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The Employee Is Always Right: Employee Satisfaction and Corporate Performance in Brazil

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  • Alexandre Silveira

Abstract

I investigate the effect of employee satisfaction on corporate performance based on an extensive dataset of 114,004 online reviews of Brazil’s 1,000 largest listed and unlisted firms from 2013 to 2018 posted at a local subsidiary of Glassdoor. I find that overall employee satisfaction is positively associated with firm performance and that this relationship is likely to be economically relevant. Among the four dimensions of employee well-being, the link with performance is most evident for the dimension on culture, followed by career opportunities. On the other hand, the dimension on compensation and benefits was the least connected with firm performance. Taken together, these results support the view that intrinsic motivators are more relevant for superior performance than extrinsic ones popularized by the carrot and stick approach to management. I also find that the influence of employee satisfaction on performance is likely to be asymmetrical, in the sense that workplaces characterized by low satisfaction among workers are more likely to lead to poor performance than best-in-class companies are likely to produce superior performance. To my knowledge, this is the first paper to document an asymmetrical link between firm value and employee satisfaction, as well the first one to investigate this issue in an emerging economy using online reviews.

Suggested Citation

  • Alexandre Silveira, 2019. "The Employee Is Always Right: Employee Satisfaction and Corporate Performance in Brazil," RAC - Revista de Administração Contemporânea (Journal of Contemporary Administration), ANPAD - Associação Nacional de Pós-Graduação e Pesquisa em Administração, vol. 23(6), pages 739-764.
  • Handle: RePEc:abg:anprac:v:23:y:2019:i:6:1365
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    File URL: https://rac.anpad.org.br/index.php/rac/article/view/1365/1419
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    Cited by:

    1. Nimnual Visedsun & Kanitsorn Terdpaopong, 2021. "The Effects of the Strategy and Goal on Business Performance as Mediated by Management Accounting Systems," Economies, MDPI, vol. 9(4), pages 1-17, October.

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