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Employee Satisfaction, Firm Value and Firm Productivity

Roger Best ()
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Roger Best: University of Central Missouri

Working Papers from University of Central Missouri, Department of Economics & Finance

Abstract: We examine whether self-reported employee satisfaction is associated with higher firm valuation and productivity. Using a sample of firms from Fortune magazine’s list of "100 Best Companies to Work For", companies in which employees report high levels of satisfaction, we find that these firms have valuations that are significantly greater than both their respective industry medians and matched firms. The firms in our sample also exhibit greater levels of productivity and efficiency. Thus, successful efforts in increasing employee satisfaction appear to enhance overall firm productivity, which is subsequently rewarded by investors through higher equity values.

Keywords: Employee satisfaction; firm value; firm productivity (search for similar items in EconPapers)
JEL-codes: G12 G30 J41 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2008-05, Revised 2008-05
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-eff, nep-hap and nep-lab
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