Employee Tenure and Staff Performance: The Case of a Social Enterprise

The paper by Otiti, Godfroid, and Mersland zooms into a special case of a social enterprise, namely an Ecuadorian microfinance bank, and examines the relationship between employees' tenure and job performance. Microfinance organizations are hybrid organizations that aim to reduce poverty (SDG 1: no poverty) and to empower women (SDG 5: gender equality) (social performance), while being financially sustainable (financial performance) at the same time. The authors run a random-effects analysis on 1,597 employee-quarter observations of 165 loan officers. Results show that there is a tenure-dependent trade-off between social and financial objectives not only on the organizational but also on the individual level affecting financial and social performance differently. Hence, they highlight the implications of hybridity on employees' day-to-day work.
The paper by Sievert, Pinz and Helmig goes back to the macro-level and examines how hybrid arrangements are assessed by the public. In particular, the authors analyze what effect public-private collaboration has on perceived legitimacy of public administrations. Based on categorization theory, they hypothesize that there may be a negative spill-over effect on perceived legitimacy of public administrations if public services are delivered by private for-profit firms. To test this hypothesis, the authors conducted a survey experiment. Results show that perceived legitimacy of a public administration decreases if it cooperates with a for-profit firm in an infrastructure project (here: prison modernization). This effect is stronger in case of project failure. As such, this study shows that the use of hybrid arrangements may have unintended consequences that must be evaluated before opting for such an option.