Financial Misconduct and Changes in Employee Satisfaction

57 Pages Posted: 18 Oct 2019 Last revised: 23 Oct 2019

See all articles by Yuqing Zhou

Yuqing Zhou

The Chinese University of Hong Kong (CUHK) - CUHK Business School; University of California, Los Angeles (UCLA), Anderson School of Management, Students

Christos Makridis

Stanford University; Columbia University - Columbia Business School; Arizona State University (ASU); Department of Veterans Affairs (VA)

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Date Written: October 10, 2019

Abstract

We use Glassdoor data to study the effects of the public announcement of financial misconduct on employees' perceptions of firms and managers. We find a 0.32 standard deviation decline in employees' overall company ratings and 0.14 to 0.40 standard deviation declines in ratings of career opportunity, compensation benefit, senior leadership, work-life balance, culture value, and recommendation. Additional analysis shows that long-term reputation damage is likely to be the main economic channel behind the findings. Moreover, we further assess whether employee ratings are helpful in predicting misconduct. During the years of the misconduct period, employees who are more likely to have private information lowered their ratings. Such employees' ratings help predict misconduct.

Keywords: Financial Misconduct, Employee Satisfaction, Misconduct Predicting

JEL Classification: G3, M4

Suggested Citation

Zhou, Yuqing and Makridis, Christos, Financial Misconduct and Changes in Employee Satisfaction (October 10, 2019). Available at SSRN: https://ssrn.com/abstract=3467787 or http://dx.doi.org/10.2139/ssrn.3467787

Yuqing Zhou (Contact Author)

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

University of California, Los Angeles (UCLA), Anderson School of Management, Students ( email )

Los Angeles, CA
United States

HOME PAGE: http://www.yuqingzhou.com/

Christos Makridis

Stanford University ( email )

Stanford, CA 94305
United States

Columbia University - Columbia Business School ( email )

3022 Broadway
New York, NY 10027
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Arizona State University (ASU) ( email )

Farmer Building 440G PO Box 872011
Tempe, AZ 85287
United States

Department of Veterans Affairs (VA) ( email )

810 Vermont Avenue NW
Washington, DC 20420
United States

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