The Effectiveness of Prosocial Rewards and Cash Rewards in Internal Whistleblower Programs

ABSTRACT There is growing interest in both practice and research on the use of prosocial rewards to recognize and motivate employees, though prior research mainly focuses on their motivational effects on effort. We use an experiment to examine the relative effectiveness of prosocial rewards versus cash rewards at increasing the likelihood of whistleblowing internally within the organization. We focus on a common organizational setting in which the employee encounters uncertainty when assessing the occurrence and impact of potential misconduct. We find that prosocial rewards (vs. no rewards) increase the whistleblowing likelihood and are also not less motivating than cash rewards, despite the personal economic disadvantage to the whistleblower. Our mediation analyses provide some weak evidence that the positive effect of prosocial rewards on whistleblowing works indirectly through increasing the perceived morality of whistleblowing, whereas no such indirect effect is observed for cash rewards. Our study offers insight on the outcomes of using prosocial versus cash rewards in internal whistleblower programs for organizations interested in incentivizing whistleblowing with different reward types.