Corporations listed in Fortune’s “100 Best Companies to Work For in America” had equity returns that were 3.5% per year higher than those of their peers, indicating that employee satisfaction correlates positively with shareholder returns, says Alex Edmans of the Wharton School. The results of his study of companies also indicate that, contrary to prior research, employee satisfaction need not represent managerial slack, Edmans says.
Companies Do Well if Workers Feel OK About Speaking Up
Companies rated by their employees as being in the top quartile in openness of communication delivered an average total shareholder return of 7.9% over a recent 10-year period, compared with 2.1% at companies in other quartiles, according to the Corporate Executive Board. Among 7 key indicators that the organization tracks in more than 130 companies worldwide, the one most strongly correlated with 10-year returns is employees’ comfort in speaking up, even when they have negative things to say.
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