A Greener Company Makes for Happier Employees More so than Does a More Valuable One: A Regression Analysis of Employee Satisfaction, Perceived Environmental Performance and Firm Financial Value

15 Pages Posted: 14 Dec 2009 Last revised: 18 May 2013

See all articles by Cassandra Walsh

Cassandra Walsh

University of Massachusetts Dartmouth - Charlton College of Business

Adam J. Sulkowski

Babson College

Date Written: December 10, 2009

Abstract

This paper tests two hypotheses. The first hypothesis is that employee satisfaction is positively impacted when a company is perceived as performing well environmentally. The second hypothesis is that employee satisfaction is positively impacted by firm financial performance. To test these hypotheses, the relationships between perceived environmental performance, financial performance and employee satisfaction were tested using regression analysis. The results indicate a significant positive relationship between employee satisfaction and level of perceived environmental performance. This study does not find a significant relationship between employee satisfaction and firm financial value.

The practical implication for managers is that investments in environmental performance and related communications are important for reasons beyond those that are more commonly discussed, such as external stakeholder relations. This study suggests that environmental performance and related communications should be an integral part of human resources management strategies to recruit, motivate and retain the best talent.

For scholars, this study suggests future directions for research in, for example, determining the causal mechanisms between actual environmental performance, perceptions of relative environmental performance and employee satisfaction.

Keywords: employee satisfaction, environmental performance, firm financial performance, Tobin's Q

JEL Classification: G3, M14, M50, M54

Suggested Citation

Walsh, Cassandra and Sulkowski, Adam J., A Greener Company Makes for Happier Employees More so than Does a More Valuable One: A Regression Analysis of Employee Satisfaction, Perceived Environmental Performance and Firm Financial Value (December 10, 2009). Available at SSRN: https://ssrn.com/abstract=1521745 or http://dx.doi.org/10.2139/ssrn.1521745

Cassandra Walsh (Contact Author)

University of Massachusetts Dartmouth - Charlton College of Business ( email )

285 Old Westport Road
North Dartmouth, MA 02747
United States

Adam J. Sulkowski

Babson College ( email )

231 Forest St.
Babson Park, MA 02457-0310
United States

HOME PAGE: http://www.babson.edu/Academics/faculty/profiles/Pages/sulkowski-adam.aspx

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