Financial Misconduct and Changes in Employee Satisfaction

In a recent paper, we use new and proprietary micro-data from company-ratings site Glassdoor for the period between 2008 and 2016 to investigate changes in employees’ perception of firms and managers during  periods of financial misconduct and after the public announcement of the misconduct. Employee satisfaction is crucial for firm productivity and also serves as a proxy for a firm’s ability to attract and retain top talent. It is reasonable to expect that public announcement of financial misconduct by a firm would have a negative effect on its employees’ perceptions of the firm. Moreover, employees, as insiders, may observe nonpublic … Read more