a similar way, there exists a minimum threshold for one or more of these elements below which workers will decide not to work for the organization, or below which their utility level is unsatisfying.
- 9.
This is often due to the fact that volunteers already have external work incomes and are therefore little motivated by the extrinsic component.
- 10.
In other words, over time the constant stimulus to relationality, involvement and the development of autonomy and personal as well as professional growth increases intrinsic incentivation. Proximity with other motivated workers, volunteers and stakeholders, but also and especially users, internalizes the mission in preferences. The presence of social norms and coherent behaviours enhance the altruistic component. Knowledge of the work environment transmits information about procedures. And consistent organizational policies may increase the perception of fairness.
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Acknowledgments
The ideas set out in the article result from joint reflection with various colleagues within the Department and elsewhere, and in particular with Sara Depedri, Luigi Bonatti, Ermanno Tortia, Luigi Mittone, Maurizio Pugno, Marco Musella and Maurizio Carpita. I am particularly grateful to Sara Depedri, who helped greatly to improve the article in all its parts. However, responsibility for errors or omissions remains mine alone.
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Borzaga, C. (2009). A Comprehensive Interpretation of Voluntary and Under-Remunerated Work. In: Musella, M., Destefanis, S. (eds) Paid and Unpaid Labour in the Social Economy. AIEL Series in Labour Economics. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2137-6_2
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