Creating Financial and Social Value by Improving Employee Well-Being: A PLS-SEM Application in SMEs

Mercedes Rubio-Andrés (), Ma del Mar Ramos-González, Santiago Gutiérrez-Broncano and Miguel Ángel Sastre-Castillo
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Mercedes Rubio-Andrés: Department of Business Administration, Faculty of Commerce and Tourism, Complutense University of Madrid, 28003 Madrid, Spain
Ma del Mar Ramos-González: Department of Business Administration, CEU San Pablo University, 28003 Madrid, Spain
Santiago Gutiérrez-Broncano: Department of Business Administration, University of Castilla-La Mancha, Faculty of Social Sciences, 45600 Talavera de la Reina, Spain
Miguel Ángel Sastre-Castillo: Department of Business Administration, Complutense University of Madrid, 28003 Madrid, Spain

Mathematics, 2022, vol. 10, issue 23, 1-16

Abstract: In the business world, the improvement of employee well-being in organizations is important, as there is empirical evidence that it brings social value and economic benefits to organizations. To advance in this line of research, we considered SMEs as the object of study due to their importance in Spanish businesses and the scarcity of empirical studies on the subject. We use the partial least squares structural equation modeling (PLS-SEM) to analyse the measurement models and the structural model. Our research focuses on the importance of influential variables on well-being, but also considers how they affect financial performance. In the model that we present, there is a direct effect between the latent variables HPWS, well-being, reputation and financial performance, which represents how human resource management based on good practice in small and medium-sized enterprises (SMEs) positively affects well-being by creating a good reputation and generating more business wealth. Our findings confirm the direct relationships proposed in the model, as well as the relevance of well-being and reputation as mediating variables.

Keywords: well-being; financial value; social value; reputation; HPWS; SMEs (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2022
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