초록

Existing theories have conflicting views as to whether employee satisfaction is beneficial for corporate performance or corporate value. Agency theory advocates that entrenched CEOs pay more to employees. Employee satisfaction increases when employees are overpaid and/or underworked, which eventually decrease firm value. In contrast, modern human relations theory considers employees as key organizational assets, who can create firm value by enhancing competitive advantage. This paper evaluates above two competing theories by investigating the relationship between corporate employee satisfaction and its long-run firm performance in Korea. It is likely that most previous studies examining the relationship focused on job satisfaction and performance rather than firm-level value. The employee satisfaction category score of the KEJI index is used to measure corporate employee satisfaction at the company level. Our samples are the industrial firms listed in the Korean Market (KRX) with stock returns and financial data during the period of 2012～2014. The first proxy of corporate performance is stock returns. The second proxy of corporate performance is operating performance. We use the ratio of earnings before interest, taxes, depreciation and amortization to total assets as operating performance following the recommendation of Barber and Lyon (1996). The third proxy of firm performance is Tobin’s Q. We calculate Tobin’s Q following Chung and Prutts (1994) equation. Based on prior studies, we add the control variables such as firm size, risk, growth, volatility, leverage, research and development (R&D), advertising, and firm age. The empirical results are as follows. Firstly, the t-test findings show that firms with higher employee satisfaction have superior stock returns, operating performance, and Tobin’s Q than ones with lower employee satisfaction during the sample period. Also, the findings provide evidence to support the influence of employee satisfaction on contemporaneous and next year stock returns, operating performance, and Tobin’s Q. Secondly, the evidence of several cross-sectional regression models shows that employee satisfaction positively affects on firm performance. Based on the empirical findings, we can conclude that the modern human relations theory rather than the agency theory has explanatory power in Korea.

키워드

employee satisfaction, KEJI index, stock returns, operating performance, Tobin’s Q

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