Does Job Satisfaction Increase Sales and Customer Satisfaction? Evidence from Retail Banking in South Korea

Abstract

his paper estimates the causal relationship between job satisfaction and worker productivity. Using personnel records from a retail bank in South Korea, we show that branch productivity is positively associated to average job satisfaction, but negatively to its standard deviation. We address endogeneity concerns using IV strategies and that while higher job satisfaction may increase short term productivity through sales to existing customers, excessive sales to existing customers may hurt customer satisfaction and willingness to recommend in the long run. Our ndings suggest that average job satisfaction and its dispersion are equally important to understand worker productivity.

Keywords: Productivity, Job Satisfaction, Customer Satisfaction, Word of Mouth

JEL Classification: J24, J28, M50