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How Paying It Forward Can Help Your Company

New research says that companies that encourage generosity between employees score wins by generating ideas, sharing knowledge, and creating a better culture.
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Building a pay-it-forward culture at your company may sound ridiculous. But it's not as cheesy as Helen Hunt, Kevin Spacey, and Haley Joel Osment made it seem in the movie.

Recent research by Wayne E. Baker, a professor at the Ross School of Business at the University of Michigan, and Nathaniel Bulkley, who consults on organizational effectiveness issues for Innovation Places, found that two types of generalized reciprocity can be used to create a cooperative culture: Pay it forward, where someone helps another person and that person assists a third, and reputation rewarding, where a person who is known to pitch in receives more from co-workers than less helpful colleagues.

Baker and Bulkley conducted an experiment with MBA students, Harvard Business Review writes, where students were required to post five questions to a group message board and respond to 15 requests from others. The activity counted for 10 percent of the students' grades. Anything beyond those 15 requests did not win students additional credit.

The results are encouraging. The more responses posted to the forum in total, the greater the chance a student would answer an additional question--no matter how many questions that student had already answered. "This supports the hypothesis that the more help a person receives from others, the more likely that person is to help someone else. Second, the more responses a person wrote in the week before making a request of his own, the more likely others were to answer his question. This supports the idea that helping others will make it more likely that they themselves will receive help--rewarding reputation did have an impact," write Gretchen Gavett in Harvard Business Review.

There's one caveat for rewarding reputation though: a person's recent assistance is the only thing that matters. Baker and Bulkley write that "reputation effects decayed . . . and actually turned negative" fairly quickly. Therefore, an old reputation for helping out colleagues isn't enough. Baker and Bulkley refer to this as the "What have you done for me lately?" syndrome.

Paying it forward, though, is less complicated. "The sole requirement [of paying it forward] is that a participant be aware of his or her own experience, which is simpler and more salient than observing others and keeping track of what they do," Baker and Bulkley write.

They also found that both general reciprocity behaviors can work well together. "Over time, rewarding reputation and paying it forward may have created a virtuous cycle of cooperation," the two write. "The fact that almost 9 of the 10 participants continued to use the system after the quota [had been attained] suggests that a 'tipping point' may have been reached. If it had not, then a vicious cycle might have ensued, and cooperation would have plummeted."

Is it hard to instill such thinking in your company? During their research, Baker and Bulkley found a few large companies that have programs to promote cooperation.

At Southwest Airlines, they have the "agent of the month" award, which recognizes employees who have helped others do great work. The airline says using gratitude as a tool motivates other employees to help each other.

Google has a "a peer-to-peer bonus system that empowers employees to express gratitude and reward helpful behavior with token payments," Baker and Bulkley found. The policy basically has a pay-it-forward mechanism built in--"a recipient of a peer-to-peer bonus is given additional funds that may only be paid forward to recognize a third employee."

ConocoPhillips, the oil and gas company, built an online knowledge platform where employees pose questions and others provide answers. Baker and Bulkley say that the company has saved $100 million by this means of tapping employees' knowledge.

Paying it forward at your workplace doesn't sound so ridiculous now, does it?

IMAGE: Getty Images
Last updated: Jul 7, 2014

WILL YAKOWICZ | Staff Writer | Reporter, Inc.com

Will Yakowicz is a staff writer for Inc. magazine. He has covered business, crime, and local politics for The Brooklyn Paper and was the editor of Park Slope Patch. He has also reported on the West Bank and Moscow for Tablet Magazine. He lives in Brooklyn, New York.




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